Understanding Cashless Payments in India

Topic : Understanding Cashless Payments in India

Name : Mansi Balpande

 

  1. Agarwal & Khatri (2024) concluded from the study that rising financial support of Indian government towards digital payments and increasing penetration of smart phones and internet are pushing the economy towards a cashless economy. Out of all the available modes of cashless payments, mobile wallets and UPI based modes are getting highest popularity. This adoption is also affected by the level of education, income, marital status, age, and occupation. People of middle age group, people who are in servicemen, people who are more educated are more aware about cashless modes.

 

  1. Mohd, D. K (2023) et al states that factors such as PAPU (Post-adoption perceived usefulness), PAPV (Post adoption perceived value) and PAPR (Post-adoption perceived risk) were the crucial factors that contribute to the higher user satisfaction with UPI-based payment systems in India. PAPV has emerged as the strongest predictor of user satisfaction, supporting the proposition that user satisfaction is the function of the perception of what benefits they get at a specific cost of technological adoption. The study also findings have supported that the satisfied users will continue their usage of UPI platforms even when the pandemic will get over.

 

 

  1. Raghavendra & Veeresha (2023) emphasizes the interaction between two competing platforms, conventional digital payments (which consist of NEFT, RTGS and Internet Banking) and the Unified Payments Interface, was examined using the Lotka-Volterra system of equations. The results also suggest that the market share occupied by UPI would eventually overtake the market share of other platforms. This is a call to banks and other financial institutions to explore, adopt and invest in new technologies if they seek to maintain their dominance over the financial sector.

 

  1. Meghana & Dheeraj (2022) conclude from the analysis it also appears that many people actually agree with the government on the usefulness of cashless economy as it helps to fight against terrorism, corruption, money laundering but one biggest problem in the working of cashless economy in India is cybercrime and illegal access to primary data. Therefore it’s important to strengthen Internet Security from protection against online fraud. Large number of population is still below literacy rate living in rural areas. For smooth implementation of cash less system in India, the following measures are recommended Government have to bring transparency and efficiency in payment system, strategies used by government and RBI to encourage cashless transactions by licensing payments banks, promoting mobile wallets and withdrawing service charge on cards and digital payments. A financial literacy campaign should be conducted by government time to time to make population aware of benefits of electronic payments.

 

  1. Computer (2022) states that Mastercard’s Team Cashless India campaign has had a positive and tangible impact on the lives of small and micro merchants who were previously not part of the formal economy. Through this campaign, Mastercard encourages people to nominate merchants who do not yet accept digital payments. Mastercard then works with the Confederation of All India Traders (CAIT) and acquirer partners to support the nominated merchants to deploy digital payments acceptance infrastructure.

 

  1. Shree & Durga (2023) concluded that cashless economy by fostering competitiveness, open access and payment interoperability, the integration of new technology and financial and social assimilation into the market, and the safeguarding of the security of digital transactions of customers, it should be beneficial to bridge the Digital Divide. The emergence of cashless payment systems poses several obstacles these include inadequate knowledge, less POS (Point of Sale), less ATMs, poor Internet connectivity, a concern with security and a lack of technological ability.

 

  1. Agarwal & Khatri (2024) emphasis that the research findings imply a major change in the adoption trend based on an analysis of trend of transactions made online in India during the previous five years. Both the overall volume and Rupee worth of digital transactions have increased significantly. The alternative hypothesis, which indicates a major shift in the adoption pattern of digital transactions, is accepted in place of the null hypothesis, which states there has been no significant change. These findings show that digital payment methods are becoming more widely accepted and used, which points to a change in India’s payment environment.

 

  1. Rahman (2022) et al states that Cashless payments will lead to financial inclusion, especially for the non-banked population. The experience of developed countries shows that regulators play a role in advocating for financial inclusion. Accounts from other countries that have moved further along the cashless road note that there are certain segments of society that may now be excluded, such as the older generation that are not so tech-savvy (a generational gap) and communities with poor internet connectivity (the digital divide). In Africa, India, and China, technology is an enabler of financial inclusion. Reforms are happening out of economic necessity in developing countries.

 

  1. Hewawasam (2022) et al from a practical aspect the research provides guidance for the mobile app developers, bankers on deciding of any latest technology introductions to the consumers, where it is significantly justified that Perceived Usefulness and Perceived Ease of use on QR Code Payment modes will increase the consumers’ usage on the application.

 

Also the banks and non – financial institutions should promote the advantages of using QR Code base payment modes in social media. They examined the mediating effects of behavioral intention and perceived satisfaction on the recommendation to use QR code payment methods. The findings indicate that ease of use, perceived usefulness, and attitude significantly impact users’ intention to use QR code payments, which in turn affects their satisfaction and likelihood to recommend these payment methods.

 

  1. Kaur (2022) through this study emphasizes that focusing on consumer behavior towards digital payment methods in relation to different types of purchases. The study conducts a literature review, analyzing national and international journal articles from 2015 to 2022, to understand the relationship between digital payment choices and purchase types. It also considers the impact and significance of COVID-19 on the adoption of various digital payment methods, contributing to the development of a new theory regarding payment behavior. The findings offer a detailed insight into this less-explored aspect of digital payment usage. The study aims to help in creating a more user-friendly digital ecosystem, supporting India’s transition to a cashless economy. Additionally, it provides a potential framework for future research in this evolving field.

 

  1. The transition to cashless payments in India represents a significant shift in the financial behavior of both consumers and businesses. This move towards digital transactions has been fueled by several factors, including government initiatives, advancements in technology, and changes in consumer preferences.

 

The Indian government has played a pivotal role in promoting cashless transactions. Initiatives like ‘Digital India’ and the implementation of the Unified Payments Interface (UPI) system have been instrumental. The demonetization move in 2016 also acted as a catalyst, pushing more people towards digital modes of payment. UPI has revolutionized digital payments in India. It allows instant money transfer through mobile devices and has become exceedingly popular due to its ease of use, speed, and security. UPI supports various transactions including bill payments, merchant payments, and inter-bank transfers. The rise of mobile wallets like Paytm, Google Pay, and PhonePe has simplified transactions. These apps are user-friendly, secure, and offer additional services like bill payments, ticket bookings, and shopping.

Banks in India have also adapted to the digital wave by offering online banking services, mobile banking apps, and contactless cards. They have been active in promoting digital literacy and awareness among their customers.

 

 

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