A Study on Customers’ Perception towards Digital Payment System with Special Reference to Coimbatore City
Dr. P. V. RAJESWARI,1Assistant Professor of Commerce, Jairam Arts and Science College, Salem – 8.
Dr. P. PIRAKATHEESWARI,2Assistant Professor of B Com – PA, Sri Ramakrishna College of Arts and Science, Coimbatore.
&
Prof. M. VADIVEL,3Assistant Professor of B Com – PA, Sri Ramakrishna College of Arts and Science, Coimbatore.
ABSTRACT
The last decade has seen tremendous growth in use of internet and mobile phone in India. Increasing use of internet, mobile penetration and government initiative such as Digital India are acting as catalyst which leads to exponential growth in use of digital payment.
Electronics Consumer transaction made at point of sale (POS) for services and products either through internet banking or mobile banking using smart phone or card payment are called as digital payment. The consumer perception of digital payment has a significant and positive impact on adoption of digital payment. Digital payments are the trend of the day. In a mixed economy like ours, this is a great boon for all the users around the world. Digital payment system completely changes the traditional system of making and receiving payment throughout the world. It saves time, energy and resources. The present study is to analyse the awareness level and purpose of usage of digital payment systems. The results show that the respondents are highly aware about debit cards and digital payment system is used highly for utility payments.
Keywords :Cashless Transactions Consumer Perception; Digital Payment; Digital Wallets, Mixed Economy.
INTRODUCTION
Digital payments are the trend of the day. In a mixed economy like ours, this is a great boon for all the users all around the world. Digital payment system completely changes the traditional system of making and receiving payment throughout the world. Further it saves time, energy, resources and has many positives with it. The parties involved in a monetary transaction are of two types namely payer and payee. Payer is the one who pays for the transaction and Payee is the person who receives the money or money’s worth thereby. The parties will be using the electronic modes for making and receiving the payments at both ends of transactions. No party is required to hold hard cash in hand for the sake of transactions
rather everything is made in electronic form through online. High end technology is used for the execution of transactions and it will be very much convenient for everyone to handle these kind of electronic mode transactions.
The cash payment system is a time consuming one whereby one need to withdraw cash from bank and ATM, exchange it for goods or services with the vendor, followed by vendor’s visit to the bank and ATM for depositing it and so on. Hereby these digital payment system helps everyone to save time, energy, etc. and more convenient cum instant money transfers all across the world for any kind of transactions. Further, there are many types of digital payment systems available at present which includes unified payment interface, aadhaar enabled payment service, unstructured supplementary service data, card payments and electronic wallets. These different modes of digital payment systems are being used all across the world based on the requirements and suitability of the users’ transactions.
STATEMENT OF THE PROBLEM
India is a developing economy characterised by middle class population, emerging standard of living, young population with huge opportunities for employment and entrepreneurship. The development of Indian demographics is resulting in high demand for all types of financial and non-financial services across the world. Presently, the “Digital India” initiative of the government has given a tremendous boost to the usage of digital payment systems throughout the country. Coimbatore is a dynamic city with impressive demographics and the city is going digital and is on the path to embrace technology in all its spheres. The present study is therefore undertaken to identify the awareness and purpose of usage of digital payment systems in Coimbatore city.
OBJECTIVES OF THE STUDY
1. To know the profile of the respondents.
2. To analyse the awareness level of the respondents towards the types of digital payment systems.
3. To identify the purpose and various attributes of digital payment systems.
RESEARCH METHODOLOGY 1. Sampling
Data has been collected from 250 respondents using random sampling technique.
2. Statistical tools used in the study
Percentage analysis
Descriptive Analysis
Chi-square test LIMITATIONS OF THE STUDY
The study has the following limitations
The study is limited to Coimbatore city so the findings cannot be generalized.
The findings of the study are entirely based on primary data. So, the results are subject to limitations of primary data.
REVIEW OF LITERATURE
Jayakumar and Vincent Sahayaraj(2016) in their article have comprehended the factors that make a customer a happy customer. The article shows that the customers prefer online banking, ATM etc. but some factors like alertness and consistency have consequence on their level of satisfaction. The customer satisfaction increases towards the use of current banking services if the bank provides more consistent services with value as promised and on time. SBI has been successful in implementing substantial factors like modern equipment, infrastructural amenities, quality of equipment used. They have been flourishing in achieving an agreeable relationship with customers. Most of the respondents of the article felt that the employees of the SBI are very intense to satisfy their customers.
Alhaj (2012) has made a study to investigate the factors that manipulate the consumer adoption of Electronic banking in Nigeria. The article examines the relationship between Electronic banking adoption and the determining factors for critical success of Electronic Banking in Nigeria. The results show that the factors that determine the adoption of Electronic banking in Nigeria are awareness, ease of use, security, cost, reluctance to change and accessibility. The results of this study show that the perceived ease of use and reluctant to change are found to be insignificant in determining its adoption.
Ashiya(2006)has done the study to find the current offerings and developments provided by electronic payments. The author has evaluated different modes of e-payment such as plastic cards, debit cards, credit cards, smart cards, electronic cheques etc. These electronic ways are an excellent instrument for payment system. The author analysed that security was the main concern among electronic payments and has suggested that E-payment technology could be used as a tool for the improvement of consumer loyalty and business of banks as it has reduced the cost and risk factor and increases the consumer loyalty.
Jain and Hundal (2006) have described “The importance of mobile banking and barriers in the adoption of mobile banking”. The objective of the study was to find the reasons why the people had not fully accepted the technology though it provided much advantage to the banking customers as compared to previous technologies. The study indicated the various barriers, viz. access problems, dissatisfaction and inability of service providers in the adoption of mobile banking services. Finally, the customers got depressed by the complicated function while accessing the mobile banking services which lead to rise in their dissatisfaction level, as no proper guidance was provided to them.
Kumbhar(2012) has done a study on “Reliability Of “E-bank equal Scale: Retesting in Internet Banking Service Settings”. The purpose of the article was to test consistency and validity of E-Bank Qual scale. The scale was to develop for the measurement of service quality and customer contentment in e-banking. In the article, the author has conducted an assessment of internet banking users and examined their liability and the validity of E-Bank Qual scale. This scale was tested using Cronbach’salpha reliability test which is a familiar test. Result of the dependability and validity test shows that System accessibility, e- fulfilment, accurateness, Efficiency, Security, Responsiveness, Easy to use, Convenience, Cost Effectiveness, Problem Handling, Compensation, Contact, Brand perception and Perceived value are the most important dimensions of E-Bank Qual Scale and it is reliable and valid for its supplementary use.
FINDINGS OF THE STUDY
The following table shows that the demographic factors of the study
Table 1 – Demographic Variables of the Respondents
Demographic Variables No. of Respondents % Age
Below 25 59 23.6
26-35 89 35.6
36-45 61 24.4
Above 45 41 16.4
Gender Male 118 47.2
Female 132 52.8
Marital Status Married 160 64.0
Unmarried 90 36.0
Educational Qualification
School level 23 9.2
Under graduation 111 44.4
Post-graduation 86 34.4
Retired 30 12.0
Monthly Family Income
Below Rs.20,000 46 18.4
Rs.20,001- Rs.30,000 73 29.2
Rs.30,001- Rs.40,000 58 23.2
Rs.40,001- Rs.50,000 58 23.2
Above Rs.50,000 15 6.0
Occupation
Student 30 12.0
Employed 51 20.4
Self employed 70 28.0
Professional 56 22.4
Retired 14 5.6
Home maker 29 11.6
Type of Family Nuclear family 138 55.2
Joint family 112 44.8
Total 250 100.0
It is inferred from the above table 35.6 per cent of the respondents are between 26-35 years of age. 52.8 per cent of the respondents are female, 64.0 per cent of the respondents are married, 44.4 per cent of the respondents have done under graduation, 28.0 per cent of the respondents are self-employed and 29.2 per cent of the respondents’ monthly family income is between Rs.20, 001 to Rs.30,000, 55.2 per cent of the respondents live in nuclear family.
DESCRIPTIVE STATISTICS FOR AWARENESS OF DIGITAL PAYMENT SYSTEM
The following table shows the awareness level of the respondents towards the types of digital payment systems.
Table2 - Awareness of Digital Payment System
Types of Cards Mean Std. Deviation
Credit card 2.33 .440
Debit card 2.38 .473
Rupay card 1.98 .791
Visa card 1.86 .822
Master card 2.04 .882
Paytm 1.49 .707
Free charge 1.62 .741
Airtel money 1.31 .536
Samsung pay 2.06 .817
Bank Prepaid Cards 1.94 .709
Point of sale 2.24 .749
NEFT 1.62 .758
RTGS 1.63 .718
ECS 2.14 .752
IMS 2.14 .814
It is inferred from the above table that most of the respondents are aware of debit cards and credit cards followed by point-of-sale transactions.
PURPOSE OF USAGE OF DIGITAL PAYMENT SYSTEM
The following table shows the purpose of usage of digital payment systems.
Table 3 - Purpose of Usage of Digital Payment System Purpose of Usage Mean Std. Deviation
Shopping 1.91 .955
Fund transfer 2.12 .879
Utility payments 2.41 .958
Ticket booking 1.96 .999
It is inferred from the above table that digital payment system is used highly for utility payment purposes. The ease of digital transactions which involves only minimal time, effort and resources may be the reason for the usage of digital payment system for utility payments.
FACTORS INFLUENCING PREFERENCE OF DIGITAL PAYMENT SYSTEM- DESCRIPTIVE STATISTICS
The following table shows the factors influencing preference of digital payment systems.
Table 4 - Factors Influencing Preference of Digital Payment System
Factors Mean Std. Deviation
Ease to transaction 3.96 1.722
Transaction charges 4.11 1.633
Convenience 3.24 1.690
Time saving 3.17 1.716
24*7 service 2.68 1.459
Security 3.46 1.645
It is inferred from the above table that transaction charges are the main influencing factor for the preference of digital payment system.
RELIABILITY AND VALIDITY
Table 5 shows the result of reliability analysis- Cronbach’s Alpha Value. This test measured the consistency between the survey scales. The Cronbach’s Alpha score of 1.0 indicate 100 percent reliability. Cronbach’s Alpha scores were all greater than the
Nunnaly’sgenerally accepted score of 0.7. In this case, the score was 0.769 for the digital payment modes used by the respondents.
Table 5 - Reliability Analysis-Scale (ALPHA)
Products/ Services Number of Cases Number of Items Alpha Value
Digital Payment Mode 250 13 0.769
HYPOTHESIS TESTING: ANOVA COMPUTATION
In order to test the hypothesis ANOVA was carried out. The results are given below. Table 6 gives the result of ANOVA computation on the basis of gender, age education, profession and annual income of the respondents.
Table 6 - Computation of ANOVA
Characteristics / Attributes
Gender Age Education Profession Annual
Income
F Sig. F Sig. F Sig. F Sig. F Sig.
Mobile Payment Wallet/Digital payment used
.199 .656 1.110 .354 13.929 .080 3.741 .006 1.046 .386 Frequency of use
digital payment to make online payment for bills and purchases
.002 .963 .821 .514 90.536 .000 5.109 .001 .665 .617
Brand Loyalty of Digital Payment mode
.987 .322 .910 .460 216.450 .000 2.252 .066 1.919 .110 Convenience in Use
of digital payment mode
.141 .708 2.131 .080 17.094 .000 1.418 .231 .714 .583
Secured Transaction 1.914 .169 1.015 .402 13.929 .000 2.283 .063 1.836 .125 Time Saving
through digital payment mode
8.266 .005 2.572 .040 67.566 .000 2.527 .043 1.087 .365 Acceptance
Wallet/digital payment mode
.446 .505 1.826 .127 22.713 .000 3.399 .011 .550 .700 Price of Using
digital payment mode (service charges etc.)
.122 .727 .461 .764 61.579 .000 1.507 .203 2.081 .086
Mobile wallets are capable of providing benefits to individual for purchase of product.
.987 .322 .910 .460 34.412 .000 2.252 .066 1.919 .110
Using the mobile .291 .590 3.705 .007 3.656 .007 1.670 .160 .619 .650
wallet improves the quality of my decision making for buying products.
Believe mobile wallets are useful in buying products than the traditional methods.
.614 .434 3.204 .015 14.138 .000 1.004 .408 .890 .472
Think that using online wallets can offer me a wider range of banking services and Payment options
.987 .322 .910 .460 26.591 .000 2.252 .066 1.919 .110
Interacting with mobile wallet is helpful.
2.758 .099 1.296 .275 89.375 .000 2.096 .084 .947 .439 Trust the service
providers of mobile wallet
.446 .505 1.826 .127 13.805 .000 3.399 .011 .550 .700
The result of ANOVA computation shows that no significant differences are perceived by male and female respondents for majority of attributes of digital payment mode/digital wallets. Hence, we accept the H01. This indicates that both male and female customer perceive digital payment mode/digital wallets in similar way. Similarly, we find that ANOVA computation shows that no significant differences are perceived by the respondents on the basis of age, profession and annual income. This leads to acceptance of H02, H04, and H05. However significant differences are perceived by respondents for majority of attributes of digital payment mode/digital wallets on the basis of their education. Hence, we reject the H03. This indicted that education play a significant role in acceptance of digital payment mode. Educated person are more inclined to use the digital payment modes.
FREQUENCY ANALYSIS
In order to find out respondent’s perception and the overall satisfaction, frequency analysis has been carried. The result is presented in the Tables 7 and 8. Highly important and important responses are agreement to the statement which lead to positive perception and slightly respondents and not important is negative agreement which indicate negative perception. Strongly agree and agree responses are the supporting responses of the statement related to a particular attribute of digital payment and indicates satisfaction of respondents whereas disagree and strongly disagree responses are those which do not support the
statement related to particular attribute and indicate no satisfaction. Neutral responses neither support nor oppose the attribute.
Table 7 - Frequency Analysis of Respondent’s Perception
Statement Highly
Important Important Moderately important
Slightly important
Not important
Brand loyalty 48 36 11 4 1
Convenience in usage 18 47 18 8 9
Secured transactions 52 35 9 3 1
Time Saving through
digital payment mode 75 13 6 4 2
Acceptance Wallet/digital
payment mode 20 50 17 8 5
Price of Using digital payment mode (service charges etc.)
03 47 22 7 2
Table 8 - Frequency Analysis of Respondents Satisfaction
Characteristics/Attributes Strongly
Agree Agree Moderate Disagree Strongly Disagree Mobile wallets are capable of providing
benefits to individual for purchase of product. 53 28 6 7 4 Using the mobile wallet improves the quality
of my decision making for buying products. 75 16 5 2 2
Believe mobile wallets are useful in buying
products than the traditional methods. 84 16 0 0 0
Think that using online wallets can offer me a wider range of banking services and Payment options
48 36 10 4 2
Interacting with mobile wallet is helpful. 88 12 0 0 0
Trust the service providers of mobile wallet 16 50 20 7 5 Majority of respondent said it is important or highly important to associate with brand, convenient in use, secured transactions, save time, acceptance of digital wallets at different stores and pricing of transaction (transaction cost, service fee etc.)
Majority of the respondents agree that mobile wallet/digital payment provides benefits to individual for purchase of products, improve the quality of decision, helpful in buying
products as compared to traditional methods, they offer a wide range of banking services and payment options. They also agree that interaction with mobile wallet is helpful and that they trust the service providers.
CONCLUSION
Digital payment system in India, has shown tremendous growth, but still has lot to be done to increase its usage. 24*7 service, time saving, convenience and security factors contribute to strengthen the digital payment system. Digital transactions and mobile wallets, with more secured features, reduced cost of managing and ease of transaction in digital payments are the probable developments in digital payments all over the world. There is a fewer problem for the public to use cashless digital methods at present. But the government’s efforts to create awareness, build trust, provide cyber security framework and necessary infrastructure will make it possible for faster acceptance among the public to adapt towards digital payment systems.The growth of users of Smartphone and internet penetration in such area also facilitated the adoption of digital payment.
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