Attitude of Women towards Cashless Economy: A Study of Ludhiana City

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1 Attitude of Women towards Cashless Economy: A Study of Ludhiana City Sumedha Gupta Assistant Professor P.G. Department of Commerce & Management, M.T.S. M. College for Women Abstract Ludhiana Our Prime Minister Narendra Modi on 8 Nov took a bold step of demonetization and declared 500/- and 1000/- old currency notes illegal. Demonetization was initially supported by public with an expectation that it will free the economy from corruption and black money which in turn will act as gap filler between haves and have not s. But later reports indicated that huge pain and problems that common men had to go through each day may not worth it. So the movement which was started to curb black money from economy ended with the motto or logo to make nation a cashless economy. A cashless economy is one in which most of the transactions are done using cards or digital means like e- banking, debit and credit cards, POS (point of sales), digital wallets etc. In simple words, the circulation of physical currency is minimal in such a country. Further to lure people towards cashless transactions, govt. and the e-wallet companies are providing various incentives on digital payments like 0.75% discount on petrol prices if paid digitally and several cash back schemes from paytm, mobiwik etc if products are purchased or payments are made through these platforms. So, the journey which was started as compulsion due to demonetization, especially for educated middle class Indian people is now becoming their choice. But still the question arises how people feel about digital payments, quantum of (how many) payments are made by them digitally, what are the various modes used by them, and how they perceive these payments. In this regard, present paper is an attempt to study the perception of present day educated women towards recent move of our government i.e. cash less economy. As India is still in its infancy stage towards digital or cashless economy, so viewpoints of Indian women who constitute half of the population will naturally help the policy makers to make further strategies to reach their goals. Key Words: Demonetization, Cashless Economy, Digital payments, perception, black money 129

2 Introduction India continues to be driven by the use of cash; less than 5% of all payments happen electronically however the finance minister, in 2016 budget speech, talked about the idea of making India a cashless society, with the aim of curbing the flow of black money. Further to continue with this aim, our prime minister Narendra Modi on 8 Nov took a step of demonetization and declared 500/- and 1000/- old currency notes illegal. Demonetization was initially supported by public with an expectation that it will free the economy from corruption and black money which in turn will act as gap filler between haves and have not s. But later reports indicated that huge pain and problems that common men have to go through each day may not worth it. So the movement which was started to curb black money from economy ended with the motto or logo to make nation a cashless economy. Now question arises what is cash less economy? A cashless economy is one in which most of the transactions are done using cards or digital means like e- banking, debit and credit cards, POS (point of sales), digital wallets etc. In simple words, the circulation of physical currency is minimal in such a country. Third party which may be government or public or private sector bank keeps money of public and when it is not needed that third party can use that money. Presently India uses too much cash for transactions that we stand nowhere as compared to other nations in terms of non cash transactions. During demonetization when people were struggling in queues in front of banks and ATMs to withdraw petty cash to meet their day to day expenses a simultaneous movement was running on TV or social media to motivate the people to shift to digital payments using debit/ credit cards and e wallets like paytm, mobiwik, paypal etc to fight cash crunch. Prime minister himself at different places urged Indians (nation) to convert their mobiles into wallets. During these 50 days of cash crunch, many small vendors were compelled to establish POS terminals to accept digital payments and even vegetable- fruit sellers were shifted to paytm. Further to lure people towards cashless transactions, govt. and the e-wallet companies are providing various incentives on digital payments like 0.75% discount on petrol prices if paid digitally and several cash back schemes from paytm, mobiwik etc. if products are purchased or payments are made through these platforms. So, the journey which was started as compulsion due to demonetization, especially for educated middle class Indian people is now becoming their choice as they are finding certain advantages like security of money, saving of money due to discounts and freebies and saving of time and energy due to fast processing of transactions. Moreover a cashless economy can reduce the 130

3 instances of tax avoidance, black money, corruption, money laundering and stimulate economic growth. Review of Literature P.V.C.Okoye & Raymond Ezejiofor (2013) the present study was motivated by the apparent inadequacy of Nigeria in adopting and implementing the cashless economy policy. The objective of the study was to assess the significant benefits and essential elements, and to check the extent to which it can increase the growth of financial stability in the country. Salihu Shakirat. A. et al. (2013) in their study discussed the impact of IT on cashless society in Nigeria. The paper described the deployment of Information Technology in banking industry and gave an overview about how Information Technology was used in Nigerian banks. It analyzed three variables relating to the Information Technology and provided the information on how the people adopted innovative technologies, how they had utilized the technology and lastly the impact of adoption of Information Technology devices on cashless economy in banking sector. Sushma Patil (2014) in her paper presented an overview of the trends in plastic cards usage since their introduction in Indian banking sector. It explained that technological revolution in financial sector had undergone an immense change. The Number of innovative products for making payment has developed after the privatization and globalization. Customers have shown their preference over the usage of the plastic money generally over a period of time in the banking process. Various other types of plastic cards provided by banks in India are ATM cards, Smart cards. B.M. Saini (2016) in his paper discussed the impact of demonetization on movement of making India a cashless economy. It informed that in fact this movement was started on 15th Aug when Prime Minister announced opening of Jandhan accounts on affordable price for poor and unbanked areas under financial inclusion. With the same objective, on 8th Nov. at 8.00 p.m, Prime Minister announced that from 9th Nov. 2016, old notes of denomination of Rs.500/ and Rs.1000/- will not be in use except for some lifesaving services for time being. So many additions and modifications were done in this process. The paper concluded that results would come in form of saving in certain expenses like printing, preserving and security if we will move towards cashless transactions. 131

4 Pradnya Surwade & Dr. Mahesh M. Badve (2017) conducted a study with the objective to know the perception of people about demonetization. The data was collected from 100 respondents using convenience sampling technique. The results stated that peoples were aware about online banking uses, but not fully. The Customers were happy after using e- banking as it saved their precious time. It also indicated that a usage of online banking by customer varies according to age, gender, occupation and income Level. E-banking has increased the pace of transaction and customer perceived that e-banking has made the life easier. Statement of the Problem Present paper is an attempt to determine the attitude of present day urban women towards recent move of our government i.e. cash less economy. Objectives of the study (1) To identify the demographic profile of the respondents who make cashless transactions. (2) To identify the different modes of payment used by urban women before and after demonetization. (3) To identify the reasons for the use of cashless transactions by urban women of Ludhiana. (4) To assess perception of urban women towards digital payments. (5) To identify the frequency of technological challenges faced by urban population while using the cashless transactions. Scope of the Study The research was undertaken to collect information relating to cashless transactions from the urban women respondents in Ludhiana. Research Methodology Research design The research design used in this study is the survey method. The population of this study was taken from the industrial town of Punjab i.e. Ludhiana. Sources of Data Both the secondary and primary data has been used in this research. Sources of primary data are urban women of Ludhiana who are using online banking, mobile payments etc. 132

5 alon with cash transactions. Sources of secondary data are the banks websites, online journals, newspapers, websites etc. Data Collection Method Data was collected from 100 women using online questionnaire based on convenience and snow ball sampling belonging to Ludhiana city between periods of March 2017 to April Statistical Tools Used The database is analyzed using the simple percentage procedure, mean, median, mode and standard deviations with the help of SPSS v 20.0 package. Analysis and Interpretation Demographic Profile of Respondents Table 1: Demographic Profile of Respondents Particulars Classification Frequency Percentage Age Group Less than and above % 42% 15% 01% Marital Status Married Unmarried % 49% Education Occupation Undergraduate Graduate Post Graduate P. hd. or above Employed Student Unemployed % 19% 70% 09% 53% 45% 2% Annual Income Family Less than Above % 30% 16% 20% No. of Daily Payments Less than 5 or More than % 19% 05% 133

6 As per shown in table demographics of respondents are classified according to their age, education, marital status, occupation and annual family income. 45% of respondents are below 25 years of age. Majority of respondents are post graduate (70%). 53% of respondents are employed. 34% of respondents have their annual family income below Rs and 30% respondents have their annual income from Rs to Rs Majority of respondents (76%) are making 5 or less than 5 payments on daily basis. Different modes of payments used by women before and after demonetization Table 2: Mode of payment before Demonetization Cash Debit E- Mobile Cheques, Card banking payments Vouchers N Mean Median Valid Missing Mode Std. Deviation The above table 2 shows that before demonetization cash was most frequently used as a mode of payment by women respondents ( with mean 2.80 and mode 4) where as debit cards were occasionally used by them but the E-banking, cheques and mobile payments (mode=1) were rarely used by them for making payment to others Table3: Mode of payment after Demonetization Cash Debit card E-banking Mobile payments Cheques, Vouchers N Valid Missing Mean Median Mode Std. Deviation Popularity of cash as a mode of payment has been decreased after demonetization as mean score has been decreased from 2.80 to 2.39 and mode after demonetization appears to be 3. Usage of debit cards remains the same i.e. it has been occasionally used as before. But now women respondents are making payments through mobile occasionally which they do 134

7 rarely before demonetization. But cheques (mode=1) are still rarely used by them even after demonetization for making payment for purchases. Impact of Demonetization on digital payments Table4: Increase in Digital payments due to Demonetization Frequenc y Percent Yes No Valid Percent Total % of women respondents were of the view that frequency of cashless transactions has been increased due to demonetization. Table5: Reasons of increase in digital payments during demonetization Frequency Percentage Long queues in Banks 34 55% cash crunch 13 22% Publicity on TV & social media 7 11% Incentives offered by govt. 6 10% Expenses were more than cash 1 2% available Total % Those respondents who have agreed that demonetization has increased their digital payments in Table 4 were asked the main reasons responsible for such increase. For majority of women respondents (55%) long queues in banks for withdrawal of cash was main reason which motivated them to increase digital payments whereas publicity on TV or incentives offered by govt. during this period were motivating factors for only 21% of respondents. Perception of Women towards Digital Payments Respondents were asked to share their level of agreement on 9 statements about their perception towards digital payments. The degree of agreement towards statements was set from 1 to 5 (5 denotes the strongly agree, 4 denotes agree, 3 denotes neutral, 2 denotes disagree, whereas, 1 is for the strongly disagree). 135

8 Mean score and mode is calculated for the analysis of the statements. Along with the mode value, in case of mean score following criteria is used for analysis part:- a) The mean score among means Strongly Disagree b) The mean score among means Disagree c) The mean score among means Neutral d) The mean score among means Agree e) The mean score among means Strongly Agree Table 6: Perception of Women towards Digital Payments S. No. Statement Mean Score 1 I prefer to use cash when dealing with small amounts of money. 2 I prefer to store money in a bank account and use electronic payments when dealing with large amount of money. 3 My choice of payment method is influenced by my habits. Mo de Std. dev Level of Agree ment Strong ly agree Agree Agree 4 My choice of payment method is influenced by trust I have on retailer. 5 I generally trust the banking system in my country. 6 I believe that using cash stimulates the black economy (tax evasions corruption). 7 I feel electronic transactions make my life easier. 8 I feel confident enough when using electronic payments. 9 I find easier to control how much I spend when I use cash Agree Strong ly agree Agree Agree Neutra l Agree As per table 6, respondents strongly agree with statement no.1 and 5 which shows that they trust the Indian banking system and they prefer to make payment through cash when small amount is involved. Further they agree with statement no. 2, 3, 4, 6, 7 and 9 which reveals that they prefer to make digital payments when large amount is involved, their choice of payment of method is influenced by their habit and trust on retailer. They agree that cash 136

9 transactions stimulate black economy. Further they agree that electronic payments have made their life easier but they also feel that with cash payment they can exercise control over payments. But they are neutral about their confidence regarding usage of electronic payments. Technological Challenges encountered by Women Respondents were asked to share their experiences and inform that when using electronic payments how often do they encounter the following technological challenges? Their responses were gathered using five point scale i.e. (1) for Never; (2) for rarely; (3) for occasionally; (4) for frequently; (5) for very frequently Table7: Frequency of encountering technological Challenges S. N o. Statement Mean Score Mo de Std. dev Frequenc y of Problem 1 I cannot pay with bank card Rarely 2 I cannot pay because system is down occasional ly 3 I cannot pay because of system error frequently 4 I cannot pay because I feel confused by system 5 I cannot pay because I am not familiar with system occasional ly Rarely As per table 7, respondents frequently face the problem of system error but they rarely face the problems of nonpayment by bank card and the failure of payment due to non familiarity with system. But they occasionally face the problems due to downfall of system or confusion with the system. Conclusion Demonetization scheme was declared by government last year with the objective to curb black money from economy, bring more and more people under tax regime and lead the country towards cashless economy. For this the government and companies came forward with cash incentives for those who make digital payments and this was advertised heavily on the social media and TV. But still the question arises how people feel about digital payments, quantum of (how many) payments are made by them digitally, what are the various modes used by them and how they perceive these payments. In this regard, present 137

10 paper is an attempt to determine the attitude of present day educated women towards recent move of our government i.e. cash less economy. Majority of respondents in study agreed that demonetization has led to increase in digital payments but they are not motivated by the publicity or incentives offered by government but compelled to do so due to adversities faced by them during period of demonetization. They have positive perception towards digital payments and trust Indian banking system but not so confident in making digital payments. They face certain technological problems like system error and ambiguity of information available on banking and other payment sites. As India is still in its infancy stage towards digital or cashless economy, so this study is significant for providing the baseline information and references for policy makers to understand the psychology of women towards digital payments and make further strategies to reach their goals. A study with different sample size and in different locations may provide fruitful results to understand the perception of people towards cashless payments. Further study can be conducted on women residing in the rural areas and the perception of rural women can be compared with the urban women perception towards demonetization and digital payments to get the holistic approach of the topic. References Abirami A (2017).International Journal of Innovative Research in Management Studies (IJIRMS), 2(3), Meenakshi (2017). An Exploration on Cashless Society Imperatives and Perception of People Regarding the Concept of Cashless Society in India. International Journal of Science and Research (IJSR), 6(2), N. Mallat. (2006). Exploring Consumer adoption of Mobile Payments- A Qualitative Study. Sprouts: Working Papers on Information Systems, Volume 6, Article 44 Okoye, P. V. C., & Ezejiofor, R. (2013). An appraisal of cashless economy policy in development of Nigerian economy. Research Journal of Finance and Accounting, 4(7), Patil, S. (2014). Impact of plastic money on banking trends in India. International Journal of Management Research and Business Strategy, 3(1). Pradnya Surwade & Dr. Mahesh M. Badve (2017). People's Perception towards Demonetization. International Journal of Informative & Futuristic Research, 4(6), Saini B.M. (2016). Demonetization Metamorphosis for Cashless India. International Journal of Science and Research, 5 (12), Salihu Shakirat.A, Mustapha Kassim, Ajayi Ireti. H Binitie Amaka. P. (2013). The Impacts of Information Technology in a Cashless Economy in Nigeria. The International Journal of Engineering and Science (IJES),