Effectiveness of Online Payment System during COVID-19
Niyati Chaudhary1*, Sakshi Anand2
1Assistant Professor, Delhi Institute of Advanced Studies, Delhi
2Assistant Professor, Delhi Institute of Advanced Studies, Delhi
*Corresponding Author E-mail:
ABSTRACT:
Digital payment methods are popular now days with the rapid development of computer technology for the banking transactions. This can be used to attract more customers to perform banking transactions digitally. However, the main problem of digital payment methods faced by the providers is that a large number of the banks’ customers are not willing to use the digital payment methods offered. We found that adoption of digital payment methods has increased immediately after demonetization and rapid growth has seen in the COVID-19 period. The purpose of this study is identifying the common methods of digital payments, as it is an efficient and viable tool to create customer value. The main objective of this study is to understand the usage of digital payments method and its impact on cash management. In this study, the data has been collected through questionnaire. Data has been analyzed by applying descriptive and diagrammatic analysis. In this study, we found that there are so many factors which affect the participants for the adoption and usage of digital payments method such as nature and scope of transactions, personal factors such as comfort and familiarity with other digital technologies and transactions. The main finding of the study is rapid growth of the digital payment’s methods in lockdown period in India. The usage of the digital payment method is found high in the age group of 20-40 years. It is reported that above 90% of the respondents are aware about the digital payment’s methods. Ease of accessing, cash back, time saving, convenience, better quality decision making, mobile wallet are the main benefits received by respondents. Respondents agreed that these methods are faster and better than traditional payments method.
KEYWORDS: Digital finance, Online payment, Cash Management, Digital payments method.
INTRODUCTION:
Digital payment methods are popular now days with the rapid development of computer technology for the banking transactions. This can be used to attract more customers to perform banking transactions digitally. However, the main problem of digital payment methods faced by the providers is that many the banks’ customers are not willing to use the digital payment methods offered. We found that adoption of digital payment methods has increased immediately after demonetization and rapid growth has seen in the COVID-19 period.
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
Benefits of Digital payments:
· Saves time: Digital wallets hold the amount in the electronic form so as to ease the payment process where users can make online payments without entering any card details.
· Ease of use: As digital wallet is like one click pay without filling details about card visa card number and passwords every time, It allows user to link digital wallet to accounts and pay right away so that the consumers face no issues to enter the details every time a transaction happen.
· Security: There is a good amount of security when payments are made through e-wallets since the wallet does not pass the payment card details to the website. These virtual wallets allow users to lock their wallet.
· Convenient and information stored under one roof: As digital wallets helps to eliminate need to carry the physical wallet, they are highly convenient. Also, a better management is possible as there is synchronization of data from multiple platforms like bank accounts, credit and debit cards, mobile accounts and billing portals.
REVIEW OF LITERATURE:
Book revealed about the suggestion to take the step by the Government. Both the Government and RBI keep on moving India towards a less cash economy by encouraging people to shift from cash to electronic payments for all transactions (7). The shift from cash to electronic payments is a continuous process and is happening all the time, but its implementation will depend on the public’s acceptance, which is in part a question of making it convenient for people to use electronic payments. In ultimate analysis though, facilitating the shift to a less cash economy is a question of meaningful financial inclusion. Service quality positively influences customer satisfaction and is, in fact, a prerequisite for customer satisfaction (3). However, the exact relationship between the service quality dimensions of satisfaction and loyalty remains unclear. There is growing evidence of variation in the outcomes of studies on the dimensions of e-service quality that have surfaced in an attempt to address the key attributes of service quality of online services, directly or indirectly (2 and5). Web Quality instrument (Web Qual) with 24 items, specifically for online service quality measurement (1). Seven dimensions, namely reliability, competence, responsiveness, access, credibility, communication and understanding of the individual were established. The researcher made an attempt to study about the demonetization impact and financial technology company. Further also analyzed about payment service sector during the demonetization period (8). Fast Moving Consumer Goods have extended their credit cycle to address this liquidity situation some of the consumer’s companies have extended some credit to the distributors through RTGS. Digital payment is the largest bet in the mobile internet space from the technology point of view.
After demonetization changes in buying behaviour are clearly explained (9). After demonetization the main impact is reduce the paper money and increase the digital cash. Most of the customers used digital cash after the demonetization, used through the mobile applications, Internet Banking, etc., for paying their bills. After demonetization retailers will adopt the digital payment methods (10). The researcher analysed to find out the payment methods between the pre and post period of demonetization. Most of the retailers used their payments through using various applications. Sathish et al. (2020) this study is revealed that the traditional system of cash transaction cannot completely be replaced by card or e-payment system. People can adopt and use their mobile wallets for the payment transaction, fund transfer, purchasing groceries and paying bills etc. The study has discussed the trust is the main factor affecting users’ satisfaction directly and it impacts on many user’s intention to adopt mobile wallets.
RESEARCH METHODOLOGY:
To accomplish the objective of the study, the data obtained on usage of digital payment system in India. The study conducted in Delhi-NCR region. 200 sample size was selected using the convenience sampling method. The researcher has used the structured questionnaires for the purpose of data collection. Descriptive analysis technique (simple percentage analysis) was used to analyze the responses of the respondents.
Data Analysis:
Indian economy constitutes 92% of informal workers which who contribute around 50% of the GDP; 80-90% of these workers are paid in cash which are often undeclared assets. These figures clearly represent the importance of cash in the Indian economy. With these Mediums of the digital payments such as smart phones and internet connectivity are still unaffordable to a sizeable population thus denying them access to digital forms of transaction. Awareness about using the digital solutions like smart phone-based transactions; feature phone-based transactions etc are still a persistent issue. A survey conducted by Bill and Melinda Gates Foundation shows that till January 2017 only 8 percent of the users are aware of the mobile money. The other key issue is lack of bandwidth and reach of technology to various locations. Though, with the introduction of the digital India movement, government of India has expanded the various schemes and programs like AEPS, DIGIDHAN Abhiyan, PayGyan to enable the citizens to adopt digital platform. Though ICT (information and communication) services are every corner but in many of the location’s services are not available for the customers. Gaining the trust of consumers is one of the key challenges facing the mobile wallets, digital transaction service providers like banks, fin-tech companies etc.
After the above discussion, the data is collected in the form of different questions about the usage, security, problems faced and cash management. To know this, we conducted a survey to find out the usage of digital payments, challenges, solutions and its impact on cash usage.
DISCUSSION OF RESULT:
We took a sample of 200 users of digital payments of maximum of age group 20years-45years. The below table denotes the questions and the percentage of respondents
Maximum respondents, 67.8% were male only 32.2% were female, engaged with digital banking. Previous studies show that Gender does not make difference in adoption of technology in banking sector.
|
Gender |
N |
% age |
|
Male |
89 |
45% |
|
Female |
109 |
54.50% |
|
Education Level |
N |
%age |
|
Up to 12th |
35 |
17.5 |
|
Graduate |
94 |
47 |
|
Post Graduation |
36 |
18 |
|
Doctorate |
30 |
15 |
|
Post Doctorate |
5 |
2.5 |
|
200 |
100% |
The above table shows that 17.5 % respondents were with secondary education, 47% were Graduate, 18% of the respondents were with Postgraduate, 15% were Doctorate and 2.5% Post Doctorate. The earlier studies proved that education plays the role in adoption of technology. The respondents of higher education of the study area show that the technology adoption will be quite encouraging.
The Chart shows that most of the respondents were students (i.e. 65%) and in service (18%). Other include 9% having their own business, 5% Housewife and 3% others.
The below table depicts the questions and the percentage of respondents.
|
1. Are you aware with the function of Digital Payment? Yes 95% No 5% |
|
2. Do you use mobile payment or digital payment? · Yes 84.6% · No 15.4% |
|
3. Why do you adopt digital payment system? · Convenience 59.3% · Shortage of Currency notes 8.1% · Discounts and cash backs 23.7% · Easy tracking of expenditure 8.9% |
|
4. How often you use digital payments?
|
|
5. Do you agree with this point that digital payment is time saving?
|
|
6. Is mobile wallet capable of providing benefits to individual for purchasing products?
|
|
7. Do you agree that mobile wallet improves the quality of your decision making for purchasing products?
|
|
8. is there any service charge or taxes are deducted for using digital payment mode?
|
|
9. How much you satisfied with the loyalty of online transaction?
|
|
10. How much you agree with the point that interacting with mobile wallet is helpful?
|
|
11. Do you think that using digital methods of payment makes your life easier?
|
|
12. Do you agree that a digital customer has to be aware with the security issues while using digital payment mode?
|
|
13. Do you agree that digital payment system can be easily understood and readily adopted?
|
|
14. Digital payment offers a great choice for consumer in the way they send and received payment.
|
|
15. Do you agree that digital payment is convenience? (24 hours service, anywhere connectivity)
|
|
16. Do you agree that digital Payment is faster as compared to traditional banking?
|
|
17. Are you able to perform all the transactions by setting single app?
|
|
18. Do you agree that no one can view your personal as well as banking details?
|
|
19. Do you agree that it offers cash back and scratch card to you?
|
|
20. Transfer money to anyone in need anytime makes you satisfy.
|
|
21. What is your biggest concern around digital payments?
|
|
22. Who Induces digital payment methods to you?
|
|
23. Do these digital payment methods help you in managing cash? · Yes 69% · No 31% |
|
24. How digital payment method helps you in cash management?
|
After observing the responses received, we hereby conclude that, most of the people are using the digital payment system because of the convenience they are attaining. The need to go to banks for every purpose decreased. Most of the respondents use digital payments weekly, debit and credit cards are the most preferred methods of digital payments followed by e-wallets and net-banking, the biggest concern about digital payments is security 60% of the respondents believe this as the major concern.
FINDINGS:
In this study, we found that there are so many factors which affect the participants for the adoption and usage of digital payments method such as nature and scope of transactions, personal factors such as comfort and familiarity with other digital technologies and transactions. The main finding of the study is rapid growth of the digital payment’s methods in lockdown period in India. The usage of the digital payment method is found high in the age group of 20-40 years. It is reported that above 90% of the respondents are aware about the digital payment’s methods. Ease of accessing, cash back, time saving, convenience, better quality decision making, mobile wallet are the main benefits received by respondents. Respondents agreed that these methods are faster and better than traditional payments method.
CONCLUSION:
India is among the fast emerging as one of the largest and strong economies. For sustained development and growth with robust economic development, certain integral factors like improved transparency, corporate governance etc, and play a major role. All developments could be feasible only when the population embraces the digital payments and digital transactions. Hence, if the challenges that are discussed are addressed and improved solutions in terms of digital transactions with more secured features, ease of transactions and reduced cost of managing the digital payments could lead to more potential developments and supporting in improved conditions of digital payments processing.
REFERENCES:
2. Han, S. and Baek, S. (2004). Antecedents and consequences of service quality in online banking: An application of the SERVQUAL instrument. Advances in Consumer Research. 31, 208-214
3. Newman, K. (2001). Interrogating SERVQUAL: a critical assessment of service quality measurement in a High Street retail. International Journal of Bank Marketing. 3(19), 126-139.
4. Pahwa, N., 2016. Cash vs Digital Money: why going cashless is going to be tough in India. [Online] Available at: http://www.medianama.com/2016/11/223-cashless-india/ [Accessed 23 Feb 2017]. IMAP, 2017. Payments Industry in India, s.l.: IMAP
5. Parasuraman, A., Zeithaml, V. and Malhotra, A. (2005). E-S-QUAL: A multiple-item scale for assessing electronic service quality. Journal of Service Research. 7(3), 213-233.
6. Parasuraman, A., Zeithaml, V. and Berry, L. (1985). A conceptual model of service quality and its implications for future research. Journal of Marketing. 49, 41- 50.
7. Subbarao, D. (2016) “Who Moved My Interest Rate?” Penguin Random House India, ISBN: 9780670088928
8. Sornaganesh and Chelladurai. Demonetization of Indian currency and its impact on business environment. International Journal of Informative and Futuristic Research. 2016; 4(3): 5654-5662.
9. Sudha and Sornaganesh. A study on Perception towards Demonetization in Thoothukudi. Global Journal for Research Analysis. 2019: 8(4).
10. Sudha and Sathish. Demonetization: The way to Increase the Digital Cash. International Journal of Creative Research Thoughts. 2020; 8(5).
11. Sathish, M., Sermakani, R. and Sudha, G. A study on customers attitude toward the E-Wallet Payment System. International Journal of Innovative Research in Technology. 2020; 6(12).
12. M-Wallet Report By ASSOCHAM,
13. http://www.assocham.org/upload/docs/MWallet_Report_press.pdf
14. http://cashlessindia.gov.in/
15. https://economictimes.indiatimes.com
16. http://digitalindiapayments.com/
Received on 11.09.2021 Modified on 16.11.2021
Accepted on 01.01.2022 ©AandV Publications All right reserved
Asian Journal of Management. 2022;13(1):56-62
DOI: 10.52711/2321-5763.2022.00011