dr. nirzar kulkarni, professor and dean (administration...

Digital payment system: a study on customer perception and concerns

Dr. Nirzar Kulkarni,

Professor and Dean (Administration)

Dr. Ambedkar Institute of Management Studies and Research,

Deekshabhoomi, VIP Road, Nagpur, India

Abstract:

The use of internet and phones is increasing marvellously in India. Digital India, one of

the Government initiatives has increased use of internet, mobile penetration and is

performing as facilitator which leads to sudden development in use of digital payment.

The payments made through internet banking, mobile banking, or any app are called as

digital payment. The perception of consumer matter a lot and it does affect the adoption

process of digital payment system. The study was conducted in Nagpur city. Stratified

random sampling method is used to select a sample from the eligible universe

population. The population is segregated in 5 stratas, and out of them West Nagpur was

selected out of convenience. The total numbers of household contacted were 170 and out

of these 157 were the valid responses collected. Other questionnaire was discarded since

the forms were not completely filled. Based on the data collected analysis was done

using “R” statistics and “SPSS”and conclusions were drawn.

Key words: Digital India, Digital payment, mobile penetration, use of internet and

Nagpur city.

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Introduction:

Internet marketing forms a division of electronic commerce. With the eruption of internet

growth, internet marketing has started becoming very popular. It is said that Internet

marketing first began in the beginning of 1990 with just text-based websites which offered

product information. With growth in internet, it is not just selling products alone, but in

addition to this, information about products, advertising space, software programs, auctions,

stock trading and internet payment also.

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Literature review:

1. Jim John Quilantang (2015) “Characterizing of internet banking users in Davao City

Philippines,” Univ. of Min. Intl. Mult. Res. Jour. vol. 1, no. 1, pp. 40-47. This study

was directed to control the features that effect the acceptance of internet banking in

Davao City. Survey questionnaires were managed to 120 respondents signified by two

groups, 60 users and 60 non-users. Four recognised variables, demographic profile of

respondents, professed utility, perceived ease-of-use, and belief of bank customers

towards banks are measured. Probit regression analysis exposed that age and income

have strong effect to internet banking acceptance. Efficacy and professed ease-of-use

were both originated also a strong cause of internet banking acceptance.

Conclusion: Founded on the study, age and income of bank customers in Davao City

have high impact on probability to accept internet banking in their banking trades.

Newer generation is more flexible to internet banking acceptance as associated to the

elder generation. In adding, greater level of income is more frequently related with

more volume of expenditures and banking trades. It is also worth observing that the

suitability concept have statistical effect to internet banking acceptance which means

that the internet banking system helpfulness to bank customers and easy-to-use

structures regulate their judgement whether to practice internet banking or not.

2. Roopali Batra, Neha Kalra, (2016) Are Digital Wallets The New Currency?, Apeejay

Journal of Management and Technology,Vol.11 ,No:1, This study aims to empirically

inspect the acceptance designs of digital wallets by the respondents. An exploration of

customer perception, usage pattern preferences and satisfaction level regarding digital

wallets is made based on a study of 52 respondents. It added classifies the hurdles and

encounters to the adoption of digital wallets. To attain the aforesaid purpose a well-

structured questionnaire was administered to respondents wherein they were asked

various with regards to adoption of digital wallets. The outcomes specify that there

happens a vast available market for digital wallets both in relations of growing

consciousness as well as its practise. Time saving and easiness of practise were found

to be the key details for using wallets. Though, safety of money managed continued to

remain the main concern. Safety matters in terms of distress of cash loss and lack of

usability for international trades are the main barriers to its acceptance. The study

makes a valued role to study in the domain of finance, by exploring digital payment

systems in India, a developing idea.

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Conclusion: This study marks a valued effect to study in the area of finance, by

travelling digital payment systems in India. However, seeing the currency of the area

of research and always growing chance sets, there still survives a lot of possibility for

research into the safety and security materials for its real approval. Other study could

discover in greater depth the association between the demographic variables like

income level, educational level, nature of job, marital status etc.

3. Shamsher Singh (2017), Study Of Consumer Perception Of Digital Payment Mode,

Journal of Internet Banking and Commerce, vol. 22, no. 3. This research was

commenced to study consumer perception built on the demographic factors such as

gender, age, profession and annual income of the patients and effect of education on

acceptance of digital payments.

Conclusion: Present study has made an effort to know customer perception about

digital payment. It was established that demographic factor but education does not

have much influence on the acceptance of the digital payment. This was proved with

the help of Anova which also supported this discovery as there was no signification

difference is perceived by the respondents on the basis of demographic variables. It

was only education level of the respondents where signification difference is

perceived by the respondents. It designates that acceptance of digital payment is

unfair by the education level of the customer. If a person has deliberates beyond

matriculation and internet savvy, he or she will be inclined to use the digital payment

mode. It was also found that in the areas/region where education level is high such as

Delhi NCR and other metropolitan area, the opportunity of receipt of digital payment

is much higher. The evolution of users of Smartphone and internet dispersion in such

area also simplified, the acceptance of digital payment.

4. Prasad Rajendra Byakod, Chaya U., Pooja Kulgude, Abhishek Sharma, Priyanka

Singh and Chandra Sen Mazumdar, A Study on Penetration of Digital Payment

System in Selected Areas of Rural Karnataka, UAS – JMC, Vol 04, Issue 02. This

study talked about the emergent variations of ICT (Information and Communications

Technology) dispersion and the impact of demonetization joined with the digital

creativities approved out for rural segments has better the requirement for refining

the trends of Digital Payment System (DPS) in rural Karnataka. This research studies

the current technical infrastructure and acceptance status of digital payment systems

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in Nelamangala and Bidadi regions of rural Karnataka. The variables that influence

the customers’ acceptance of electronic payment services were recognised.

Conclusion: For progress and growth with strong financial enhancement, certain vital

works like improved frankness, corporate administration and restraining the parallel

money founded economy is vital. Such developments could be possible with rural

India too greedy the computerized payment system and advanced exchanges. To

deliver an enlarged push to the acceptance of the DPS, the problems with respects to

usage of UPIs and portable wallets need to be improved safety of transactions

essential to be confirmed. This would ready more possible developments and better

acceptance of DPS in the rural areas.

5. Abdou Illia, (2015), A Conceptual Model For Mobile Banking Adoption, Journal of

Management Information and Decision Sciences Volume 18, Number 2, In this study,

the author has revisited the literature on mobile banking acceptance along with

pertinent theories from the areas of marketing and psychology in order to grow a

theoretical model that would have a possibly better clarification power. The future

model highlights the role of individual norms, technical willingness, trust, and

seeming dangerous form of users. The model is conversed along with the study

proposals it suggests. The theoretical and applied suggestions of the study are also

debated.

Conclusion: This research built on the limits of the TAM as a tool that does not arrest

key issues such as the danger and belief complex in mobile banking acceptance. It

suggests that skill willingness, which includes confidence, innovativeness, distress,

and uncertainty, will have through positive and negative influences on people’s belief

in mobile banking. It also differentiates between the two types of social effects

(personal norms and dangerous mass) related with technology acceptance in the

literature. Like preceding studies, this study considers the direct impact of

perceived critical mass on people’s intention to use mobile banking, but unlike

previous studies, the study introduced an secondary influence that professed serious

mass may also have through its contact with apparent practicality and apparent ease of

use. Though obvious preparations should expect empirical provision for the proposals,

the investigation model and the secondary literature propose some possible theoretical

and applied inferences. In precise, if it tries out to be decisive, the challenging of the

interface things of professed serious mass may offer some ground for financial

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institutes contribution mobile banking to re-enter their advertising exertion in a way

that may help extend their mobile banking customers’ base.

6. Akhil Thomas(2018), Consumer Perception of E-Payment Mechanism In Rural

Areas, International Journal for Research in Engineering Application & Management

(IJREAM) ISSN : 2454-9150 Vol-04, Issue-07, In order to study the understanding

of consumers to e payment in rural parts a structured questionnaire was circulated

among 120 respondents in Kallar Panchayat of Kerala, India. It was recognised that

the insight of consumers near e- payment is not prejudiced by gender, area of house

and job but as educational requirement rises people began to grow a positive outlook

towards electronic payment.

Conclusion: To determine, that the greatest of the respondent are reasonably

conscious about the e-payment techniques .The most of the respondents are inspired

with the factors of suitability, time savings, security etc. Most of the respondents

regardless of gender of their varied age group find e-payment more suitable and time

saving and they favour ATM, Debit card and Credit card the suitable mode of

payment. The suitability is a main factor which inspires customer prefer to e-payment.

It also established that the young customers are more prospective to make e-payment.

7. Dr. Chhavi Jain, Digital Payments and Demonetisation, IJRAR- International Journal

of Research and Analytical Reviews. This paper revises the influence of

demonetization on diverse age groups and payment manners. From the research it

came out that banks requirement to inauguration special digital promotion drivers for

people in order to make India - DIGITAL INDIA.

Conclusion: It will take some more time for people from age group 45-70 years in

knowledge or varying the old ways of payment only through cash. Banks can

introduce singular digital advertising programmes for people of this age group.

8. Arpita Pandey, Mr. Arjun Singh Rathore, (2018) Impact and Importance Of Digital

Payment In India, IJCRT, Conference on Recent Innovations in Emerging

Technology & Science, April 6-7, 2018, ISSN: 2320-2882 by JB Institute of

Technology, Dehradun & IJCRT, This research paper aims to study the effect and

reputation of digital payment in India. Discussing to the Government of India the

digital payment will flow the employment, cuts risk connected to cash like dishonesty,

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theft, and ringing or storing of big quantity of cash and made all dealings to be done

cashless or digitalised which helps the people to handover the money with safety and

security at high hustle. This stage of the Indian government even involved numerous

savers in the country. The influence of this policy is a stage to the transformation and

globalisation by making the economy cashless. In digital payment, banking sector

plays a main role by providing digital tools like debit cards, mobile banking, mobile

wallets etc. A main difficulty for the acceptance of this digital payment scheme in

India is deliberate internet connectivity and the extra cares over the digital dealings.

No substance India ongoing next digital payment rule over a year ago but still some of

the segments in India are still at the prevalence of cash transactions which is

temporary as a big obstacle for the economy to produce itself.

Conclusion: India government attractive all the stages and polices as digital India,

digitalization, demonetization, better infrastructure etc. hints to the growth of India.

So, Indian society should also aid government to accept these system and rules for

growth and progress of our nation. Even gradually and progressively alteration is

pleasing place but how much time it will take it cannot be refereed at this hour when

technology and digital payment marketplace has just on-going in the country.

Objectives of the study:

The only objective of this study is to identify whether the demographic profile of the

customer affects the usage of the digital payment system.

Universe of the study:

The population of this study consists of individuals who have access to the Internet

namely students, professionals, housewives, service class and businessmen from Nagpur

city.

The division of the Nagpur city according to zones is as follows:

1. North Nagpur – Koradi Road, KT Nagar, Sadar, HazariPahad, Godhni, Gorewada and

Zingabai Takli.

2. South Nagpur – Besa, Hanuman Nagar, Manewada, Sakkardara, Somalwada, Trimurti

Nagar, Pratapnagar, Narendra Nagar, Chinchbhavan.

3. East Nagpur - Nandanwan, Pardi, Surya Nagar, Wardhaman Nagar.

4. West Nagpur – Bajaj nagar, Laxminagar, Dharampeth, Ravi nagar, Shivajinagar,

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Amravati road, Jaitala, Swavalambinagar, Hingna road.

5. Central Nagpur – Central Avenue, Civil lines, Dhantoli, Mahal, Ramdaspeth,

Sitabuildi.

Procedure of selection of sample:

Stratified random sampling method is used to select a sample from the eligible universe

population. The population is segregated in 5 stratas, and out of them West Nagpur – Bajaj

nagar, Laxminagar, Dharampeth, Ravi nagar, Shivajinagar, Amravati road, Jaitala,

Swavalambinagar, Hingna road, was selected out of convenience.

The total numbers of household contacted were 170 and out of these 157 were the valid

responses collected. Other questionnaire were discarded since the forms were not completely

filled.

Test of hypothesis:

The testing of hypothesis is done by using “R”, SPSS and Excel.

Initially all the three analysis i.e Test of Homogeneity of Variance, Test of Normality and

Test for outliers were performed on the variable used for analysis namely, age, gender,

occupation, income, marital status and use of internet.

I) The result of Normality test using Shapiro-Wilk normality test, were as

under:

Normality Test Results in R

1) Age

Shapiro-Wilk normality test

data: Age

W = 0.85248, p-value = 2.892e-11

From the output, the p-value > 0.05 implying that the distribution of the data are not

significantly different from normal distribution. In other words, we can assume the normality.

2) Average time spent on internet


data: Average.time.spent.on.internet

W = 0.86731, p-value = 1.409e-10



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3) Gender


data: Gender

W = 0.62712, p-value < 2.2e-16



4) Marital Status


data: MaritalStatus

W = 0.53138, p-value < 2.2e-16



5) Monthly income


data: MonthlyIncome

W = 0.85918, p-value = 5.835e-11



6) Occupation


data: occupation

W = 0.87487, p-value = 3.304e-10



II) Test for calculating Homogeneity of variance using SPSS

1) Homogeneity of variance between Gender and average time spent on internet

Test of Homogeneity of Variances

Average time spent on internet

Levene

Statistic

df1 df2 Sig.

1.603 1 155 .207

We conclude that the variances are equal if “Sig.” > 0.05.

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2) Marital status and average time spent on internet



Levene

Statistic

df1 df2 Sig.

3.881 1 155 .051

We conclude that the variances are equal if “Sig.” = 0.05.

3) Age and average time spent on internet



Levene

Statistic

df1 df2 Sig.

81.554 3 153 .000

We conclude that the variances are not equal if “Sig.” < 0.05.

4) Occupation and average time spent on internet



Levene

Statistic

df1 df2 Sig.

16.838 3 153 .000

We conclude that the variances are not equal if “Sig.” < 0.05.

5) Income and average time spent on internet



Levene

Statistic

df1 df2 Sig.

.345 4 152 .847

We conclude that the variances are not equal if “Sig.” > 0.05.

III) Internal consistency using Cronbach’s alpha in SPSS

Reliability Statistics

Cronbach's

Alpha

Cronbach's

Alpha Based on

Standardized

Items

N of Items

.733 .429 6

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IV) Validity of the variables using Co-relation in SPSS

Test of validity of the variables used for analysis is done by using SPSS, it is calculated by

correlating each variable of the questionnaire scores with the total score. Variable by

variable questionnaire which are significantly correlated with the total scores of the variables

shows that the variables are valid. In this case based on the significant value obtained by

Sig.(2-tailed) of 0.000 < 0.05 so it can be concluded that the variables are valid.

V) Outliers

SPSS analysis was used to identify the outliers in all the six variables, after applying the test

it was observed that only one variable “actively using Internet” was having two outliers

which were replaced by the mean value of the variable and once again the normality test was

performed and the results were as under:


data: diff.Age...actively.using.internet

W = 0.83624, p-value = 5.74e-12

Wherein it was identified that, the p-value > 0.05 implying that the distribution of the data are

not significantly different from normal distribution. In other words, we can assume the

normality.

Since for the variables Age, Occupation and Income the variances are not equal we can use

Wilcoxon signed rank test and in case of gender the variances are equal so we can use Paired

sample t-test.

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H01: there is no significant impact of customers age on usage of digital payments.

The variables considered in this case were Age: as independent variable, actively using

Internet: dependent variable.

In this case variable age was not having equal variance so Wilcoxon signed rank test with

continuity correction was applied.

data: Age and actively.using.Internet

V = 780, p-value < 2.2e-16

alternative hypothesis: true location shift is not equal to 0

Interpretation:

At .05 significance level, we conclude that there is a significant impact of customers age on

usage of digital payments.

H02: There is no significant impact of customers occupation on usage of digital payments.

The variables considered in this case were Occupation: as independent variable, actively

using Internet: dependent variable.

Wilcoxon signed rank test with continuity correction

data: occupation and actively.using.Internet

V = 1624, p-value = 0.000000008357


Interpretation:

At .05 significance level, we conclude that there is a significant impact of customers

occupation on usage of digital payments.

H03: There is no significant impact of customers income on usage of digital payments.

The variables considered in this case were Income: as independent variable, actively using


Wilcoxon signed rank test with continuity correction

data: MonthlyIncome and actively.using.Internet

V = 2338, p-value = 0.0000002418


Interpretation:

At .05 significance level, we conclude that there is a significant impact of customers income

on usage of digital payments.

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H04: There is no significant impact of customer’s gender on usage of digital payments.

Paired t-test

The variables considered in this case were gender: as independent variable, actively using


data: Gender and actively.using.Internet

t = -13.443, df = 156, p-value < 2.2e-16

alternative hypothesis: true difference in means is not equal to 0

95 percent confidence interval:

-2.871005 -2.135365

sample estimates:

mean of the differences

-2.503185

The p-value of the test is 2.2e-16which is less than the significance level alpha = 0.05. We

can then reject null hypothesis and accept alternate hypothesis that there is a significant

impact of customers gender on usage of digital payments.

Overall conclusion:

Digital payment aids India in every sector by giving safety and security relative to cash and

likewise by preceding the lifestyle by acceptance of newest know-hows for globalization and

transformation of our country which hints to the growth. All the stages and rules formation by

government of India aids Indian society to get knowledge and cognizance. All the national or

multinational company should encourage the customers from all demographic profiles to use

digital payment modes which are safe as well as convenient.

With respect to the actively usage of internet for digital payments is concern it is affected by

the demographic profile of the customers, and this is also supported by the literature review

done for this research paper.

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