Understanding diffusion of information systems-based services: evidence from mobile banking services

Purpose The Bass model is widely used in the literature to capture the diffusion of innovations and shows excellent predictive power in the context of durable goods. However, the model's efficacy fades when services are the target of analysis. Services that users adopt and subsequently utilize regularly are regarded as a continuous process that entails the possibility of dis-adoption and re-adoption. These aspects are not accounted for in the traditional Bass model. Thus, this study extends the Bass model to information system (IS)-based services by taking into account the unique nature of service adoption: the possibility of dis-adoption and re-adoption. Design/methodology/approach The proposed hypotheses were empirically tested using a longitudinal study of mobile service usage over 18 months. The longitudinal design provides a stronger position than the typical cross-sectional survey to understand the dynamics and infer causality. Findings Results show that the inclusion of the dis-adoption and re-adoption rates in the Bass model significantly improves the explanatory power over the traditional Bass model. Originality/value Consumption of services delivered through IS has exponentially increased. However, understanding on the diffusion pattern of IS-based services is limited. Our study is the first to examine the effect of dis-adoption and re-adoption together in the innovation diffusion process. The study offers significant implications for researchers and practitioners. The extended Bass model can help service firms develop an accurate prediction about the number of adopters at different periods of time.