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A Literature Study of Consumer Perception Towards Digital Payment Mode in India
A Literature Study of Consumer Perception Towards Digital Payment Mode in India
ABSTRACT
Digital transactions are taking over most of the transactions in the world and India is no exception. Various
studies have proved that efficient payment system will speed up the liquidity flow of an economy. In the era of
digitisation, transactions using technology is the best way of being agile and giving better service to consumers.
The study is about understanding consumers‘ perceptions with respect to online and digital payments and safety
of these transactions in this world of connected technologies. It is important for marketers to know the perception
of consumers towards cashless methods of transactions and this study helps in this. The study is qualitative in
nature and uses literature reviews to analyse the concept of digital transactions. The reviews delve insights into
the various challenges and advantages of using digital transactions. The findings reveal that digital transactions
are accepted in India and usage is increasing year by year. The study finds the advantages and challenges which
is faced by consumers while adopting digital payment.
Practical Implications: The study will help future researchers for formulating conceptual models and deriving
more stimulating insights into the topic.
INTRODUCTION
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digitization. Better systems, security, and population, poor internet connectivity, lack
collaboration from all concerned can of exposure on digital payments,
hasten the process of digitization {Shallu et unwillingness to adopt digital medium for
al (2019)} economic transactions etc create a major
Demonetarization has triggered the hinderance for the country to go for a
widespread use of digital transactions; cashless economy.
however, studies show that UPI has gained This paper is an attempt to study the
more traction in the long run by perception about online payments and gain
popularizing the digital payment methods. insights into the various challenges in this.
It has been observed that UPI overtook all (using literature study)
the digital financial transaction instruments
by increasing the volume of transaction by IMPORTANCE OF THE STUDY
450% at the end of the financial year 2018- This study is an attempt to identify the
2019. According to the industry experts the thinking of consumers with respect to
affordability of smartphones and internet online payments and about the safety of
data too have accelerated the widespread these payments. Though, a lot of research
acceptability among the customers from has been done on consumer perception
different strata of the society. towards credit card payments, very less has
Information and Communication been done on other modes of payment and
Technology sector is also playing a the challenges faced by the consumers for
significant role in the development of the digital payments. This study aims to
society and digitization of the economy. understand the frequency of Digital
The economy is also called as a digital payments and factors affecting, or
economy or internet economy. challenges faced by the consumers while
Digitalization is found everywhere from using digital payment modes these may
manufacturing, purchase to payments. affect consumer perception.
With the advancement of the internet,
online banking facilities and other mobile OBJECTIVES
applications have made consumers more a. To understand concept and the different
convenient to do their transactions modes of digital payment
anywhere and at any time. Adoption of b. To understanding consumers‘
cashless/ digital transaction comes with its perceptions with respect to online
own benefits. A customer who use digital and digital payments and safety of these
payment can pay directly from his bank transactions
account, track and maintain his
transactions, receive cash back offers and SCOPE OF THE STUDY
rewards and collect any kind of payments The literature reviews taken for the study
remotely. The same holds good for a are primarily from India. The studies varied
merchant as well. There are various from usage studies to behavioural studies.
methods of online payments that are being These were analysed for the main results.
used by the customers like credit or debit This is mainly restricted to studies of
cards, Unified payment interface, mobile digitisation in payment.
wallets etc to name a few. But acceptance
of these digital payments methods depends RESEARCH METHODOLOGY
on consumer perception. Although with the
developments in technology in the form of ―The study is exploratory in nature. It uses
big data, internet of things, etc. are getting literature reviews and secondary
its momentum, cashless economy has its information for the findings. The direction
drawback too. The identity theft and other of the study is towards giving secondary
cybercrimes, technologically unprepared data information for future researchers to
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work. As there is no primary data the study and is not exhaustive in terms of the
reliability depends on the secondary data literature. It does not use any quantitative
collected.‖ data. The paper identifies main thrust areas
from literature and projects them.
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D.G in 2018 found that improvement in analyses internet banking acceptance and
Information and communication found that acceptance of technology and
technology and reduction in cost of risk management are the reasons for
providing internet will make digital customer acceptance. Priyanka Philip
payment more widespread. This was also (2020) found that internet banking
mentioned with the added observations of improves the operating efficiency of the
ease of use and convenience by (Kotecha bank. Lin W-R et al (2020) talked about the
P.S. in 2018), (Neha Mehta, Sweety Shah importance of online banking, need to
,2020), (Vinitha. K, Vasantha maintain its efficiency and reducing costs
Shanmugam,2017) (Alaknanda Lonar et al, so that customers will be happy, and banks
2018) and (Anoushka Sharma et. al. can retain them.
(2015). Teoh et al (2013) in his study of Importance of demographics and factors
Malaysian respondents who used e- influencing consumer adoption was given
payment also found that the most by Satadruti Chakraborty , Dipa Mitra
favourable factors affecting e-payments (2018) (M. Kavitha and K Sampath
were ease of use and self-efficacy. But they Kumar,2018). The importance of
found that there was a negative relationship demographic factors like education level
between trust and security. Ardiansah et al was also stressed upon by the study by
(2019) found a positive relationship Shamsher Singh and Ravish Rana in the
between purchase intention and ease of use. year 2017 who also talked about
D.N.V. Krishna Reddy, Dr.M. Sudhir importance of internet penetration and
Reddy (2015) found that digital medium usage of smartphone. The importance of
provides ease of use and safety and security age and education in influencing digital
in payments. These issues were also payments was also studied by Vally &
discussed by Akhila Pai (2018) Divya in 2018. Dr.K. Kamatchi Eswaran
Along with ease of use, social factors and (2019) found that only education has an
perception of brands are also found to be impact of adoption of digital payment.
important for influencing customer A contradicting view was given by Singh
adoption of digital payment (Chua Chang and Rana (2017) whose study showed that
Jin et al, 2020). This was also supported by the demographic factors do not really show
the research done by Andrew T Stephen any impact on the implementation of digital
(2015). The loyalty factor was also payment mode. Another angle was given
discussed by Dr.S. Manikandan and J. by Vaishnav Kameswaran, Srihari Hulikal
Mary Jayakodi (2017). Brijesh Sivathanu Muralidhar in 2019 whose study found how
(2018) mentioned in his article mentioned visually impaired customers used cash and
the importance of how customers want to digital systems for payment in metropolitan
behave and resistance to new innovations India.
on the usage of digital payment. Junadi, Other studies also investigated these
Sfenrianto (2015) studied the main factors factors. Factors determining digital
which influenced the reason behind digital payment and how this payment influence
payment in Indonesia and found 5 major how consumers purchase was found out
factors, namely, culture, perceived safety, from a study in Nigeria which also found
expectation of performance, expectation factors like digital literacy, financial
with respect to effort and impact of society. inclusion, service with respect to internet
Gokilavani, R, Kumar Venkatesh. D, and infrastructure as the important
Durgarani. M, Mahalakshmi R (2018) also elements for adoption of digital payment
studied the different factors affecting rate in Nigeria. (Oyelami, L.O et al,2020).
of adoption of digital payment. The Another study found out a positive
importance of digital payment in banking relationship between benefits and trust
was stressed by 2 papers. Roy, SK (2017) whereas there was a negative relationship
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between risk and trust. This trust motivation factors for the acceptance of
influenced customer intention to use digital mobile payment systems in India (Gupta,
payment. (Jungkun Park et al,2018). K. and Arora, N. ,2019). Usage intention,
Efficiency, safety, convenience, savings in usage of new methods and price discounts
cost and time, ease of use and privacy of etc influence mobile wallets usage among
consumers have positive and high impact consumers and government owned
on the rate of adoption of digital payment platforms like BHIM was found to be safer.
of consumers(.R. Gokilavani,2018) ( (Neelu Tiwari, Naveen Kumar Singh,
Cherinet Boke Chakiso, 2019). The 2019). A study by Dr. Mamta Brahmbhatt
importance of economic and other benefits (2018) found that preference of the wallets
along with safety factor in influencing was high in the city and the customers there
digital wallet payment was put forward by were aware of government initiatives. The
Sushil Punwatkar and Dr. Manoj Verghese role of government and that of government
(2018). Trust, safety and how much the owned platform was also specified by Prof.
system helps the user are also found to be Pushpa S. Abbigeri, Dr. Rajeshwari M.
factors which help the digital transactions Shettar (2018). Hendy Mustiko Aji et al
in gulf countries (Wassan Abdullah (2020) also studied impact of government
Alkhowaiter, Aug 2020). Vaidya et al support on usage of mobile wallets and
(2020) also talked about the importance of they found out that these effects of this
convenience in digital payment along with support vary between countries. An
connectivity issues and more penetration of analysis using unified theory of acceptance
smartphones. and use of technology model with
The importance of third-party payments personality difference as main factor with
which have a high positive relationship customer related sub factors found that
with the ability of finance companies to expectation from the system, usage
create value for the customers was studied intention and problem solving are the main
by Yao Meifang et al,2018. This factor was thrust areas for consumer adoption of
also highlighted by the study on the kind of mobile payment( Pushp Patil et al, October
advantages delivered by banking using 2020) (E.Slade et al,2015). Pushp P. Pati
mobile by Sampaio C.H. et al, 2017. The et al also talked about usage of theory of
importance of mobile wallets was studied acceptance model and unified theory of
by several researchers. Ramesh Sardar acceptance and use of technology model
(2016) study found out that mobile wallets (2018)
contributed to the development of cashless J. Sobana Shanthini Dr. J. Immanuel
electronic payments. The author Nallathmbi (2018) found that usage of
investigated the inter-operability of the cashless transactions like debit and credit
mobile wallets so that customers can cards was frequent, but security was the
benefit from easy and fast transactions The main challenge in adoption. Lavanya R
importance of social influence and risk of (2019) also spoke about digital banking
using mobile wallets were found to be services and government initiatives and
some of the factors for usage of wallets for their role in usage of digital payments in
payment (Madan.K, Yadav. R,2016). Cost her article. Prasanth et al (2019) found that
was found to be the important factor for although plastic money is used a lot due to
adopting digital wallet (P. Tiwari, V. Garg, its convenience, safety and trust are the
and A. Singhal ,2019). Personal factors, main deterrents in using them. Financial
technical factors and environment knowledge, non-acceptance, Infrastructure
influence mobile payment (Maris problems and economy problems were
Karsen,2019). Expectations with respect to found to be most important challenges of
performance and other technical factors are adoption of digital payment in rural sector.
more relevant than social or individual Improving these measures and trust are the
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found to be the main problems in digital concern, but it depends on how consumers,
payment whereas there is need for digital banks, and other agencies use and handle
payment to be made more accessible the information. Therefore, the study tries
among retailers and distributors. to find out consumer thinking about the
Technology like blockchain and bitcoin digital payments. The literature review
along with artificial intelligence are going reveals that majority of the consumers
to play a huge role in overall development prefer credit/debit card and they are
of digital payment in India. The role of comfortable using digital transactions.
government and other private organisations Security is found to be the most difficult
is also very important for making factor which prevents its usage. It was also
digitisation more widespread among inferred from the study that consumer has
villages and rural areas. It is also important enough awareness of the information
to remove safety problems in the area and security in cashless transactions. Cashless
create more awareness among people to transactions are to be encouraged as it
make it more popular as it is important provides convenience and agility. Even
method of payment due to its convenience. internet banking has become very popular
Good amount of primary research can be for transactions. Modern technology and
done by taking variables highlighted in the automation are going to take the
findings which can make future research transactions more user friendly in the
more robust. future. The studies also mention that
Government should invest more on reach digitisation is connected to self-efficacy
of internet and technology. More and is the need of the hour as consumers
awareness must be created among the want to shop more and want to pay through
public about the use of digital payment. online media and be innovative. There are
Internet speed must be increased. Private challenges of connectivity and
players in internet should also help in infrastructure, but the society is moving
improving reach of internet. Banking towards internet of things and artificial
should encourage more usage of credit and intelligence. So, consumers must be able to
debit cards. Mobile wallets must be adapt to these innovations, new additions
encouraged. Safety issues of usage of and techniques and move forward. The
internet must be addressed. Technology study is quite relevant in this era where
can play a role here. Retailers and technology and digitisation are essential for
distributors must be encouraged to use better consumer service. This study will
digitisation more. More studies must be help future researchers to formulate
conducted in these areas. Overall adequate primary data collection and
investment is required in this field. analysis which will ensure better results.
The future research can take a leaf out of
CONCLUSION these challenges and come out with new
innovative directions.
Transformations that take place in the The study is important for the industry as it
digital world have impacted in every phase highlights positive and negative factors and
of human life. Smartphones and internet highlights importance of technology and
facilities had made life simpler by a click safety issues. Very less studies have been
of a button. This ultimately increases the conducted in the role of digital payment
needs and expectations of the consumers. among the retailers. Also, less studies are
In the current scenario with the increasing there in the role of technology in digital
use of cashless payments has almost payment. There is need for more studies in
substituted the physical cash transactions. these areas which future researchers can
Though there are few limitations especially concentrate. There can be more studies by
when it comes to privacy and security using primary data collection and analysis
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