Factors Hindering the Use of Internet Banking and Mobile Banking
Service of Islamic Banking for the Online Businessman
Ika Yunia Fauzia
STIE Perbanas Surabaya, Surabaya, Indonesia
Keywords: Internet Banking, Mobile Banking, Islamic Banking, Online Entrepreneurs.
Abstract: Utilization of Internet Banking and Mobile Banking in Islamic Banking for Online entrepreneurs is a crucial
problem nowadays. In relation to shariah compliance violations, many online Muslim entrepreneurs do not
use facilities of Islamic Banking as a means of payment of transactions in their business. This brings several
impacts, for example network of conventional banking which has developed earlier, thus when online
entrepreneurs want to use i-banking and m-banking in online transactions, they will find it difficult as there
is difference in administrative costs. In addition, the lack of awareness of online business people is also the
cause of several obstacles in the utilization of i-banking and m-banking in Islamic Banking. This study uses
50 respondents, online business people including distributors, agents, resellers, and including end users. By
using a qualitative approach with snowball model, this research is expected to contribute significantly to the
Islamic banking and online businesses who want to implement shariah compliance in their business
activities. This research finding the factors hindering the use of I-banking and M-banking service of Islamic
banking for the online businessman. The limitation of I-banking by Islamic banking and M-banking
provided and the limitation of I-banking network in Islamic banking for the online businessman.
1 INTRODUCTION
Today's technological advance brings many new
products into banking and new concepts in business.
Electronic banking or internet banking is familiar to
facilitate customer transactions through online
banking. The application services are intended to
facilitate payment system, transfer system, viewing
system of recording financial transactions in bank
accounts and so forth. New concept in business,
along with the emergence of technology is the birth
of online business, which certainly does not BIRng
together buyers and sellers. The absence of a
meeting between buyers and sellers requires online
buyers and sellers to use banking services as a
means to facilitate transactions in online business.
Internet banking and mobile banking services is
one of the means to facilitate transactions among
banking customers, especially those who are often
transact business online. With i-banking and m-
banking customers do not have to bother long queue
at a bank. They are still able to access their
bank account wherever they are. Implementation of
the system i-banking and m-banking in the bank is
one of the ease of bank services to its customers, so
that the bank can more freely raise and channel
funds from and to customers. I-banking and m-
banking necessarily provide a double benefit to
banks and customers in terms of efficiency, ease of
transaction and breadth of outreach. As for the
banks, i-banking and m-banking will develop
banking products more efficiently due to operational
cost savings. Moreover, the presence of i-
banking can also cut the number of the
representative office of a bank, because customers
are able to do transaction from their respective
locations. This is as explained by Elsan (2009) that
the method of payment with electronic systems can
provide comfort and cut operating costs of banks.
Both i-banking and m-banking has its advantages
and disadvantages, m-banking is more accessible
everywhere as it does not rely on internet network.
The application is simpler thus it is easy to learn by
many people. However, the use of m-banking must
be supported by an adequate pulse, different from i -
banking that does not need support of internet
network. Thus, the use of m-banking is tend to be
easier as it can be used wherever the users are, in a
big city or in a remote village and with various types
of mobile phones (GSM). Yuliaty (2014) in his
Fauzia, I.
Factors Hindering the Use of Internet Banking and Mobile Banking Service of Islamic Banking for the Online Businessman.
In Proceedings of the 1st International Conference on Islamic Economics, Business, and Philanthropy (ICIEBP 2017) - Transforming Islamic Economy and Societies, pages 635-640
ISBN: 978-989-758-315-5
Copyright © 2018 by SCITEPRESS – Science and Technology Publications, Lda. All rights reserved
635

study mentions that internet banking services have
influence on quality of service, which consists of
being tangible, reliability, responsiveness,
assurance, and empathy.
Banta (2014) in his study mentions respondents
agree that electronic banking service application
supports fund transfer, bill payments, loan
applications, credit cards, personal accounts, and so
forth. Ease of transfer of funds is undoubtedly easy.
However, customers find difficulties in the
implementation of e-banking service
application because the number of information
needed to apply for loans and credit cards. Another
problem is the numbers of personal accounts
were hacked, this indicates a system for assurance of
confidentiality has not been maintained. A further
problem is the customer experience one difficulty
to log-in e-banking in their personal accounts that
they had difficulty in paying bills, especially if they
have to go to the bank and no information was
received at the time of payment. Meihami et al.
(2013) mention in their research that suggest a link
between the electronic banking with five
components, namely: automated teller machine,
bank cards, internet banking, call centers and point
of sale, with the bank's revenue. Sa’diyah and
Aziroh (2013) explaine that the factors of trust
between Islamic banking of Mumalat Indonesia in
Kudus and that customers, is about the using of
mobile banking.
Amin et al. (2008) conducted the research about
Bank Islam Malaysia Berhad (BIMB) is a
commercial bank in Malaysia to introduce mobile
banking system to its customers. The results showed
that the behavior of customers to use mobile
banking because of their ease of
implementation. Another finding is the credibility
that is perceived by customers, perceived ease of use
and also benefit from this mobile banking. The
findings of this study are useful to promote the
importance of m-banking system among its
customers especially for customers of Bank Islam
Malaysia Berhad, and also to promote the use of m-
banking among customers.
Suharini (2008) mention in her study about the
perception of Mandiri bank customers from
customers of bank Mandiri in Jakarta, about the
application of electronic banking services system.
The research with quantitative method resulted in a
finding that the majority of respondents gave a good
response. The indicator is the existence of five
dimensions of service quality provided by Bank
Mandini. The fifth such services are: first, in terms
of reliability of electronic banking services because
its handling is performed by professional, adequate
services of location and means, low cost, speed of
service delivery; second, bank and ATM locations
still to be improved; Third, the quality of
responsiveness is still considered normal by the
customer, because complaint service has not been
handled well; fourth, good guarantee for the
customer as more than 50% of e-banking product is
fully guaranteed by the company; Fifth, dimensions
of empathy which is good because the employee
response to complaints from customers.
Somali et al. (2008) in their study was to identify
the factors that encourage customers to adopt online
banking in Saudi Arabia. The findings of the study
suggests that the
quality of the Internet connection, the awareness of
online banking and its benefits, the
social influence and computer self-efficacy have
significant effects on the perceived
usefulness (PU) and perceived ease of use (PEOU)
of online banking acceptance.
However, the researcher sees that they use
mostly convensional banking. Therefore, the present
study discusses the use of i–banking and m-banking
ini Islamic banking for the online entrepreneurs.
2 METHODOLOGY
The approach in this study is qualitative, with
objects of 50 online entrepreneurs of end-
users, resellers, agents and distributors who use i-
banking and m-banking from conventional banking
and sharia then pursed into user i-banking and m-
banking in Islamic banking. In determining the
informants in this study, snowball method, also
known as chain referral procedure or networking
procedures is applied. In this procedure, with whom
the participant or informant has made contacted or
the first time they met the researcher is important to
refer the researcher to others who have the potential
to participate or contribute and learn or provide
information to the researcher.
The researchers interviewed 76 respondents
directly or indirectly. Direct interview was
conducted orally and in writing, either face to face
or through electronic mail and involve social media
such as Facebook. Indirect interviews includes
information from respondents interviewed about
other businessman. By using snowball method, the
researcher who initially found the 76 respondents
decided to use 50 of them. This is based on several
considerations, one of which is the absence of
ibanking and mbanking of Islamic banks by the
ICIEBP 2017 - 1st International Conference on Islamic Economics, Business and Philanthropy
636

respondens. While they do not have ibanking and
mbanking of Islamic banking, averagely the have
account in Islamic banking. Therefore, the were
selected among 76 initial respondents interviewed
before ot was determined to only become 50
respondents.
When the researcher go into the field and
interviewed 50 respondents who are online
entrepreneurs with a wide range of
products/services, obstacles in the use of internet
banking and mobile banking in Islamic banking is
revealed. There are some reasons why some
entrepreneurs choose to consistently
use internet banking and mobile banking to support
their business. This analysis was obtained after
investigators interviewed several online businesses,
distributors, agents, resellers or end consumer (end
user) online entrepreneurs.
This research using observation, indept
interviewing and documentation (Soeratno, 1995) to
collect the information from 50 online entrepreneurs
who using i-banking and m-banking from Islamic
Banking. Some informants are only concentrated in
some areas in East Java such as Sidoarjo due to
close to the location of researchers. Only few
informants are from outside Java, especially in
remote areas, due to the lack of online business
development outside Java. The researcher find it
difficult to find informants from the regions of Aceh
and Papua, due to the lack of online business there
due to high shipping rates in some areas.
This study use case studies for the data analysis,
which is one of the strategies and methods of
qualitative data analysis that emphasizes on special
cases that occur in the object of analysis. In this
study, the type of case study used is the case study
of observation, which according to Bogdan and
Biklen (Bungin, 2011) is more emphasis on the use
of observations in research to capture the detailed
and actual empirical information from the unit of
research analysis, whether it concerns the lives of
individuals and certain social units in society.
3 RESULTS AND DISCUSSIONS
Humans always crave ease in every affair that they
are. Advances in technology force them to aware of
all that can be done very quickly. By using
sophisticated smartphones, tablets and internet
quota, one no longer needs to pace back to the bank,
because they can do their own services they want.
Someone can transfer some money, check balances,
see account mutation, deposit money deposit, pay
bills electricity, telephone, and so forth. Transactions
relating to deposits and withdrawals are still carried
out by the user, which is deposited on the teller and
through CDM machines (cash deposit machine). The
existence of i-banking and m-banking helps a person
to maximize their time to focus on running the
business they have run. Time saving of i-
banking and m-banking customers may also affect
the cost savings the customer journey. One of the
most important things is that customers can make
banking transactions whenever they want, while
there is an internet quota network and they can also
transact in their own time.
The use of internet banking and mobile
banking for online businesses is something that is
very significant, because the online business is
driven by transaction-based technology. One of them
is payment system supported by technology from
banking. Newly-born Islamic Banking in Indonesia
since 25 years ago-beginning with the establishment
of Muamalat-bank, is certainly trying to improve the
existing services, especially the service for
electronic banking in which is internet banking and
mobile banking services.
Regardless Islamic banking effort to provide the
best service to its customers, some Islamic banks has
also developed their banking service to socialize i-
banking services and m-banking for their customers.
This is good news for the online business that is
being looked forward to these services. However, i -
banking and m-banking in sharia banks still leaves
some limitations and shortcomings. Limitations and
constraints includes the following factors:
3.1 Limitations of Internet Banking and
Mobile Banking Provided by
Islamic Banking for Clients of
Online Businessmen
Some respondents claimed that the presence of one
bank that dominate conventional i-banking and m-
banking is one of the biggest obstacles in the use
of i-banking and m-banking for online
transactions. Such conventional banks monopolize
the traffic of payment systems in online
business. When i-banking and m-banking of sharia
banks want to match the services of the bank, this is
very heavy. Many sellers or buyers are actually
thwarting their transactions early on when not
facilitated with the accounts of these conventional
banks, for example retail transactions in small
nominal above 100 thousands.
Electronic banking services in online business is
the lifeblood of online business itself, in addition to
Factors Hindering the Use of Internet Banking and Mobile Banking Service of Islamic Banking for the Online Businessman
637

shipping services which is also one of the drivers for
the online business. Online business requires clarity,
ease, speed and accuracy of payment system. Some
respondents said they initially use the electronic
services of Islamic banks, both i-banking and m-
banking. However, as many of their customers
choose to use a conventional bank, in the end the
online sellers also follow the trend. This is as
described by some respondents from several regions:
"At first I used electronic banking from sharia
banks for my online business payment
system. However, because consumers object and
many choose to use conventional banks, I finally opt
conventional banks. Sharia bank is only for saving."
Another respondent describe that the difficult of
using i-banking and m-banking in sharia banking, is
because many of her partners of online business is
using i-banking and m-banking from the
conventional banking. He was said:
"I use i-banking and m-banking from
conventional and sharia banks, but over time as
most of my college use electronic banking from
conventional banks, I adjust them. Technically i-
banking and m-banking from conventional and
sharia banks are the same. No obstacles. Only bank
transfers are charged. If many of my partners use i-
banking and m-banking from sharia banks, then I
will use electronic banking from sharia banks."
3.2 Limitations on Internet Banking
Network in Islamic Banking for
Clients of Online Businessmen
Another obstacle in the use of i-banking and m-
banking Islamic banks is the operational nature of
the application and the service i-banking and m-
banking. It deals with technical, design and ease of
application. Some users of i-banking services and m-
banking of Islamic banks complain the difficulties of
using i-banking services and m-banking in a sharia
bank. Technical and design is very influential on the
use of i-banking services and m-banking itself. The
easier the users learn and use this service, the more
users of i-banking and m-banking in Islamic
Banking.
However, some respondents said that the i-
banking services and m-banking in other syariah
banks simply facilitate them in conducting
transactions online. They do not get a problem in its
use. This means that some of the i-
banking services and m-banking in one syariah bank
has been well received by the community, although
in some other banks are still complained in the
utilization.
Operation complained is precision and accuracy
of the application, there is one interesting finding
when the investigators interviewed a woman who
are also users of i-banking in Islamic banks. She
complained about the accuracy of i-
banking services in one of the Islamic banks:
"I have a baby equipment store and Muslim
clothing, which use online and offline
transaction. My husband died of illness and I am
pregnant with my first child. I live in the Brebes
pelosol, and very far from sharia bank office. When I
want to transact with sharia bank, in a rather old
pregnancy position I go to Brebes - which takes 2
hours - to open an account and simultaneously
register for i-banking services from the bank.
Previously I used i-banking from one of the
conventional banks. I-banking service from sharia
bank I use to transact at one of the agents in
Surabaya, unfortunately after I transfer money, my
colleague in Surabaya stated that he has not
received the money and there has been no report
entered in his account. And when the money has
been received, the goods will be directly shipped and
I will be able to directly market the goods because
most of the orders from buyers. With a frantic
condition (because of the sharia bank office is far), I
just resigned to wait for news about the money I
have transferred (pretty big value for me). The next
day I was newly informed by my agent's colleague in
Surabaya that money has been transferred. Finally
my stuff is delayed to be sent one day, and for me
this is detrimental to me. "
Limitations of i-banking services of one of the
Islamic banks have resulted in inefficiency and un-
integrity, which is detrimental to the service
users. Therefore, some improvements have to be
made by sharia bank related to the service. The
ability of sharia banks in carrying out changes to the
better will result in the trust of customers of online
business. Starting with the effort to improve
error of i-banking system, making the system more
flexible but still upholding the security of user
information the service. Adjustments to the needs of
online businesses is one of the things that ought to
be considered, because the current era is the era of
the purchase through technology or e-commerce, so
that the changeable conditions should be interpreted
as an opportunity to develop their existing systems.
ICIEBP 2017 - 1st International Conference on Islamic Economics, Business and Philanthropy
638

3.3 Spiritual Motivation in Utilizing I-
Banking and M-Banking Services in
Sharia Banking for Online
Businessmen
Electronic banking service in online business is
the lifeblood of the online business. Online
transactions will always involve electronic banking,
as payment is made through banking services. Of the
50 respondents, several respondents fall in this type
of category. They always act very spiritually,
because they always intend everything they do
because of worship.
Some online businesses that have spiritual
motivation always volunteering using electronic
banking of Islamic banking. They make use of the
service under any circumstances, even with some of
the constraints and limitations of the service. The
results of the interviews conducted to several
respondents indicated
that electronic banking users feel comfortable in
using this type of service from Islamic banks. Here's
an interview from one of the respondents in
Sidoarjo:
"I always transact online using the services of
sharia banks, and I only share 2 of my accounts in
sharia banks for payment services in my online
business. When a customer requests payment using a
service in a conventional bank, then I will not give
it. If the consumer objected to the inter-bank transfer
fee of Rp. 6500, then I will sacrifice to pay the fee. I
turn a blind eye to the lack of service in Islamic
banks, because that is an important blessing. "
Several other respondents also stated that they
are more comfortable to use electronic
banking services of Islamic banks although there are
some obstacles in the utilization of services in
Islamic banks. The principle held by respondents of
this type is very strong, from some interview results,
following interviews that represent the power of the
spiritual motivation of the respondents. Here's one of
the interviews from online business in Bandung:
"I only use electronic banking services from
sharia banks. The benefits of using the services of
sharia banks are halal, easy, practical, affordable,
and transparent. The difference between sharia and
conventional banks is if I use the services of sharia
banks, then I am more calm and comfortable in
worship. Marriage is better than adultery. Why
should use the haram if there is a halal. So, I do not
see how many benefits and advantages.
Alhamdulillah, all this time all my affairs have been
well facilitated by sharia banks, for transfer,
payment, purchase, and so forth. "
Some users of electronic banking services in
Islamic banks with this spiritual motivation have a
strong religious background. For example there are
some online sellers who actually are recognized by
the surrounding community with the name ustadzah
or ustad. Another respondent for this group is an
online salesman who has been very successful and
well established, so he does not feel afraid of being
abandoned by his customers. Respondents with this
type also believe that transactions in Islamic banks
must BIRng blessings, and all associated with
conventional banks is usury.
4 CONCLUSIONS
This research resulted in a conclusion that is
obtained after researchers conducted several prose s
interviews with 50 respondents. There are some
obstacles in the use of internet banking and mobile
banking for online businesses in Islamic
banks. These constraints are associated with the
obstacle limitation of i-banking and m-banking in
Islamic banks, as well as barriers to the limitations
of the network i-banking and m-banking in Islamic
banks for online businesses. Online businessmen as
one community that are closely linked to one
another is a very good niche for the development
of i-banking and m-banking in Islamic banks. The
solution to the first obstacle is quantity of i-
banking and m-banking in the growing Islamic
banks, especially those users are online
businesses. The second solution is improvement on
system and service network of i-banking and m-
banking, thus that this problem will be resolved.
Limitations of this study are that the majority of
respondents were female and a large part of them is
an online seller of clothes. Further research
targeting the respondents from big businessman,
who are members of the association and the
association of Muslim entrepreneurs are necessary,
to prove how committed they are in the utilization of
services in Islamic banking.
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