International Journal Of Core Engineering & Management Volume-4, Issue-2, May-2017, ISSN No:

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1 A STUDY OF PEOPLE S PERCEPTIONS, CONCERN & PREFERENCES TOWARDS CASHLESS PAYMENTS Ms. Priyanka Tanwar Assistant Professor, IPS Academy, IBMR, Indore, India Dr. Vineet Jain Associate Professor, Pacific University, Udaipur, India Abstract Digital India program is a major program of the Government of India, which has a vision to transform India into a digitally empowered society and knowledge economy. Digital India has a valid role "useless, paperless, cashless". Today, we can claim a strong retail payment structure in the country compared to any advanced country, and perhaps better in terms of diversity and efficiency compared to some of them. Variety of instruments are available for different users in different situations like bank saving account, cheques, debit cards, credit cards etc.even there are various remittance requirements of users such as National Electronic Funds Transfer (NEFT), Immediate Payment Service (IMPS), Aadhaar Enabled Payment System (AEPS) and recently Unified Payments Interface. The bulk & repetitive payments systems are Electronic Clearing Service (ECS), National Automated Clearing House (NACH) and Aadhaar Payment Bridge System (APBS). The cashless transaction system is reaching its growth rate day by day, as the market becomes global, and the growth of the banking sector, more and more people reach cashless systems from cash. Cashless systems are not only required, but today's society is also needed. All online market basically depends on cashless transaction system. Cashless infection is more secure than cash transactions, but it takes less time and it does not have the problem of carrying and troubles and tear like paper money. It also helps in the record of all transactions done. Therefore, it is without doubt that the future transaction system is cashless transaction system, as a part of promoting cashless transactions and converting India into a low-cash society, various methods of digital payment are available. I. INTRODUCTION On 8th Nov, the Government initiated the Demonetisation Drive and announced that from 9th Nov - the existing Rs. 500 and Rs notes won t be considered as a legal currency. The existing notes shall either be: Deposited in the Bank or Exchanged for new notes. Although the government is making the best efforts at its level to provide new notes, although there is a huge shortage of new notes and it may take some time for the Government to print some new notes so that all existing notes can be changed. The situation may take some time to become normal and by then many people are suffering because they cannot do transactions because of lack of cash availability. Even to the extent that the queue and economists will affect the economic 8

2 growth due to the ongoing campaign to replace high-value bank notes for the cash of the common citizens, there has been a lot of talk about the government's use of the present situation Or cannot. Pushing India for Cashless Future for various reasons it is desirable to reduce dependence on the Indian economy. In India the word is the most cash for the gross domestic product ratio, and the cost of lubricating the economic activity with paper. The purpose of demonetization was to fight against corruption, black money and Fake currency notes. Since 500 and 1000 currency notes constitutes a major part approximately 86% in the indian economy it was tough decision for the government to implement it successfully. All most all the black money was stored in the form 500 and 1000 currency notes it would become impossible for the black money holder to keep it since its value had become zero. The announcement of the demonetization of the currency caused huge convenience to the people. They were running to banks to exchange, deposit or withdraw notes. Also there were long queues in banks since a huge amount of population has to exchange their notes. The shortage of availability of new notes also created problems. There was not enough new currency notes for different transactions. Business of various people suffered badly. They were not able to do transactions since they hugely depended on cash transactions. The developments in information technology and communication technology, world over, different kinds of payment instruments and innovations in the instruments and the payment systems have been generated. This has created a way for the country to go for digital payment options. Although cash is not only the way to make payments there also new methods of doing payments. The government also focused people to go for paperless or cashless transaction. For this government offered various options such as -: 1. Cheque 2. Demand Draft 3. Net Banking/ Online Transfer 4. Debit/ Credit Card 5. Gift Card 6. Ewallet 7. UPI Apps How to make a Cashless payment? 1. Cheque This method of payment has been there for decades and almost everyone knows about this method. You can issue a cheque for the specified amount from your bank account to be transferred to someone else s bank account. The payment is processed through the banking systems and therefore this method is also considered as the best system of payment as everything gets documented and there is a proof of payment. However, it may take a few days for the payment to get transferred and there is also a risk of default associated with cheque payment as the cheque may get dishonored as well. To avoid such payment failure issues, the other 6 cashless options have started gaining popularity as there is no payment default issue associated with the other 6 cashless options. 9

3 2. Demand Draft To avoid the risk of payment fault and is signed by the banker. Both the above options i.e. Cheque as well as Demand Draft, require a person to visit the Bank/ATM to deposit the cheque/demand Draft. Moreover, the bank may also take some time to process and complete the transaction. 3. Net Banking/ Online Transfer With the growth of internet, account transfers have been made very easy. You don t always have to go to the bank to do an account transfer. You can do the same yourself if you have your internet banking id and password. This is much faster than cheque transfers and there also won t be any risk of payment fault. So rather than instructing the bank to transfer the payment, you can do the same yourself. If the payment is to be transferred to an account within the same bank -the amount will get transferred instantly. If the payment is to be transferred to a bank account in some other bank - it may take some time for the payment to get processed. 4. Debit Cards/ Credit Cards Use of Debit cards and Credit Cards in India is also not something which is new and has been there for a long time. Most of the people who have a bank account also have a debit card but they may or may not have used it till now. However, as the new currency is taking time to reach to everyone, many people have started using Debit Cards for payment. The merchant to whom the payment is being made should have a card receiving machine and the payment would be made instantly once you swipe the card without any risk of payment fault. 5. Gift Cards As the name suggests, this card is used for gifting. So instead of gifting cash, I can gift somebody a card which has a pre loaded amount in the card. This amount is loaded by the bank into the card and can be used at all places where the Debit/Credit cards are accepted. In other words, it is just like a Debit/ Credit Card except for the fact that it is mainly used for gifting. But you can also create such a card for your own personal needs. 6. Mobile Wallets The mobile growth in the past few years has led to a new form of payments i.e. Payments through the mobile wallets. You can load money in your mobile wallets like Paytm, Mobikwik etc and then use it to make payments. These mobile wallets are very convenient to use for small payments and a lot of people have now started accepting it. The payments can be transferred instantly to any person across the country and the person receiving the payment is also not required to have any card machine for accepting such payments. These mobile wallets are currently giving a lot of discounts as well and millions of people already use these apps. Moreover, with the Demonetisation drive being initiated by the Indian Government, the use of such digital wallets has increased more than 10 times as it is very easy to use and can be used to make any payment. 10

4 7. Unified Payment Interface - UPI After the success of Mobile Wallets, the Indian government has also started focusing more on digital payments and mobile payments. They have launched the unique payment gateway through which a person can transfer money to any other person instantly through the mobile. The person receiving the payment is not even required to share this bank details with the person making the payment. You can create a virtual address like abc@axisbank and can share this with the person making the payment. The person making the payment will transfer the payment to the above mentioned id and the person receiving the payment can then transfer this amount to his bank account. Moreover, you are also not required to create a unique id for each different bank account and a single virtual address will solve the purpose. Say for e.g.: If you are using the Axis Pay app - you are not required to use the apps of the other banks and through the axis pay app itself you can make all payments and receive all payments in different bank accounts held in different banks. Mobile Wallets and Unified Payment Interface are certainly the future of cashless payments especially for small transfers. When a retailer has to receive small payments from a large number of customers, it may not be viable for him to share his bank account number with everyone. II. OBJECTIVES 1. To study the people s perception & concerns towards cashless payments. 2. To study the people s preferences about cashless payments system. 3. To study the level of adoption of digital payments solutions & user habits. III. RESEARCH METHODOLOGY The secondary data has been collected. The data is taken from journals, research papers, newspapers articles, websites and published reports. The data is taken from online survey which was conducted from 26 to 28 December Some 663 respondents participated in it. Figures denote % of respondents. IV. DATA ANALYSIS & INTREPRETATION 1. Why would you adopt a cashless payment system? Convenience 84% Discounts/cash back rewards 49% Easy tracking of spends 54% Shortage of currency notes 34% Interpretations: Most people are switching to digital payments for its sheer convenience. 11

5 2. What is your biggest concern around cashless payments? Security (risk of identity theft) 66% Poor Internet connectivity 48% Merchant acceptance 59% Costs 28% Lack of tech knowhow 10% Interpretations: Most of the people concern towards security. 3. What has been your preferred mode of payment since 9 November? NetBanking 59% Credit /debit card 88% Cash 17% Ewallet/Mobile app 47% Cheque 19% Interpretations: Card has been the preferred mode of payment since the demonetisation. 4. For high value transactions, what is your preferred mode of payment? NetBanking 74% Credit/Debit card 54% Cash 5% Ewallet/ Mobile app 8% Cheque 53% Interpretations: Consumers seem to prefer NetBanking for high-ticket transactions. 5. Would you use cashless payments if notes come back into circulation? For most transactions 65% For some transactions 22% For rare transactions 10% Never 3% Interpretations: Almost two third of the respondents are likely to continue with digital payments for most transactions. 6. Have you installed antivirus or malware protection on your phone? Yes 41% No 59% Interpretations: Three out of five respondents do not use security software on their mobile Phones. 12

6 7. How often do you change device passwords, PIN of debit/credit cards? Once in 6 months 35% Once in a year 27% Every month 17% Never 21% Interpretations: One out of every five respondents admit to never changing their security Passwords. 8. What can be safely shared when you do cashless transactions? Aadhaar 32% Credit/Debit card number 14% All of these 10% None of these 41% Interpretations: Several users seem comfortable sharing critical financial details during digital transactions. 9. Do you access public Wi-Fi from phone or laptop? Yes 30% No 70% Interpretations: Three out of 10 respondents say they regularly access unsecure public Wi-Fi. 10. Do you store card details on your phone or laptop? Yes 35% No 65% Interpretations: More than two third prefer convenience over safety and store financial details on their devices. IV. FINDINGS: 1. Even when people are adaptable to the new, digital mode of payment, questions remain on the operational aspects of the forum. Note that the increase in digital payments that follow the notes restrictions clearly influences the existing infrastructure. "As a nation, we are clearly behind the preparation of this massive step towards digital payments," Mr. Joy admitted. 2. There have been several reports of card transactions on the pop terminals that do not go for connectivity or server reasons. 3. Few customers are not satisfied with the E-wallet transactions because there balance amount shows incorrect in E-wallet transaction. 13

7 4. Mr. Gupta admits, "The issues of network congestion and Internet connectivity have led to users' wallet balance and the reason for some delays in reflecting transactions," explaining that the result because of rapid increase in problem transactions. It assures users that there is nothing to be worried about it, they say, "Digital payments can be fully detected and reconciliation. Your money is safe and is not going anywhere. " 5. Ewallet platforms are constantly upgrading their systems to cope with the increased traffic. 6."Physical infrastructure supporting the digital payments needs to revisited and scaled up to cater to the next level of usage," says Mohan Jayaraman, Managing Director, Experian Credit Bureau, India. Merchant acceptance of digital payment platforms also remains a sore point. 7. Shailaz Nag, COO, PU India says that those coming to the existing platforms and digital platforms are still confused with various options like those POS terminals, E-wallet, IMPS (instant payment service). Merchants are not fully aware of policies and rules around accepting digital payments. This confusion is also present among end users who have to struggle with different experiences of platforms. 8. "The user experience across these digital platforms is not similar," says Nag, pointing out how even among banks, different authentication systems exist a combination of ATM PIN, password, One-time Password (OTP), security questions etc. 9. Concerns about security issues transactions and protection of identity theft still prevents thousands of people from going on the digital payment platform. 10. In our survey, 66% of respondents said that safety concerns are their biggest concern. People need to change a cultural and mindset to bring them on board and they feel comfortable with digital payments argues K.V. Karthik, Partner, Financial Advisory, Deloitte. 11. Experts say that digital payment platforms are completely secure, which requires user precaution. "Cash can be stolen and you will have to suffer." However, if there is any fraud with your debit / credit card, then you have the support. According to the regulatory guidelines, when reporting bank fraud, investigate the case and you will get compensation because it Is not due to the wrongdoing, points out Karthik. 12. The most popular E-wallet platforms comply with the latest security specifications and add additional levels of security, experts say. V. CONCLUSION In order to encourage adoption of digital payment platforms, the government is going out of all, he initially waived service tax on card transactions up to Rs 2,000 and announced a discount on the purchase of petrol, diesel and railway tickets, if digitally it has been paid, it is also pushing for a 14

8 quick cut in the transaction fee which is levied by banks on loans and credit cards. Recently, the Government introduced two schemes, Lucky Grahak yojana and Digi Dhan Vyapari Yojana, offering cash worth Rs.340 crores to encourage digital payments between Rs. 50 to Rs. 3,000. It is also pushing the United States (United Payment Interface) aggressively and is expected to launch an app that allows users to download for transactions in many banks. An advanced, feature-rich version of the USSD (Unstructured Supplementary Service Data) platform, which allows banking transactions through feature phones without internet connectivity, is also to be unveiled. Without a mobile phone, they can still communicate digitally through a based payment using their fingerprints. E-Wallet providers have also jumped on this occasion. This segment is getting discounts and cash back rains, which is attracting more users to these platforms. For example, in the free charge, a recent purchase of two days flat 100% cash back camp, like film tickets, food and online shopping, was purchased. It claims that more than 3 million new purses were made during this small window and the volume had increased 15 lakhs. Other service providers like Paytm and Mobile wik are also offering cash back offers. Banks are not far behind in promoting their debit and credit cards. In our survey, so many people are regularly using debit or credit card after the day of ban. For higher pay, four out of four respondents now prefer internet banking and use more than half the debit or credit card and also make checks. However, neither lack of cash nor discounts or rewards are the main drivers behind the moving attraction toward digital platformsas much as 84% of respondents say they will switch to the sheer convenience afforded by digital payment platforms. Only 34% accepted that due to the ongoing cash crisis, they were forced to adopt cashless mode. According to Sony Joy, the CEO of Cofounder and Chiller, a multibillion mobile payment app, "Early reluctants have also started moving towards digital payments." "It is easy to pay for small ticket items for the use of user E-wallet," says Sudhanshu Gupta, vice president of Paytm, "E-wallet platforms are being adopted by mainstream users for daily transactions of around Rs. 50. It seems that it is here to be interested in digital payments, out of which two respondents say that they will continue to use cashless mode for most transactions, even currency notes are in vogue. 15