Study of Consumer Perception of Digital Payment Mode.

Author:
Piyush Mohan Patel
Ashoka Center for Business and Computer Studies, Nashik.

Abstract:
The last decade has seen tremendous growth in use of internet and mobile phone
in India. Increasing use of internet, mobile penetration and government initiative
such as Digital India are acting as catalyst which leads to exponential growth in
use of digital payment. Electronics Consumer transaction made at point of sale
(POS) for services and products either through internet banking or mobile banking
using smart phone or card payment are called as digital payment. The consumer
perception of digital payment has a significant and positive impact on adoption of
digital payment. The structured questionnaire was used as research tool for
understanding consumer perception of digital payment. Primary data was
collected from 150 respondents in Nashik. However education was found to
significant influence for adoption of digital payment.

Keywords:
Cashless Transactions Consumer Perception; Digital Payment; Digital Wallets.

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INTRODUCTION:
It has been said that every disruption creates opportunities and one such
disruption was the announcement of demonetization by Prime Minister Mr.
Narender Modi on 08 November 2016. Demonetization created huge growth
opportunity for digital payment in India and the digital wallet companies garbed
the opportunities with both the hands to expand their market share.
Demonetization has presented a unique platform for adoption of digital payment,
as an alternative to cash for Indian consumers.
Adoption of cashless transaction has been significantly pushed by Prime Minister
Mr. Narender Modi as part of government reforms after demonetization of high
value currency of Rs. 500 and 1000 (86% of cash circulation). The demonetization
resulted in unprecedented growth in digital payment. By February this year,
digital wallet companies had shown a growth of 271 percent for a total value of
US$2.8 billion (Rs. 191 crores) [1], Indian government and private sector
companies such as Paytm, Google pay and phonepay had been aggressively
pushing several digital payment applications, including the Aadhaar Payment app,
the UPI app, and the National Payments Corporation of India (NPCI) developed
the Bharat Interface for Money (BHIM) app. Digital transfers using apps has
brought behavioral change and helped in the adoption of digital payment. This
has resulted in ease of transfer of money in rural areas which was not touched
earlier by the digital payment method. Now many foreign investors want to invest
in digital payment industry which is new attractive destinations because of scope
of tremendous expansion in India.
There are number of facilitators which are leading to the growth of digital
payment and transition from cash economy to less cash economy. These
facilitators include penetration of internet connectivity on smart phones, non-
banking financial institution facilitating digital payment, one touch payment, rise
of financial technology sector and push by government either by giving incentives
or tax breaks. These all factors are creating positive atmosphere for growth of
digital payment in India.

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Digital Payment Modes in India
There are several mode of digital payment available in India. These are:
Online or mobile wallets: They are used via the internet and through smartphone
applications. Money can be stored on the app via recharge by debit or credit
cards or net-banking. Consumer wallet limit is Rs. 20,000 per month and the
merchant wallet limit is Rs. 50,000 per month after self-declaration and Rs.
100,000 after KYC verification.
Prepaid credit cards: Pre-loaded to individual’s bank account. It is similar to a gift
card; customers can make purchases using funds available on the card -and not
on borrowed credit from the bank. Can be recharged like a mobile phone
recharge, up to a prescribed limit.
Debit/RuPay cards: These are linked to an individual’s bank account. Can be used
at shops, ATMs, online wallets, micro-ATMs, and for e-commerce purchases.
Debit cards have overtaken credit cards in India. The number of debit cards in
December 2015 increased to 630 million compared to 22.75 in 2014.
AEPS: The Aadhaar Enabled Payment System uses the 12-digit unique Aadhaar
identification number to allow bank-to-bank transactions at PoS. AEPS services
include balance enquiry, cash withdrawal, cash deposit, and Aadhaar to Aadhaar
fund transfers.
UPI: The United Payments Interface (UPI) envisages being a system that powers
multiple bank accounts onto a single mobile application platform (of any
participating bank). Merges multiple banking features, ensures seamless fund
routing, and merchant payments. It facilitates P2P fund transfers.

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Literature Review:
Sanghita Roy, Dr. Indrajit Sinha (2014). Stated that E- payment system in India,
has shown tremendous growth, but still there has lot to be done to increase its
usage. Still 90% of the transactions are cash based. Technology Acceptance Model
used for the purpose of study. They found Innovation, incentive, customer
convenience and legal framework are the four factors which contribute to
strengthen the E- payment system.
E-payment systems are important mechanisms used by individual and
organizations as a secured and convenient way of making payments over the
internet and at the same time a gateway to technological advancement in the
field of world economy (Slozko & Pello, 2015).

Objectives:
 To know the customers perception towards digital payment.
 To know whether people prefer to use digital payment.
 To analyze the impact of customers education on usage of digital payments.

Hypothesis:
 H0: There is no significant impact of customer education on usage of digital
payments.
 H1: There is significant impact of customer education on usage of digital
Payment.

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Research Methodology:
In this study, the data is obtained from both primary and secondary sources. The
primary data is collected using questionnaire method, which has been created
using Google Forms and distributed among internet and social media users in
Nasik District. Whereas, the secondary data is collected from the newspapers,
magazines, websites etc.
Sample Design: The method of random sampling has been used to collect the
data from the respondents.
Sample Size: The sample size is 150. The sample of the study consists only of the
users of digital payment modes.
Data Analysis and Interpretation: The data is analyzed and interpreted using
Google Drive and Microsoft Excel 2007.

DIGITAL WALLETS SERVICE PROVIDERS IN INDIA AND THEIR COMPANY

PROFILE:
 Paytm:
Owned by One97 communications
Founder Vijay shekar sharma
Established in 2010
Head quarters Noida, India

 Phonepe:
Owned by Flipkart
Founder Sameer Nigham, Burzain Engineer,
Rahul Chari
Established in 2015
Head quarters Bangalore, India

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  Freecharge:
Owned by Axis bank
Founder Kunal shah, Sandeep Tandon
Established in 2010
Head quarters Mumbai, India

Data interpretation and analysis:

Table no.1 Profile of respondents.
Gender No. of respondents % of respondents
Male 94 63%
female 56 37%

Interpretation: Out of the total respondents 63% are male and 37% are female.

Table no. 1
Male

37% Female
63%

Table no.2 Aware regarding the functioning of E-payment modes

Particulars No. of respondents % of respondents
Fully aware 79 53%
Partially aware 56 37%
Not aware 15 10%

The above table reveals that from the sample collected, the respondents fully
aware regarding functioning of e-payment modes is high i.e.53% while 37%

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respondents are partially aware and only 10% respondents are not aware
regarding the functioning of e-payment modes in Nasik district.

Table no.3 Usage of smartphones while making online payment

Particulars No. of respondents % of respondents
Yes 128 85%
No 22 15%

The above chart represent that 77% of the respondents use digital wallets for
completing a monetary transaction while 23% of the respondents do not digital
wallets.

Table no.3

Yes
15%
No

85%

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 Table no.4 why people prefer e-payment over other modes of payment.
Particulars No. of respondents % of respondents
Time saving 30 20%
Ease to use 95 63%
secure 25 17%

The above chart represent the preference of e-payment over other modes of
payment. People prefer to use e-payment as it is easy to use, time saving and
transactions done through it are also secure.

Table no.4

Time saving
19% 9%
Ease to use
Secure
72%

Table no.5 Preference about e-payment mode for making transactions.

Particulars No. of respondents % of respondents
Paytm 25 17%
PhonePe 35 23%
Google pay 30 20%
All of the above 60 40%

The above chart represent the preference of respondents about e-payment mode
for making transactions. 40% of respondents uses all the above applications
mentioned above whereas 20% respondents prefer to use Google pay, 23%
respondents prefer to use phonepe, 17% respondents prefer to use paytm.

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 Table no.6 Purpose of using e-payment
Particulars No. of respondents % of respondents
Money transfer 24 16%
Recharge 45 30%
Utility and bill payment 15 10%
All of the above 66 44%

The above chart represent the purpose of using e-payment for various types of
transactions. Here we have considered transactions such as money transfer,
recharge, utility and bill payment. From this we get to know that people prefer e-
payment for all the transactions we have considered.

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 Table no. 7 what people keep in mind while making e-payment
Particulars No. of respondents % of respondents
Offers 95 63%
Cash back 55 37%

The above table represents what people keep in mind while making e-payment.
Here we have considered 2 factors offers and cash back. From this survey we get
to know that people prefer to use e-payment for available offer.

Table no.7

offer
37% cash back

63%

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Findings of the study:
 The respondent’s awareness about mobile wallet payment services is high.

 Majority of the respondents are aware of e-payment modes.

 The respondents prefer using digital-wallets for Recharge purpose followed

by Online Shopping and making payments.

 The Availability, Convenience, Service acceptance, Security and Reward

points are the major factors which influences most of the respondents to
use digital -wallets.

 Majority of the respondents use digital -wallet frequently.

 A large number of the respondents are satisfied with the service provided
by them whereas a few number of the respondents are highly satisfied with
the service used.

 Majority of the respondents have not come across any obstacle while using
digital -wallet and major problem faced by some of the users is network
server issue.

 As most of the respondents are satisfied with the service provided, majority
of the respondents prefer to continue using digital -wallet.

 The willingness to use the services is very high if the problems are
addressed.

 Security, necessity, time and services used are the factors which influence
preferences of the respondents.

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Conclusion:
The study was accomplished to explore consumer awareness, perceptions and
willingness to use digital wallets. Specifically the study explored awareness,
usage, likelihood of using smart phones for completing the monetary
transactions. With the increased penetration of internet connectivity and smart
phones has led to an increase in the number of digital wallet users. Digital-wallet
is getting more and more trendier among the consumers.
As per the findings of the study, digital-wallet is getting popularity among the
young lots such as students and employees. When a user is making an online
payment via digital-wallets, the respondents are affected by various assorted
factors. One of the main obstacle is security issues, due to which the users get
anxious about his or her confidential information which may get disclosed.
Therefore the digital-wallet providers need to understand and meet the users
trust and expectations.

References:
 http://www.icommercecentral.com/open-access/study-of-consumer-
perception-of-digital-payment-mode.php?aid=86419

 http://www.ijcea.com/wp-content/uploads/2018/05/harshitha-MCOM.pdf

 http://www.ijrar.org/papers/IJRAR19YP021.pdf

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