SUSHILA DEVI BANSAL COLLEGE,

INDORE

Batch 2023 - 2025

Major Research Project

On
“A STUDY OF IMPACT OF DEMONETIZATION ON DIGITAL
PAYMENTS”
Submitted in the partial fulfillment for the
Requirements of the degree of MBA
DAVV, Indore

Research Guide Research Scholar

Prof :- Rishita Agarwal Student Name :- Vicky Surage

Enroll No :- DC2016117
 1. DECLARATION

I, Kasif Saifi, an MBA student, have made my Major Research Project entitled “A study of
impact of demonetization on digital payments ” under the guidance of Rishita Agarwal. I
hereby declare that all the data and information used in the preparation of my research project
was collected by me. I declare that I have not copied the project and it is my own work.

Student Name - Vicky Surage

Enroll NO -DC2016117
MBA
Sushila Devi Bansal College
Indore (M.P)
 2. CERTIFICATE

This is to certify that the Major Research Project entitled A study of impact of
demonetization on digital payments ” submitted at “Sushila Devi Bansal College”, for the
partial fulfillment of the requirement of degree of Master’s of Business Administration, is a
work carried out by, Student Name student of MBA, under my supervision and guidance.
This work is an effort based on research and study that was carried on during the MBA
programme. This work is solemnly completed by the student himself and it is the
responsibility of the student, the work is unique and not copied from any other source of
content.

Rishita Agarwal Dr.Anubhuti Bauskar

Assistant Professor HOD

Sushila Devi Bansal College Sushila Devi Bansal

College

Indore (M.P) Indore (M.P)

 3. ACKNOWLEDGEMENT

I am highly indebted to Rishita Agarwal, under whose guidance this project report was
completed. I am thankful to all the professionals, who helped me by putting in their time and
effort and by providing me information and filling my questionnaire, based on which I
carried out my study. I am thankful toAnubhuti Bauskar for providing Institutional support.
I thank them for their propitious response. Last but not the least; I would like to thank all
those who have directly or indirectly helped me in conducting this project.

Date
Place : Indore Vicky Surage
 Table of Contents

S. No. Particulars Page No.

1 Abstract

2 Introduction

3 Literature Review

4 Rationale of the study

5 Objective of the study

6 Research Methodology

7 Data Analysis and Interpretation

8 Major Findings

9 Conclusion

10 Scope for further Research

11 References

12 Annexure
 1. ABSTRACT

Demonetization is the hottest new topic in the country. Financial analysts everywhere are
talking about what the long-term impacts could be while several businesses and people are
caught up in the unprecedented cash crunch that has been caused. With the retail businesses
taking an all new dimension thanks to the growth of the internet, the business models and the
payment methods have all changed. And this complex model is now further complicated by
the introduction of demonetization. Though it is true that this can lead to a more positive
effect in the long term, talking about the short term effects, it has been predominantly adverse
for the customers and businesses.

Online money transactions and digital payments are not as difficult as they were before. This
makes it easy for you to smartly tackle the sudden ban on old currencies. And online
transactions do come with a lot of benefits. This is the right time to unleash the full potential
of your debit cards. Make online payments, apply for easy loans, pay all your bills and do a
lot more with just a debit card.

This paper looks at the impact that Demonetization has had on the various payment methods
in India. Specifically, it aims to see how the various digital platforms have evolved with the
advent of the demonetization Method: Various digital platforms of payment like payment
apps, net banking, etc were studied extensively. Their evolution before and after
demonetization is looked at, and compared against one another. Findings: Demonetization
has given a big boost to the digital payment platforms in India. They are fast, reliable, easy to
learn and navigate. It is able to fulfill the requirement specifications. Which platform an
individual decides to choose is dependent on many factors. While an extremely handy and
useful software component, it is not without its share of faults and glitches that needs to be
resolved soon. Security is still a major concern regarding these platforms. Applications:
These payment portals help to make payments more convenient and easy to use. One does not
have to go to the bank to do monetary transactions.
Flipkart, Amazon, Snapdeal and many other online shopping sites are ruling the retail
segment. These e-commerce sites, however, took an unplanned spike in their revenue soon
after the implementation of the ban on the higher denomination currency notes.
Most of the orders that were placed with the cash on delivery option could not be delivered
because the online retailers could not accept old notes. All the overheads and the costs
incurred in shipping the orders go to waste in case of undelivered orders. This is indeed a
significant loss for the e-commerce players.If there is one thing that has been growing at a
good pace after demonetization, it is online payments. Rather than being tied up in the cash
crunch and standing in the never ending ATM queues, more people switched to online
payments. There has been a rise in the number of debit and credit card transactions. Even
smaller vendors have introduced cashless payment methods.Online retailers also have
introduced impressive discounts for all the cashless payments. This encourages more
customers to choose a payment method other than COD and claim their discounts and in turn
helping the e-commerce businesses retain a reasonable cash flow. There has been significant
growth in the mobile wallet sector. Transferring money as well as making payments for
online orders is easy with mobile wallets. More people have begun to fill up their mobile
wallets resulting in the growth of the mobile wallet providers like Paytm, Mobikwik and
more. Unified Payments Interface (UPI) will see a steady growth. The support of the
government has also been in favor of promoting UPI for online payments.Online payments
are quick, hassle free and time saving. And EMIs are the best part about online payments.
This avoids causing a financial strain when you make a large value purchase. Know how easy
it is to get instant loans for all your appliance, furniture and gadget purchases. So do not let
the ban on currency notes of higher denominations stop you from buying all that you wanted.
 2. INTRODUCTION

On 8 November 2016, the Government of India announced the demonetization of all ₹500
and ₹1000 banknotes of the Mahatma Gandhi Series.[2] The government claimed that the
action would curtail the shadow economy and crack down on the use of illicit and counterfeit
cash to fund illegal activity and terrorism.[3][4] The sudden nature of the announcement and the
prolonged cash shortages in the weeks that followed created significant disruption throughout
the economy, threatening economic output.Indian Prime MinisterNarendra Modi announced
the demonetization in an unscheduled live televised address at 20:00 Indian Standard Time
(IST) on 8 November.[8][9] In the announcement, Modi declared that use of all ₹500 and ₹1000
banknotes of the Mahatma Gandhi Series would be invalid past midnight, and announced the
issuance of new ₹500 and ₹2000 banknotes of the Mahatma Gandhi New Series in exchange
for the old banknotes.The BSE SENSEX and NIFTY 50 stock indices fell over 6 percent on
the day after the announcement.[10] In the days following the demonetization, the country
faced severe cash shortages with severe detrimental effects across the economy.[11][12][13]
People seeking to exchange their bank notes had to stand in lengthy queues, and several
deaths were linked to the rush to exchange cash.Initially, the move received support from
several bankers as well as from some international commentators. The move has also been
criticised as poorly planned and unfair, and was met with protests, litigation, and strikes
against the government in several places across India. Debates also took place concerning the
move in both houses of parliament. The move reduced the country's industrial production and
its GDP growth rate.By the end of August 2017, 99% of the banned currency had been
deposited in banks: only approximately ₹14,000 crore of the total demonetised currency had
been discarded, leading analysts to state that the effort had failed to remove black money
from the economy.The plan to demonetise the ₹500 and ₹1000 banknotes was initiated
between six and ten months before it was announced, and was kept confidential, with only
ten people being completely aware of it. The preparations for printing new ₹500 and ₹2000
bank notes began in early May 2016. The Union cabinet was informed about the plan on 8
November 2016 in a meeting called by the Indian Prime Minister Narendra Modi.

Public announcement

On 8 November 2016, Modi announced the demonetization in an unscheduled live national

televised address at 20:15 Indian Standard Time.[8][9] In the announcement, Modi declared
circulation of all ₹500 and ₹1,000 banknotes of the Mahatma Gandhi Series as invalid
effective from the midnight of the same day, and announced the issuance of new ₹500 and
₹2,000 banknotes of the Mahatma Gandhi New Series in exchange for the old notes.[33]

After Modi's announcement, the Governor of the Reserve Bank of India, Urjit Patel, and
Economic Affairs Secretary, Shaktikanta Das, stated that while the supply of notes of all
denominations had increased by 40 percent between 2011 and 2016, the ₹500 and ₹1,000
banknotes increased by 76 percent and 109 percent, respectively, owing to forgery. They said
that forged cash was used to fund terrorist activities, and that the demonetization was meant
to counter this. After demonetization, only 0.0035% of the ₹1,000 banknotes were found to
be fake.

Patel also stated that the decision had been made about six months ago, and the printing of
new banknotes of denomination ₹500 and ₹2,000 had already started. However, only the top
members of the government, security agencies and the central bank were aware of the move.
But media had reported in October 2016 about the introduction of ₹2,000 denomination well
before the official announcement by RBI. This statement has led to much debate, because the
Reserve Bank governor six months before the announcement was RaghuramRajan, while the
new banknotes have the signature of the newly appointed governor, Urjit Patel.

The Reserve Bank of India stipulated that the demonetised notes could be deposited with
banks over a period of fifty days until 30 December 2016. The banknotes could also be
exchanged for legal tender over the counter at all banks. The limit for such exchange was
₹4,000 per person from 8 to 13 November, was increased to ₹4,500 per person from 14 to 17
November, reduced to ₹2,000 per person from 18 November.[2][38][39][40] International airports
also facilitated an exchange of notes for foreign tourists and out-bound travelers, amounting
to a total value of ₹5,000 per person.[41] The exchange of banknotes was stopped completely
on 25 November: Modi had previously stated that the volume of exchange would be
increased after 24 November

Cash withdrawals from bank accounts were restricted to ₹10,000 per day and ₹20,000 per
week per account from 10 to 13 November.[2] This limit was increased to ₹24,000 per week
from 14 November 2016.[38][39]
A daily limit on withdrawals from ATMs was also imposed varying from ₹2,000 per day till
14 November,[43] and ₹2,500 per day till 31 December.[38][39] This limit was increased to
₹4,500 per day from 1 January,[44] and again to ₹10,000 from 16 January 2017. Limits placed
vide the circulars cited above on cash withdrawals from Current accounts/ Cash credit
accounts/ Overdraft accounts stand withdrawn with immediate effect. RBI increased the
withdrawal limit from Savings Bank account to Rs 50,000 from the earlier Rs 24,000 on 20
February 2017 and then on 13 March 2017, it removed all withdrawal limits from Savings
Bank AccountsUnder the revised guidelines issued on 17 November 2016, families were
allowed to withdraw ₹250,000 (₹2.5 lakh) for wedding expenses from one account provided
it was KYC compliant. The rules were also changed for farmers who are permitted to
withdraw ₹25,000 per week from their accounts against crop loans

The Specified Bank Notes (Cessation of Liabilities) Ordinance, 2016 was issued by on 28
December 2016 ceasing the liability of the government for the banned bank notes, and also
imposing fines on people found carrying out transactions with them after 8 November 2016;
or holding more than ten of them after 30 December 2016. The ordinance also provided for
the exchange of the bank notes after 30 December for non-resident citizens and others on a
case by case basis.[47][48] Fuel pumps, government hospitals, railway and airline booking
counters, state-government recognised dairies and ration stores, and crematoriums were
allowed to accept the banned ₹500 and ₹1,000 bank notes auntil 2 December 2016

A fortnight before the official announcement, a news report in the Hindi daily DainikJagran
quoting RBI sources speaking of the planned release of new 2000 rupee notes alongside
withdrawal of 500 and 1000 rupee notes. Similar news was reported in The Hindu Business
Line on 21 October 2016, also describing a forthcoming 2000 rupee note and the possible
withdrawal of 500 and 1000 rupee notes] The chairman of the State Bank of India had also
openly spoken in April 2016 about the possibility of demonetization of ₹500 and ₹1000
notes.Prominent businessmen started after the announcement of demonetization that they had
received prior warning of the move, allowing them to convert their money into smaller
denominations. A BJP MLA from Rajasthan, Bhawani Singh Rajawat, claimed in a video that
wealthy businessmen were informed about the demonetization before it occurred. He later
denied the comments. More than 30 politicians belonging to the BJP were arrested and
investigated for having unaccounted money in the new 2000 rupee denomination
In the year after demonetization, digital transactions have grown considerably. Indeed,
disruptions in the digital space have not only revolutionised the way we manage our finances,
they have also made contactless and cashless transactions the preferred choice of many
among us. With digital wallets, quick response (QR) codes, near field communication (NFC)
technology, sound wave systems, virtual cards, unified payment interface (UPI) and Aadhaar
Pay offering top-notch secure payments options, the smartphone has become the most sought
after all-in-one device.

"We have registered a 3.5X surge in digital payments this year and we will continue adding
new online and offline use-cases, enabling more consumers and merchants to experience the
power of digital payments," says Kiran Vasireddy, COO, Paytm. Along with the growing
usage of digital wallet in the past one year, the number of ATM transactions have also risen,
showing the coexistence of cash and digital in the Indian economy. As per RBI reports,
digital transactions have grown 13.5 per cent from Rs 109.82 trillion in August to Rs 124.69
trillion in September; the highest was in March at Rs 149.59 trillion. Mobikwik currently has
65 million app users, which has more than doubled after demonetization. "Over the past one
year, the industry has only grown over 55 per cent and has added 150 million users in the
e-wallet platforms, along with 10 million merchants" says UpasanaTaku, Co Founder,
Mobikwik

Digital wallets and credit/debit cards have been the alternative to cash after demonetization to
cope with the cash crunch. "There was a surge right after demonetization. After cash
circulation was back in the market the peak has come down but the numbers are almost 35
per cent higher than what it was pre-demonetization" says Praveen Dhabhai, COO of
Payworld. A lot of people use wallets on a daily basis for a wide range of services including
online recharges, utility payments, travel bookings and movie tickets
 3. LITERATURE REVIEW

Deepika Kumari (2016) in her studies of Cashless Transaction: Methods, Applications and
Challenges concluded that the as the demonetization applied by government of India,
Government trying to aware its people for cashless transaction by various kinds of
advertisement method but still a large number of people are awaiting for the introduction of
cashless transaction. This paper is a study of cashless transactions and its different methods,
advantages and challenges. This paper will help to understand the basics of the cashless
transaction.

Piyush Kumar (2015) conducted an analysis of the growth pattern of cashless transaction
system and concluded that the cashless transaction system is reaching its growth day by day ,
as soon as the market becomes globalized and the growth of the banking sector more and
more people move from cash to cashless system. The cashless system is not only a
requirement but also a need of today's society. All the online market basically depends on a
cashless transaction system. The cashless transition is not only safer than the cash transaction
but is less time consuming and not a trouble of carrying and trouble of wear and tear like
paper money. It also helps in record of
all the transactions are done. So, it is without doubt said that the future transaction system is a
cashless transaction system.

Saini, B.M(2015) in his studies of ̳Demonetization –Metamorphosis for Cashless India,

conclude that cashless transaction will lead to e - transactions. There has been a drastic
improvement in electronic transactions which may boost cyber crime, so we make people
aware of ways to keep credit, debit cards safe and to train them to teach the measures to keep
our transactions hassle free. We need specially trained cyber police, forensic labs with state of
the art evidence gathering tools, public prosecutors who understand technology and cyber
courts to punish cyber criminals. Hope India will be in line of developed countries in the days
to come

Alvares, Cliford (2009) in their reports “The problem regarding fake currency in India.” It is
said that the country's battle against fake currency is not getting easier and many fakes go
undetected. It is also stated that counterfeiters hitherto had restricted printing facilities which
made it easier to discover fakes.
Ashish Das, and Rakhi Agarwal, (2010) in their article “Cashless Payment System in India
- A Roadmap” Cash as a mode of payment is an expensive proposition for the Government.
The country needs to move away from cash -based towards a cashless (electronic) payment
system. This will help reduce currency management cost, track transactions, check tax
avoidance / fraud etc., enhance financial inclusion and integrate the parallel economy with
mainstream.

Jain, P.M (2006) in the article “E - payments and e - banking” opined that e - payments will
be able to check black ”An Analysis of Growth Pattern of Cashless Transaction System.
Taking fullest advantage of technology, quick payments and remittances will ensure optimal
use of available funds for banks, financial institutions, business houses and common citizen
of India. He also pointed out the need for e - payments and modes of e - payments and
communication networks

Nuthan K, Rashmi P.C, in their article An E-payment System: Literature Review,

“E-payment becoming a daily part of our life. This paper gives the brief description of the
e-payment system. It also explains the types of e-payment gateway system and e-payment
protocols. The security requirements of the e-payments are discussed. The problem of
misusing the data related to the customer in e-payment is addressed.
 4. RATIONALE OF THE STUDY

Advantage of using digital payments

Low cost: The government and companies have been promoting digital payments by offering
lower cost. For example, HDFC Bank has recently waived off charges on online transactions
through RTGS and NEFT. Similarly, you do not need to pay service tax on card transactions
up to Rs 2,000.

Saves time: Transfer of money between virtual accounts usually takes less time than wire
transfer or a postal one, which may take several days. It is also better than standing in queues
or in lines at a bank or post office.

Convenience: The biggest motivator for digital transactions is the ease of doing these
transactions. With proper access to internet, financial transactions can be performed anytime
and anywhere which attracts people to this segment. These transactions can be performed
from anywhere without the need to be physically present there.

Low risk: Using a digital wallet reduces the risk of losing your physical wallet or it getting
stolen. Online fraud in cyberspace also exists but with proper measures e-currency is secure.

User-friendly: The government and the wallet companies have been working on their
services and they have come up with much better and user friendly apps. There is also 24/7
support team to help and deal with any queries.

Controlling expenses: It is also said to be controlling your expenses as you can

automatically keep track of expenses. These accounts contain the history of all transactions
representing the money that has been spent which can be checked anytime. Controlled
expenses result in higher investing, suggest experts.

Discounts: In the initial days of demonetization, the wallet companies lured customers with
attractive offers and discounts which have visibly come down in the current times. Online
websites and portals linked themselves with the mobile wallets and heavy offers and
discounts were given by them. Still, getting those offers and discounts is one of the reasons
for the growing popularity of online and digital transactions.
 History of Demonetization in India

The whole country was taken aback when Prime Minister Narendra Modi on November 8
announced that the currencies in the denominations of Rs 500 and Rs 1,000 will be invalid
post midnight. However, the lower denomination –Rs 10, Rs 20, Rs 50, Rs 100 and coins
–will be valid. He further announced that new notes of Rs 500 and Rs 2,000 would be
introduced shortly. Thus, giving millions of Indians a panic attack.

But what do you think was this the first time an Indian currency was banned suddenly?

Well, the answer is NO. A look into the past will make you realise that India is no new to
demonetization. Demonetization has been implemented twice -1946 and 1978 – in the past.

Image Source

The first currency ban:

In 1946, the currency note of Rs 1,000 and Rs 10,000 were removed from circulation. The
ban really did not have much impact, as the currency of such higher denomination was not
accessible to the common people. However, both the notes were reintroduced in 1954 with an
additional introduction of Rs 5,000 currency.

Rs 500 and Rs 1000 notes were introduced in 1934 and after four years in 1938, Rs 10,000
notes were introduced.
The second:

That came in 1978; the then Prime Minister of India Morarji Desai announced the currency
ban taking Rs 1000, Rs 5000 and Rs 10,000 out of circulation. The sole aim of the ban was to
curb black money generation in the country.

Similarities in 1978 and 2016 ban:

● The note ban by Morarji Desai also aimed to drive away black money out of
circulation in the economy. Hence, The High Denomination Bank Notes
(Demonetisation) Act was implemented.
● Narendra Modi announced the currency ban is an address that was broadcasted across
all news channels. Similarly, Desai announced the ban over the radio after which the
banks were closed the following day.
● Both the affairs were kept confidential.

Differences in the ban:

● Unlike Modi, Desai didn’t have the backing of the RBI Governor. The Governor I.G.
Patel believed that the ban was implemented simply to immobilize the funds of the
opposition party. Patel also believed that people never store black money in the form
of currency for too long.
● It didn’t have much effect on the people and affected only the privilege few. While the
recent ban had shaken the whole country.

Coming back to 2016, there is also a buzz that smaller denomination currency notes like Rs
50 and Rs 100 will also be replaced by incorporating new features and design. And that
reminds us of an incident dating back to early 70s, when there were rumours of withdrawing
Rs 100 note from circulation, and immediately hoards of people were seen rushing to banks
to exchange their Rs 10 and Rs 20 currencies.
 Demonetization On Indian Economy

Demonetization refers to an economic policy where a certain currency unit ceases to be

recognized or used as a form of legal tender. In other words, a currency unit loses its legal
tender status and a new currency comes into circulation. From time to time the Government
formulates fiscal policies that are meant to encourage economic growth. A lot of black
money circulates in the economy and most of it are unaccounted for because the sources of
income are not known to the government. To wipe this money out of circulation, the
government can demonetize currency notes, so that the money holders are forced to deposit
their money in banks or lose their wealth. It is a strategy that worked quite well for many
countries. Demonetization is also referred as the
process of moving people from a cash - based system to a cashless system (digital system).
Keeping hard cash is a practice that is not encouraged by the government and other financial
institutions. Therefore, moving people to a cashless system is a favorable economic policy for
the development of the country. On November 8th 2016, the Prime Minister of India
Mr.Narendra Modi announced one of the boldest moves in the history of India by banning
Rs.500 and Rs.1000 currency notes. The impact of banning the
currency notes was felt by every Indian Citizen. Now Let‘s analyze the political, economic
and social impact of the demonetization in detail.

1 POLITICAL IMPACT
The political impact of demonetization was felt by the whole country with majority of the
educated people offering support to the demonetization. The speeches against black money
made by Prime Minister Mr. Narendra Modi are attracting huge crowds turning into vote
banks for BJP. There is a growing support for BJP from the educated people and especially
the youth for the bold step taken to curb black money. The opposition parties however oppose
the demonetization drive. The continuous adjournment of both
the houses indicates this scenario. Dr. Manmohan Singh, ex-prime minister of India has said
this move as unlawful against democracy. His statement came out in the Rajya Sabha in the
presence of Mr. Narendra Modi. Opposition parties strongly oppose the demonetization
implementation process.
2 SOCIAL IMPACT
The banning of Rs.500 and Rs. 1000 notes was released suddenly and the worst affected was
the common man. The social impact was drastic with marriages facing severe issues with
cash transactions. People conducting marriages must produce
the marriage invitation to withdraw 2, 50,000 and above. This has caused great difficulty
among the public. The impact on the health care sector was huge with hospitals refusing to
accept the old currency. The common man faced severe issues transacting in the hospitals
with old currencies and several cases of death had been registered for not attending the
patients due to demonetization Salaried employees faced the issue on the opening day of the
month with their salaries credited in the bank account but they
were able to withdraw only 2,000 rupees from the ATM machines. Many salaried people
have gone to the bank branch to withdraw their full salary amount with loss of pay.
Social problems in the form of road blockades and quarrels arouse with people waiting in
long queues before the banks and ATM machines. People become restless spending an entire
day withdrawing money. Several deaths have been registered as a result of waiting in long
queue. Pensioners are worst affected with no special provisions made for senior citizens in
banks.

3 ECONOMIC IMPACT
Demonetization is viewed as a measure of sterilizing the money. RBI plays the pivotal role
in this demonetization drive. All the banking experts welcome this demonetization measure.
Considering the banking sector, both public and private sector banks are facing the severe
issue of Non - Performing Assets (NPA) or Bad loans to the tune of 10 lakhs crore including
the stressed assets according to RBI sources. This demonetization
measure will help banks to recover some bad loans and improve their financial position.
Considering the entire economy of India as a whole, demonetization will make most of the
transactions to be done through the formal banking sector. This will increase the
transparency with people and corporate paying tax properly. Income Tax department has
reported that only 4 percent of the individuals pay income tax while this figure has t
o be increased to 28 percent. The demonetization will help achieve this target of the
Income tax department. When black money within India gets curbed, it will result in the
overall economic development of the nation
CASHLESS ECONOMY IN INDIA
Digital India is a flagship program by the Government of India with a vision to transform
India into a digital society and knowledge economy. ―Faceless, Paperless, Cashless‖ is one
of professed role of Digital India. India continues to be driven by the use of cash; less than
5% of payments happen electronically, however the finance minister, in the budget speech,
spoke about the idea of making India a cashless society, with the aim of mopping black
money. Even the RBI has also recently announced a document — “Payments and Settlement
Systems in India: Vision 2018”— with a plan to encourage electronic payments and to make
India move towards a cashless economy in the medium and long term.

Speed and satisfaction of operations for customers, no delays and queues, no interactions

with bank staff required.

∙Reduction of tax avoidance because it is a financial institutions based economy where

transaction trails are left.

∙ It will curb generation of black money

∙Will reduce real estate prices because of curbs on black money as most of black money is

invested in Real estate prices which inflates the prices of Real estate markets

CASHLESS PAYMENT SYSTEM

As the banking system evolved, it became easier, safe and even remunerative to keep one's
money in a bank account and it became still more easier and safe to use „transfer of money in
bank accounts‟ for making payments for the economic transactions. This was more so for
large value transactions. Actually, it is now used equally for effecting low value transactions
also. For effecting this transfer of money in bank accounts, a
payment instrument was needed to instruct the bank to effect that transfer. This instrument
was the cheque for a very long period. Thus a system consisting of the cheque as the payment
instruments and an infrastructure around the cheques consisting of the drawee bank, the
drawer bank and the cheque clearing houses came on the scene and were known as the
payment systems.
With the developments in the information and communication technology, world over,
different kinds of payment instruments and innovations in the instruments and the payment
systems evolved. It happened in India too and that's the story I will be narrating now. Today
we can boast of a strong retail payments framework in the country comparable to that of any
advanced country, and perhaps even better than some of them in terms of the variety and
efficiency. Various types of payment instruments exist to meet the requirements of different
users in different circumstances – bank accounts, cheques, debit and credit cards, prepaid
payment instruments, etc. There are various systems to meet the remittance requirements of
users depending upon their time criticality and cost sensitivity – National Electronic Funds
Transfer (NEFT), Immediate Payment Service (IMPS), Aadhaar Enabled Payment System
(AEPS) and recently Unified Payments Interface. The need for making bulk and repetitive
payments is met by systems such as Electronic Clearing Service (ECS), National Automated
Clearing House (NACH) and Aadhaar Payment Bridge System (APBS).

AIM FOR LESS - CASH & NOT CASH - LESS

♣ Cash greatly facilitates transactions and there are legitimate high value transactions in
every economy.
♣The fundamental idea behind this exogenous shock is to raise the cost of illegal transactions
and not going cash less.
♣ Going less - cash is a fine balance between maintaining ease of financial transactions and
curbing malpractices.
♣ As cash facilitates crime because it is anonymous and big bills are easy

DEMONIZATION EFFECT ON ELECTRONIC PAYMENT SYSTEM

The government wants India to go cashless, but doing so is not easy. Cashless transactions
have their downsides for consumers. But, for those with access to digital payments, rejecting
cashless options or hesitating to embrace technology is also not the answer, especially in the
wake of the cash crunch brought on by the government's
demonetization move. Questions of access aside, a cashless world has its benefits. Embracing
cashless options and being an informed consumer who is aware of the available systems and
their designs increases the chances of a convenient and consumer-friendly experience.
Traditionally, online transactions were do ne either by
providing debit and credit card details or through net banking interfaces. While there were
issues of security, which kept improving, the payment experience was not very user -
friendly. These options were also largely restricted to computers with access to internet.
But after the smart phone revolution, things have changed entirely. India has seen an
explosion in digital payment options, from e - Wallets to the Unified Payment
Interface to a combination of the two.
There are many cashless payment options available in India. 5 Best cashless payment options
in India.

1)E Wallets –E Wallets have become very famous nowadays. After demonetization, use of e
wallets has been implemented at a very large - scale. These e wallets allow users to make
payments using your mobile number or by scanning a QR code which takes place in a jiffy.
All you need to do is simply download a wallet like paytm.

2)UPI – UPI also known as Unified Payments Interface is another great way to go cashless.
Unified payments interface also called UPI is system of payments. Using unified payments
interface, people can transact using their smart phones. To pay using this system called
unified payments interface, you need 2 important things: Smartphone and a Bank Account.

3)Plastic Money – Plastic Money means debit cards and credit cards that are used at ATM‟s
for cash withdrawal and POS machines while shopping. Having a debit or credit cards make
you burden free from carrying cash.

4)Net Banking – Net Banking is another handy way to get cashless transactions done. All
you need is a bank account with e banking facility enabled on it. You can transfer funds to
others account from the comfort of your home. There is no need of going to your bank to get
transfers done. You can make all payments and transfers yourself. This is a very convenient
way to go cashless in India as well.

5) Aadhaar Card – Aadhaar Card enabled payment system allows a person to pay using his
aadhaar card if it is linked to his bank account. Once you link your aadhaar card to your bank,
you can make payments using your finger prints
Benefits of Cashless economy:

In Financial year 2015, RBI spent Rs. 27 billion on just the activity of currency issuance and

management.

This could be avoided if we become a cashless society.

It will pave the way for universal availability of banking services to all as no physical

infrastructure is needed other than digital.

There will be greater efficiency in welfare programs as money is wired directly into the

accounts of recipients. Thus once money is transferred directly into a beneficiary‘s bank

account, the entire process becomes transparent. Payments can be easily traced and collected,

and corruption will automatically drop, so people will no longer have to pay to collect what is

rightfully theirs.

There will be efficiency gains as transaction costs across the economy should also come

down.

1 in 7 notes is supposed to be fake, which has a huge negative impact on economy, by going

cashless, that can be avoided.

Hygiene – Soiled, tobacco stained notes full of germs are a norm in India. There are many

such incidents in our life where we knowingly or unknowingly give and take germs in the

form of rupee notes. This could be avoided if we move towards a Cashless economy.

∙ Reduced costs of operating ATMs.

Factor affecting / influencing of the usage of the Digital Payments:

People thought that the country was near to being less:- the objective behind the decision
of demonetization is the reduction of corruption from the economy and people are supporting
this move even when the are facing so much of problems in their daily lives. E-payment will
help in the reduction of the corruption because it is a transparent payment system.. itPeople
are trying to get used of online transactions to make economy a cashless economy.

Mismanagement of ATM – Calibration of Rs.500 and Rs. 2000 (Work of Third Party) : -
ATMs are not receiving the proper cash during the cash crunch period, has not been
calibrated properly, only Rs 100 notes are being fed. Earlier guards use to visit once in a day
to check cash and other facilities but now nobody comes for even it
he week.

Mismanagement in Circulation of Money in rural and Urban area as per

requirement:-the initiative of demonetization has caused a chaos across the country. People
want bank notes, but the current supply of currency is not meeting the demands of rural as
well as urban areas as per their requirement. Needs are huge but the circulation of money is
scarce. It has created headache as ATMs and banks regularly run out of cash.

Long Q in front of Bank and ATM :- banks and ATMs are hit by the shortage of currency
but the needs of the people are abundant which results in the long queues in front of banks
and ATMs which isa wasting their precious time standing in queues.. Many of the ATMs are
shut for the long time from the period of demonetization came into effect. This has led to the
increase in the demand of online transactions.

Special Discount offer on online payment/ Money saving:- economic policy in the country
can impact the growth of online transactions. E-commerce companies are boosting their sales
by attracting and provoking the population by providing special discount offers on the usage
of online payment system, making them understand that it will save their time as well as
money also. Due to these offers, people have started using modes of online payment.
Threat of Income Tax Department:- the threatening statement that the cash deposits will be
taken up for the income tax enquiry was a serious and true statement. Income tax department
has made mandatory rules to furnish PAN and reporting to them by bank has made people
alert and alarming.

Non Availability/ short availability of Cash at Bank:- when cash is not available at the
banks and ATMs, people who are well equipped with the plastic money and other modes are
not wasting their time lined up outside the banks and ATMs. They have increased the usage
of online transactions and trying to get habitual of the online trans
actions.

Non availability of Cash in Market as near about 86% of cash has been wiped out from
the market:- India is a country dealing with 90% of transactions in cash and when suddenly
86% of cash has been wiped out from the market, it brings people with shock. Non
availability of cash in the market forcing the people to meet their daily demands through the
online transaction systems or modes.

Transparency:- online tools brings transparency to the dealings. It make things easy for
others to see what actions are being performed. All the information is being disclosed to
everybody making use of it.

Threat of robbery, pick-picketer:- plastic money like debit card and credit card can be
carried with, mobile apps, e-wallets can be used without the fear of theft and cash robbery
from home. Online transactions lessens this fear of people using online tools as compared to
people using cash for their transactions.

Audit trial/ Track all transaction anytime anywhere:- dealing online helps in tracing all
the details of the transactions in a one click. It gives convenience to track all the details of the
day to day dealings anywhere and anytime. It is simple, secure and free and ensure the entire
payment process traceable.

Recording for Future as evidence –For Bank, People, Government and Tax
Department:- the transactions dealt in the electronic modes can be recorded as evidences for
future. It can be preserved by banks, people, income tax departments as well as for the
government. It maintains authenticity and reliability of the records maintained electronically.
Easy and Fast:- dealing online is easy and cost effective for both seller as well as the
purchaser. It is a dealing that saves your time and money simultaneously.

Advertisement / campaign / Motivation to use people- Television Newspaper:-people are

influenced by the advertisements and campaigns which are undertaken to motivate them to
try and go cashless. These adds and campaigns are shown in the television and newspapers
again and again to encourage people towards online transactions.

Threat to the people that Money do not become paper due next move of
Government:-one of the important factor influencing the usage of online transactions is the
fear of another move to be taken by the government. Demonetization was the move that
brings people in the big shock and now people are trying to be transparent as possible as they
can in terms of money because of the fear and threat of the next unexpected move by the
govt.

Time constraint (Leaving Job and standing in a Q) Costing and easy of doing payment
for people:- wasting time in the long queues in front of the banks and ATMs is making
people angry all the time. It is making their life very difficult. For the small amount only they
have to take leave from their jobs and standing in the Q and then too people need to be lucky
for the cash because it don’t take time to ATMs running out of cash.

Easy to carry debit and Credit Card:- it is very easy to carry plastic money in the pockets
without the fea will ensure a good governance system and it will be an important tool in the
reduction ofthe corruption.

It will get rid of terrorist activities:-when everything becomes transparent, it will help in
tracking the terrorist activities as well. One of the Motive of demonetization was the end of
terrorism and digitization will be helpful in getting rid of the terrorist activities.
BOOST IN DIGITAL PAYMENTS

It has been exactly one year since Prime Minister Narendra Modi launched what has been
decreed India’s greatest offensive against black money – the demonetization of INR 500 (old)
and INR 1000 notes. Delivered a bolt from the blue, the PM addressed the nation on Friday
(8 November, 2016) at about 8 pm and said that the aforementioned currency notes would
be withdrawn with immediate effect. The government also announced the introduction of
new INR 500 and INR 2000. A number of regulations and restrictions were placed on the
people of India in reference to cash withdrawal from bank accounts and exchange of
demonetized notes causing widespread anguish. Now, a year hence, with adequate cash
having been infused into the economy, let us take an objective look at the demonetization
drive and the developments that followed.

The demonetization caused much discomfort and misery to the common man – that much is
undeniable. Through most of November (after the demonetization was announced) a
maximum cash withdrawal limit of INR 4000 was announced. Exchange of demonetized
currency before 31 December resulted in endless queues outside banks and post offices. All
2,05,509 ATMs in the country were initially shut down and even after recalibration a
maximum of INR 2000 could be withdrawn on a single day. Numerous tales of people falling
ill and even dying in the queues were reported but the worst hit were daily laborer and people
from the lower rungs of the economy who depend largely on cash payments. Handloom,
consumer goods, jewellery, auto, and paints were some of the severely affected sectors that
suffered from lack of liquidity. Small companies which traditionally record an earning
between INR 250 million and INR 500 million on an annual basis were severely impacted.
Year-on-year sales in these companies went from -19.3 percent in FY 2015-16 to -53.6
percent in FY 2016-17. The common man silently suffered through the demonetization drive
in the hope that black money would be flushed out through this exercise and this will bring
long term benefits to the country.

Government Promotes Digital Payments

The greatest positive outcome of the demonetization exercise undertaken by the GoI was the
boost it imparted to digital payments, taking the nation closer towards becoming a cashless
economy. In December 2016, PM Modi launched the BHIM (Bharat Interface for Money)
app – an indigenous mobile payment application based on UPI (Universal Payments
Interface). The application allows smartphone users to link their bank accounts and make
payments through UPI. Over 30 leading public sector banks and private banks can be
connected with BHIM. The government also incentivized the use of BHIM by announcing
the Digi-Dhan Vyapar Yojana and the Lucky Grahak Yojana. By February this year, BHIM
was downloaded 17 million times, setting a record.

Spike in Cashless Transactions

UPI based BHIM certainly made its mark with the masses, more so because it allowed
payments to non UPI based recipients and also because it did not require an active internet
connection for the payments to be made. In urban regions, however, the use of mobile wallets
such as PayTM, Google Tez, Airtel Money, Citrus Pay and Freecharge began to rule the
roost. From the local vegetable vendor to cabs on hire, everyone seemed more than willing to
accept digital payments. This is a temporary phenomenon, said critics of the government but
statistics reveal a different story. About a year after the announcement of demonetization, the
people remained keen on conducting digital transactions. Some 68 million UPI transactions
were conducted across India in October 2017 – a massive increase from the 0.3 million in
November 2016. 82 million MPS transactions were conducted in October 2017, up from 36
million in November last year. Integration is now king and a number of private digital wallets
such as PayTM have linked with BHIM and its UPI based interface. Not wanting to be left
behind, public sector banks in India too have been actively promoting their mobile banking
apps and e-wallets over the past year. SBI Pay by SBI, Axis Pay by Axis Bank, eMpower by
Canara Bank and PayZapp by HDFC are among the most used mobile wallets (by Indian
banks). The launch of India Post Payments Bank (IPPB) is another major development aimed
at capitalizing the vast outreach of India Post and promoting digital payments. There remains
much debate about the quantity of black money flushed out by the demonetization drive.
There are numerous lessons in policy implementation that our government may wish to take
but one thing remains clear. The exercise has ushered in a new era of digital payments and
cashless transactions.
20 Best Digital Wallets in India

The demonetization of Rs 500 and Rs 1000 currency notes has been working largely in the
favor of digital wallet startups. India has seen a phenomenal increase in the number of digital
wallets and is slowly moving towards being a cashless country. And with the transaction
limit on digital wallets being increased to Rs 20,000, it just keeps getting better.

1) Airtel Money:

With the Airtel Money app, users can easily recharge prepaid accounts or pay postpaid bills.
You can also shop online if your digital wallet has cash loaded in it. It’s also extremely safe
as every transaction or payment you make requires a secret 4-digit mPin.

2) Citi MasterPass:

Citi MasterPass, a free digital wallet, helps make checking out while online shopping a
speedier process. Once you’ve stored all your payment and shipping details in your Citi
Wallet, simply click on the MasterPass button and it will take care of the rest.

3) Citrus Pay:

Citrus Pay, one of the top e-wallets in India, it offers a Citrus wallet for customers as well as
payment solutions to businesses. With a strong base of 800 million customers, it has
definitely earned its spot as one of the best mobile wallets in India.

4) Ezetap:

Ezetap, a Bangalore based digital payment solution founded in 2011, offers business owners
solutions to accept card payments via electronic devices. It also send customers e-receipts
through an SMS or email.

5) Freecharge:

Freecharge, one of the most famous names right now when it comes to digital payment in
India, has been known to target the youth in all their promotions. With equivalent amount of
coupons given for every recharge you make, it’s a great option to save while paying your bills
online.
6) HDFC PayZapp:

HDFC PayZapp, making digital payment in India simplified with one click payments, is one
of the top online wallets in India. Users can easily compare flight and hotel tickets and even
buy music or pay bills with the app. Simple connect your debit/credit card once and forget to
worry about making payments.

7) ICICI Pockets:

While you might find a Pocket card redundant, considering you’re opting for an e-wallet app
to avoid using a card, they do have a pretty neat wallet app. It’s VISA powered and can be
used on any Indian website, or to transfer money to email ids, WhatsApp contacts, and also
just tap and pay your friends easily.

8) JioMoney:

JioMoney, launched recently in 2016 by Jio, is a digital payment app. With JioMoney, one
can receive great discounts and offers. Users can also bookmark their frequently visited
retailers so shopping can be made quicker than usual.

9) Juspay:

JusPay Safe is a payment browser with over 650+ transactions in a day. They offer a browser
with which users can make payments quickly via cards with 2 clicks.

10) LIME:

LIME, launched by AXIS in 2015, was the first mobile app in India to integrate wallets,
shopping, payments, and banking. Apart from the usual features like making payments, they
also let you analyze what you spend. With a cool feature that rounds up all your change and
invest in a deposit and a shared wallet tool, they’ve definitely earned their spot in the top list
of mobile wallets in India.

11) Mobikwik:Mobikwik is a Gurgaon based e-wallet payment system in India that helps its
users store their money. Founded in 2009 by Bipin Singh and UpasanaTaku, this digital
wallet enables users to recharge, pay bills, and make third-party purchases with one tap.
12) MomoeXpress:

MomoeXpress, a Bangalore based digital wallet in India, claims to have the fastest checkout
system. Though they’re only available in Bangalore, they have a wide range of solutions they
offer to residents on the city. From paying for your rickshaw ride to salons & spas, there are
over 3000 outlets available at your disposal.

13) MoneyonMobile:

MoneyOnMobile, authorized by the Reserve Bank of India, enables users to buy goods,
products, and services from registered merchants. It’s a multilingual app that reaches remote
areas of the country to millions of users making online payments available to a wide
population.

14) Mswipe:

Mswipe, the first mobile point-of-sales solution in India was founded in 2012. They don’t
exactly offer an app, but they do provide a machine that can be attached to your mobile
device to accept card payments. This may not be a digital wallet app but it does support going
cashless.

15) Ola Money:

Ola Money, launched in 2015, is a digital wallet in India offered by Ola. While it’s majorly
being used to make payments for Ola cab rides, making cashless traveling a dream come true,
it can also be used to buy groceries or flight tickets and much more.

16) Oxigen:

Oxigen, a FinTech company founded in July 2004, is one of the major providers of digital
payment in India. Along with making online purchases and paying bills, you can also send
gift cards to your dear ones.

17) PayMate:PayMate, founded in 2006 by Ajay Adiseshann, launched PayPOS in 2012, an

app for small business owners to receive payments conveniently via debit cards and credit
cards and also process electronic transactions.
18) Paytm:

Paytm, launched in 2010, is currently the largest mobile wallet app in India. With payments
via Paytm being accepted almost everywhere, it’s hard not to simply switch to it completely.
From paying mobile bills to buying movie tickets, there’s almost nothing you can’t do with
Paytm.

19) PayUmoney:

PayUmoney, a part of PayU India, is a free payment gateway solution for merchants to
collect payments from customers via debit/credit cards or net banking, and more. They also
offer SMS and email invoicing for merchants that do not have a website.

20) State Bank Buddy:

State Bank Buddy, a product of State Bank of India, is an online wallet in India that’s
available in 13 languages. Users (non SBI account holders too) can send money via
Facebook, or to other bank accounts, book hotels or movie tickets and much more!

Demonetization & Paytm

India’s biggest fintech has doubled its user base in a year and is on track to have 500 million
customers by 2020. It is backed by Ant Financial and Softbank and spurred by state policy on
financial inclusion

It is a year since Indian prime minister Narendra Modi turned his country’s transactional
finances upside down with his demonetization programme. The dust has now settled. People
will argue for years about the pros and cons of what he did, but there is near universal
agreement on the company that did best out of the whole thing. Paytm was already big news
before Modi’s demonetization shock last November 8, when he withdrew all the Rp500 and
Rp1,000 banknotes from circulation to curb corruption and the black economy, he said,
apparently without warning anyone in the banking sector that he was about to do so.

The rags-to-riches story of Paytm’s founder, Vijay Shekhar Sharma, who not so long ago
would walk 20 kilometres across Delhi because if he paid for an auto-rickshaw he would not
have enough money for dinner, and who was flat broke as recently as 2003, was by then
already well-rehearsed in Indian media. The journey of his company from a prepaid mobile
webcharge website in 2010 to an Alibaba and Ant Financial-funded juggernaut that is the
largest mobile payment service platform in India was well underway. But demonetization
gave the company an almighty lift. Modi’s move completely pole axed India’s cash
transaction economy and forced people, and in particular the small merchants who are legion
in the country, to look at alternatives. The Paytm wallet was the simplest answer and people
flocked to it. It went from 125 million wallet customers before demonetization to 185 million
three months later, and it has continued to grow, hitting 280 million users by November 2017.
Sharma and his staff saw an opportunity and put everything they had into it; Sharma has said
that he and his staff did 600 days’ worth of work in 60. They ran full-page ads the following
day praising Modi for “taking the boldest decision in the financial history of independent
India,” a stunt that was not without its critics. Opposition politician Rahul Gandhi suggested
Paytm stood for “Pay to Modi” (it is actually Payment through mobile).
It is important for any company like ours that has such big ambitions to have partners and
shareholders who share our conviction on the journey - MadhurDeora, Paytm
Sharma’s catch-phrase is ‘Go big or go home’ – it is on his office wall, on his coffee mugs,
all over his interviews – and he certainly ran big on demonetization. Looking back on it now
in New Delhi, Paytm’s CFO MadhurDeora, who joined from Citi a month before
demonetization, is keen to point out that the company was already very much on its way
before Modi’s unexpected bounty came along. “We were doing payment solutions for offline
merchants since October 2015,” he explains, making it the only company outside the card
networks that was doing so in India at the time. “So when demonetization happened, we had
the product and the sales infrastructure already. It took a lot of effort to scale up, but the
foundations were already there. “Clearly, it made the adoption for a lot of users a lot faster,”
he says. “It went from being one of the options to be being a necessity of the hour, and our
brand become a lot bigger.” Signing up merchants at a cracking pace (in October COO Kiran
Vasireddy said Paytm had gained five million merchants with QR code acceptance in a year
and that the company processed $1.6 billion of transactions during the recent Diwali month,
up three-and-a-half times year on year), the company learned a great deal about merchant and
consumer behaviour and the power of the offline merchant network.
Banking

One thing that was on its way with or without demonetization was Paytm’s engagement
head-on with the world of banking. Back in 2014, the Reserve Bank of India released draft
guidelines for a new kind of institution called a payments bank. These would be able to
accept restricted deposits (no more than one lakh rupees, or Rp100,000, per customer,
equivalent to about $1,530) and could not issue loans or credit cards, but could run current
and savings accounts, issue ATM and debit cards and operate net and mobile banking.
Forty-one institutions applied, Paytm among them, and in August 2015 Paytm was one of 11
entities to be given in-principle licences. Progress among the 11 has been mixed. Three ended
up giving their licences back, concluding it was not worth going ahead. The telco Airtel was
first out of the blocks, launching a new bank in partnership with Kotak Mahindra in
November 2016. India’s national post office has launched one and the other telcos are
expected to do so. Paytm launched its payments bank in May this year with big ambitions.
The mobile wallet business had been a curtain raiser, Sharma said at the time: the payments
bank would be the main show. The first step was to transfer in all of those wallet accounts,
giving the bank an almost 200 million-strong head start at launch; the target, stated brazenly
and frequently, is to hit 500 million current and saving accounts by 2020. Madhur-Deora-300
Paytm’s CFO MadhurDeoraRenuSatti, who formerly ran Paytm’s movie ticketing business,
CEO of the new bank. More broadly, Deora, as well as being CFO and senior vice-president
of Paytm, also has responsibility for driving the company’s push into financial services. To
him the payments bank licence is “a huge responsibility. From day one, we have wanted to
get this right.”

It is also an opportunity. “At a fundamental level, what a payment bank offers us is the
opportunity to be the primary deposit relationship for our customers,” says Deora. “Take a
step back. All these things we are building are what you can do with your money: spend it,
save it, borrow it. In having the deposit relationship, then we can have all those things you
can do with your money in one place. That’s a huge differentiator for us. “Now you have the
largest merchant network in the country, by far the largest spending network whether online
or offline, combined with the ability to save, borrow and deposit the salary, all in one place.”
To Deora, the restrictions of a payments bank licence relative to the bricks-and-mortar banks
“are fine. The customer chooses where they want to keep their money.”
 5. OBJECTIVE

1.To know the importance of digital payment after Demonetization as perceived by the
people of India.

2.To assess the people's trust and confidence in the digital payment system after
Demonetization.

3.To assess the use pattern and nature of transactions done by the people after
Demonetization.

4.To identify the factors of digital payment after Demonetization.

 6. Research Methodology

The research methodology consists of two stages: The initial phase was to undertake detailed
secondary data search about the Impact of Chinese products on the Indian economy.
Questionnaire method will be used to understand the consumer perception toward the digital
payments in indore. The data would be collected with the help of surveys And emails. We
have received 50 responses. Survey Administration: The questionnaire Comprising 17
questions which measured responses for different perceptions of respondents for the digital
payments users. The methods used for the survey was questionnaire administration with
respondents filling out the responses themselves and online survey through mail posting.
Sampling: The survey was conducted on 50 respondents; sample was based on affordability
criteria especially on time constraints. Email invitations were sent to invite respondents on
the Internet, and employee, students were contacted for responses

Research Design:

The study is exploratory in nature. It provides a description of contemporary satisfaction

parameters in consumer satisfaction towards digital payments. Exploratory research provides
insight into and comprehension of an issue or situation. Exploratory research helps to
determine the best research design, data collection methods and selection of subjects.

Sample size

Sample size is the size of sample drawn from the population which is the
true representative of the research. The number of respondents included in the study was 50
customers on consumer perception towards the digital payments evaluating and analyzing the
data and because of time constraint

Tools for data collection:

Primary Data:

There are various ways to undertake the gathering of primary data, including conducting
surveys through the questionnaires on consumer perception towards digital payments users
and collecting the data from the respondents . Sample size - 50, sampling
technique-convenience sampling, area- not restricted .
Secondary Data:

This involves information that already exists somewhere, such as in studies already
undertaken in this area as well as published books, articles in journals, articles on the internet
and other sources.

Tools for Data collection:

Primary Data have been analyzed through percentage analysis and graphical representation
(Pie chart) methods. Secondary data have been analyzed through interpretations and applied
logical methods.
 7. DATA ANALYSIS AND INTERPRETATION

Q.1 Age

Q.2 occupation
Q.3 Yearly income

Q.4 Gender
Q.5 Education Qualification

Q.6 How Often Do You Use Digital Payment Systems?

Q.7 Which Digital Payment Methods Do You Use?

Q.8 Are You Concerned About The Security Of Digital Payment Systems?
Q.9 What Is The Primary Reason For Using Digital Payment Systems?

Q.10 Do You Find Digital Payment Systems More Convenient Than Cash Transactions?
Q.11 Which Digital Payment App Use?

Q.12 Which Factors Influence Your Decision To Make Cashless Transactions?

Q.13 Have You Ever Faced Any Issues While Making a Digital Payment?

Q.14 Do You Think Digital Payment Systems Will Completely Replace Cash In The
Future?
Q15. Which Platforms Do You Primarily Use For Making Digital Payments?

Q.16 Do you find digital payment systems user-friendly?

Q.17 Are you aware of the fees associated with digital payment transactions?
 8. CONCLUSION

The Government has implemented various reforms for sustainable and transparent
economic development. Demonetization and Digital payments are most important among
the reforms. The impact of demonetization was felt more in the social sector and the
worst affected was also the poor and the common people. The cashless transaction is not
only requirements but also an emerging need of today for transparent economic
development.

In Hyderabad City cashless can be achieved easily because most of them already adopting
cashless payment, there is only need of Government should ensure first availability and
quality of telecom network in all parts of country. Financial institutes or intermedia ries
like banks and related service providers will have to constantly invest in technology in
order to improve security and ease of transaction. People as a customer will only shift
when it‘s easier, certain and safe to make cashless transactions. Government and banks
should adopt strategy of incentivize cashless transactions and discourage cash payments
by the way of proper implementation and supervision of restrictions for using cash based
transaction then the cashless India will come to true in future.

The demonetization undertaken by the Indian government in a large concern. Due to that the
public turns to cashless transaction that is Internet banking. It reaches High success rates
through co-ordination. It’s like two faces of coin become of one side it will be benefit to
Nation and other side its going towards digital economy may bring the transparency in the
system. Internet banking brings easy and convenient service people develop the ability to use
E-banking but the same time at the earlier time the people affected in this changes people are
facing problems because the limit of withdrawal has not been kept at the high level it
difficult to adapt illiterate people but even all these difficulties overcome and make the
banking transactions effectively due to this implementation increase Internet users and also
initiative taken by government Agencies to make the India developed in future. It is pretty
clear that demonetization has impacted the e-commerce industry. Due to demonetization
consumers are buying more products through online mode instead of retail shops due to
cash crunch. The consumers have adopted new method of making payment where prior to
demonetization, consumers were making payment by choosing the cash on delivery
option but now majority of them are shifted to debit card and Paytm wallet to make
payments. Hence, it can be concluded that demonetization has opened up more
opportunities for the ecommerce industry and it will prove huge boon for digital payment
market
It is observed in the study that in terms of various factors promoting towards online banking
majority of the customers gave highest ranking to the option “Less time for transaction”.
They prefer online banking because of faster services, and next priority was convenience and
ease of use. Least preferred is technology savvy. The people living in Urban area feel Online
banking is essential, and metro city people desire to adapt online banking as it is vital. And
the suburban area customers are not so clear about the services due to lack of awareness,
where as customers living in rural areas feel need for online banking is negligible, they are
not much in to digital transactions.

The findings while analyzing the satisfaction levels of the consumers towards various digital
channel services, it is observed using factor analysis that 35 variables are reduced to 8 factors
and these 8 factors extracted together accounted for 79.735 % of total variance. The result of
PCA is shown as online banking services were loaded as a very significant factor in terms of
highest satisfaction level, followed by Telephone Banking Services factor and Mobile
banking services fallowed by ATM Services and Convenience. Various challenges faced by
consumers in the process of digitalization are that there is No privacy of customer's
information, Security concerns, Not aware of all services E- banking. If the banks improve on
these key issues probably the dream of transformation to digital India may materialize in
forth coming period.
 9. SUGGESTION

The cashless transaction activity had a great step to enhance the transparent economic
development, empower the financial inclusion and integrates the parallel economy with main
stream. In present scenario the country needs to move away from traditional cash based
transaction towards a cashless or digital payment system. Therefore the following suggestions
will help to improve cashless transaction among the consumers.The Government of
Telangana along with banks should be organize intensive awareness program about the
benefits and need of cashless transaction or digital payments to students of colleges, higher
educational intuitions. The banks should organize camp at village to educate the people about
digital payment system.The Government of India and Telecom ministry should make
necessary step to enhance broadband speed and wide coverage of internet to all areas. The
government should continue and give some incentive benefits to those who are using regular
digital payments because it will motivate not only the regular user but also new user
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