“FUNCTIONAL ANALYSIS OF DIGITAL PAYMENT”

A PROJECT SUBMITTED INPARTIAL FULFILMENT FOR THE

AWARD OF THE DEGREE OF
MASTER IN MANAGEMENT STUDIES
(UNDER UNIVERSITY OF MUMBAI)

Submitted by:
SEJAL MEHROTRA
(M1820049)

Under The Guidance of

Associate Professor Sushil Kumar Pare

(2018-20)

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 CERTIFICATE

This is to certify that the Project titled, is successfully completed by Ms. Sejal Mehrotra during
the IV semester, in partial fulfilment of the Master’s Degree in Management Studies recognized
by the University of Mumbai for the academic year 2018-20 through Thakur Institute of
Management Studies & Research, Mumbai. This project work is original and not submitted earlier
for the award of any degree/diploma or association of any other university/institution.

Name of the guide: Associate Professor Sushil Kumar Pare

Signature of Guide:

I/c Director: Dr. Pankaj Natu

Signature:

Date:

Place: Mumbai

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 DECLARATION

I hereby declare that this Project Report titled “FUNCTIONAL ANALYSIS OF DIGITAL
PAYMENT” submitted by me to the University of Mumbai through Thakur Institute of Management
Studies & Research, Mumbai is a bonafide work undertaken by me and it is not submitted to any other
university or institution for the award of any degree/diploma/certificate or published any time before.

Date:

Place:

Name: Sejal Mehrotra

Roll No: M1820049

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 ACKNOWLEDGEMENT

I am glad to express my profound sentiments of gratitude to all who rendered their valuable help for the
successful completion of this project report titled, “FUNCTIONAL ANALYSIS OF DIGITAL
PAYMENT” I record my deep sense of gratitude that have given me a chance to work upon such a
project. I would also like to thank sincerely from the depth of my heart to all those persons who have
constantly guided me and gave me the practical knowledge and materials of the subject.

My genuine sense of gratitude goes to my university that gave me a chance to brighten my

academic qualification that provided me this opportunity to have a practical knowledge of
relevant fields.

Finally, I would express my heartfelt gratitude to my academic mentor, Prof. Sushil Kumar Pare
whose perspectives have encouraged me to incorporate a different dimension to the project.

Sejal Mehrotra

Email: [email protected]

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 EXECUTIVE SUMMARY

This project aims on studying the consumer behavior towards Digital Payment. To build
the case for e-payments, this report explores the current inefficiencies in government payments
systems and quantifies the potential financial and strategic benefits of making government
payment flows electronic. The improved efficiency and greater penetration of a digital payment
setup will likely encourage greater participation from poor rural citizens, and bring the central
government closer to its cherished goal of reducing poverty and hunger through its welfare, food,
and housing subsidy schemes.

Advances in technology and new business models have provided them with a powerful
tool-an electronic payment or ‘e-payment’ system known as digital payment. Digital payment may
well ensure that every poor household in India- approximately 80 to 100 million will have
unparalleled access to secure and convenient benefits directly from the government, and without
the interference of intermediaries. A digital payment infrastructure allows greater penetration into
the heart of rural India, where traditional payment systems remain inadequate in terms of
reliability, convenience, and accessibility.

By using digital payment method one can have direct and indirect benefits such as
improved delivery of government services, and reduced corruption, potential increases in
utilization of government services, increase in per capita income of poor households by 15 to 20%.
This stage of connectivity is driving digital payments transformation – the migration of cash
payments made over digital channels, either from dematerialized cards held on digital wallets or
in the cloud, or from new digital payments mechanisms.

Consumers rapid adoption of these devices to manage their daily lives- ranging from
reading books, to sending emails, to checking Facebook, to navigating the streets has taken many
organizations by surprise. Whereas, some months ago mobile and digital were components of a
typical strategy, now they are the strategy, and at the heart of business transformation.

In commerce and in banking, payments are at the forefront and center of the digital
migration, reflecting their key role as the source of mass transactions for digital processes and the
mechanism through which consumers interact on a daily basis with their bank with retailers.

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 TABLE OF CONTENT

Sr.no Particulars Page

No.

1 Introduction 7

2 Literature Review 26

3 Research and Methodology 31

4 Consolidated Results 51

5 Conclusion 53

6 References 54

7 Annexure 55

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 CHAPTER 1. INTRODUCTION TO DIGITAL PAYMENT

Digital payments refer to electronic consumer transactions, which include payments for goods and
services that are made over the internet, mobile payments at point-of-sale (PoS) via smart phone
applications (apps), and peer-to-peer transfers between private users.

Digital payment is a way of payment which is made through digital modes. In digital payments,
payer and payee both use digital modes to send and receive money. It is also called electronic
payment. No hard cash is involved in the digital payments. All the transactions in digital payments
are completed online. It is an instant and convenient way to make payments.

If we talk about cash payments, you have to first withdraw cash from your account. Then you use
this cash to pay at shops. Shopkeeper goes to the bank to deposit the cash which he got from you.
This process is time-consuming for you and also for the shopkeeper. But in digital payments, the
money transfers from your account to the shopkeeper’s account immediately. This process is
automatic and neither you nor the shopkeeper is required to visit the bank.

Digital payment methods are often easy to make, more convenient and provide customers the
flexibility to make payments from anywhere and at any time. These are a good alternative to
traditional methods of payment and speeding up transaction cycles. Post demonetization, people
slowly started embracing digital payments and even small time merchants and shop owners started
accepting payments through the digital mode.

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 ADVANTAGES OF ONLINE PAYMENTS

In the Age of High Technology cash strives to endure the competition with electronic money,
because more and more people prefer to have virtual wallets. It is clear, electronic payment systems
have a range of pros in comparison to traditional banking services:

1. Time savings
Money transfer between virtual accounts usually takes a few minutes, while a wire transfer
or a postal one may take several days. Also, you will not waste your time waiting in lines
at a bank or post office.
2. Expenses control
Even if someone is eager to bring his disbursements under control, it is necessary to be
patient enough to write down all the petty expenses, which often takes a large part of the
total amount of disbursements. The virtual account contains the history of all transactions
indicating the store and the amount you spent. And you can check it anytime you want.
This advantage of electronic payment system is pretty important in this case.
3. Reduced risk of loss and theft
You cannot forget your virtual wallet somewhere and it cannot be taken away by robbers.
Although in cyberspace there are many scammers.
4. Low commissions

If you pay for internet service provider or a mobile account replenishment through the UPT
(unattended payment terminal), you will encounter high fees. As for the electronic payment
system: a fee of this kind of operations consists of 1% of the total amount, and this is a
considerable advantage.
5. User-friendly
Usually every service is designed to reach the widest possible audience, so it has the intuitively

understandable user interface. In addition, there is always the opportunity to submit a question

to a support team, which often works 24/7. Any way you can always get an answer using the

forums on the subject.

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 DISADVANTAGES OF ONLINE PAYMENTS

1. Restrictions

Each payment system has its limits regarding the maximum amount in the account, the number of
transactions per day and the amount of output.

2. The risk of being hacked

If you follow the security rules the threat is minimal, it can be compared to the risk of something
like a robbery. The worse situation when the system of processing company has been broken,
because it leads to the leak of personal data on cards and its owners. Even if the electronic payment
system does not launch plastic cards, it can be involved in scandals regarding the Identity theft.

3. The problem of transferring money between different payment systems

Usually the majority of electronic payment systems do not cooperate with each other. In this case,
you have to use the services of e-currency exchange, and it can be time-consuming if you still do
not have a trusted service for this purpose.

4. The lack of anonymity

The information about all the transactions, including the amount, time and recipient are stored in
the database of the payment system. And it means the intelligence agency has an access to this
information. You should decide whether it's bad or good. In general, the advantages of electronic
payment system outweigh its disadvantages and they have bigger opportunities comparing with
ones of traditional wire transfers.

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 1.2 INTRODUCTION TO INDIAN DIGITAL PAYMENT SECTOR

Payment and settlement systems in India are covered by the Payment and Settlement Systems Act,
2007 (PSS Act), legislated in December 2007 and regulated by the Reserve Bank of India and
the Board for Regulation and Supervision of Payment and Settlement Systems.
India has multiple payments and settlement systems, both gross and net settlement systems. For
gross settlement India has a Real Time Gross Settlement (RTGS) system called by the same name
and net settlement systems include Electronic Clearing Services (ECS Credit), Electronic Clearing
Services (ECS Debit), credit cards, debit cards, the National Electronic Fund Transfer (NEFT)
system and Immediate Payment Service.

In the case of India, the RBI has played a pivotal role in facilitating e-payments by making it
compulsory for banks to route high value transactions through Real Time Gross
Settlement (RTGS) and also by introducing NEFT (National Electronic Funds Transfer) and
NECS (National Electronic Clearing Services). Behavioral patterns of Indian customers are also
likely to be influenced by their internet accessibility and usage, which currently is about 32 million
PC users, 68% of whom have access to the net. However, these statistical indications are far from
the reality where customers still prefer to pay "in line" rather than online, with 63% payments still
being made in cash. E-payments have to be continuously promoted showing consumers the various
routes through which they can make these payments like ATM’s, the internet, mobile phones and
drop boxes. Due to the efforts of the RBI and the (BPSS) now over 75% of all transaction volume
are in the electronic mode, including both large-value and retail payments. Out of this 75%, 98%
come from the RTGS (large-value payments) whereas a meager 2% come from retail payments. In
line with government reforms, Prime Minister Narendra Modi has pushed Indians to adopt cashless
transactions, giving the digital payments sector a significant boost.
The Digital India programme is a flagship programme of the Government of India with a vision to
transform India into a digitally empowered society and knowledge economy. “Faceless, Paperless,
Cashless” is one of professed role of Digital India. The sector is experiencing an unprecedented
jump in growth, when the government demonetized high currency bills (Rs 500 and 1000) – which
represented 86 percent of India’s cash in circulation. By February this year, digital wallet
companies had shown a growth of 271 percent for a total value of US$2.8 billion (Rs 191
crore).Prior to the sudden developments in 2016 enabling the massive disruption in India’s
payments landscape, a Google-BCG Report estimated that India’s digital payments industry would

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grow to US$500 billion by 2020, contributing to 15 percent of the country’s GDP. An important
driver of this growth is India’s vast smart phone user base – the second largest in the world. Online
Travel Aggregators, movie and event booking portals and entertainment industry, together form a
major part of the digital payments industry in India, contributing to almost 40%. The rest comes
from utility bills and financial services segments.
The ongoing spread of the COVID-19 has become one of the biggest threats to the global
economy and financial markets. While some sectors that were directly hit by the COVID-19
outbreak have pulled down the usage of the digital payment, some new sectors have also
emerged. Segments that are expected to adversely impact digital payments in India due to
COVID-19 include Airlines, Travel/Tourism, Hospitality, Retail, Theatres, Restaurants, Clubs
and Entertainment Parks. Whereas sectors that will boost digital payments include small grocery
stores, online money transfer, OTT, online gaming, online education, and broadband usage. The
government has asked banks to encourage their customers to use digital payment methods as a
precautionary measure against the Coronavirus outbreak.

In light of recent events, NPCI has also started a campaign called ‘India pay safe’ in order to
boost digital payments since exchanging cash could spread Coronavirus. Several other digital
payment players such as PhonePe and Amazon Payments also showed their support for this
move. Further, cross-border payments, be they B2B or C2B, have significantly declined owing to
the temporary shutting down of borders further, resulting in restricted movement of goods.
International remittances too have been affected and have reduced. Digital payments, once a
convenience, have become a necessity in these times. With a majority of the sectors that
contribute to digital payments still in a state of flux, it is too early to ascertain the long-term
impact of COVID-19 on digital payments. The virus has the ability to survive on a number of
surfaces including paper, metal, plastic and cardboard, thus increasing the risk of transmission by
handling cash. This has driven people to switch to digital payments for their day-to-day
transactions. Over the recent years, the fin-tech industry in India, particularly the digital
payments segment has grown leaps and bounds. According to industry experts, the digital
payments sector in India is expected to become a USD 1 trillion market by 2023. The virus
outbreak has only increased the adoption of digital payments across the country. The Reserve
Bank of India has urged people to switch to digital payments in order to limit people’s visits to
ATMs and their exposure to the virus.

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 DIGITAL PAYMENT DIVISION

The Digital India programme is a flagship programme of the Government of India with a vision to
transform India into a digitally empowered society and knowledge economy. “Faceless, Paperless,
Cashless” is one of professed role of Digital India. Promotion of digital payments has been
accorded highest priority by the Government of India to bring each and every segment of our
country under the formal fold of digital payment services. The Vision is to provide facility of
seamless digital payment to all citizens of India in a convenient, easy, affordable, quick and
secured manner.
Hon’ble Finance Minister, in his budget speech announced several activities for the promotion of
digital payments including setting a target of 2,500 crore digital payment transactions in FY 2017-
18, through Unified Payments Interface (UPI), Unstructured Supplementary Service Data (USSD),
Aadhaar Pay, Immediate Payment Service (IMPS) and Debit Cards.
Ministry of Electronics & Information Technology (MeitY) has been entrusted with the
responsibility of leading this initiative on “Promotion of Digital Transactions including Digital
Payments”. MeitY is working on various strategies, ideation with multiple stakeholders including
Banks, Central Ministries/Departments and States, to create an ecosystem to enable digital
payments across the country.
MeitY is working on strengthening of Digital Payment infrastructure and creating awareness
through promotions of digital payments with all the stakeholders to achieve Government’s vision
of making citizens of this country digitally empowered. Citizens have been provided multiple
options to make digital transactions. Citizens have been provided multiple options to make digital
transactions. A dedicated ‘Digidhan Mission’ has been setup in MeitY for building strategies and
approaches in collaboration with all stakeholders.
Training and workshops on digital payments awareness with several Ministries have been
conducted and planned; MoRTH, MoHFW, Ministry of Agriculture, MSME, Department of Post,
Ministry of Power, Panchayti Raj, Ministry of Defense. Digital Payment dash board has been
created to track and monitor the progress of digital transactions achieved by Banks.

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 MAJOR NEW DIGITAL PAYMENT MODES IN INDIA

Online or mobile wallets

• Online wallets are used via the internet and through smart phone applications. Money can
be stored on the app via recharge by debit or credit cards or net banking.

• Consumer wallet limit is US$ 311 (Rs 20,000) per month or US$1,554 (Rs 100,000) per
month after KYC. The merchant wallet limit is US$777 (Rs 50,000) per month after self-
declaration and US$1,554 (Rs 100,000) after KYC verification. Facilitates P2P fund
transfers.

Prepaid credit cards

• Pre-loaded to individual’s bank account. It is similar to a gift card; customers can make
purchases using funds available on the card – and not on borrowed credit from the bank.
Can be recharged like a mobile phone recharge, up to a prescribed limit.

• Closed-loop prepaid cards are the ones that can only be redeemed at the merchant who
issued them. On the other hand, “semi-closed loop cards” or “restricted open-loop cards”
are similar to shopping centre cards that can be redeemed at various merchants but only
inside the shopping centre. These cards can be swiped/inserted on the PoS terminal for top-
up/withdrawal purposes.

Debit/RuPay cards

• These are linked to an individual’s bank account. Can be used at shops, ATMs, online
wallets, micro-ATMs, and for e-commerce purchases. Debit cards have overtaken credit
cards in India. In December 2015, there were more than 630 million debit cards as
compared to 22.75 million credit cards.

• Of a total 290 million debit cards, about 244 million RuPay debit cards came from public
sector banks under the Indian government's financial plan as of April 2020. About eleven
million were issued under the private sector during the same time period.

• RuPay has also tied-up with international players like Discover, Japan Credit Bureau and
China Union Pay to enhance its international acceptance and recently achieved a milestone

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 of issuing 25 million RuPay – Discover global cards.

• The RuPay card was officially launched in the UAE on August 24, 2019 at the Emirates
Palace, Abu Dhabi in presence of Indian Prime Minister Narendra Modi. The RuPay card
was officially launched in the UAE on August 24, 2019 at the Emirates Palace, Abu
Dhabi in presence of Indian Prime Minister Narendra Modi. This initiative will go a long
way in bringing India and UAE businesses together. Acceptance of Rupay card in UAE
will lower the charges as tourists will save on exchange rate.

AEPS

• The Aadhaar Enabled Payment System uses the 12-digit unique Aadhaar identification
number to allow bank-to-bank transactions at PoS

• AEPS services include balance enquiry, cash withdrawal, cash deposit, and Aadhaar to
Aadhaar fund transfers.

USSD

• Stands for Unstructured Supplementary Service Data based mobile banking.

• It allows users without a smartphone or data/internet connection to use mobile banking

through the *99# code.
• The main objective of the innovative *99# payments service is to allow financial
inclusion of the underbanked and economically weaker sections of the society, and
integrate them into mainstream banking. In an effort to make this service accessible to all,
the service is available in 12 languages, including English and other Indian languages
such as Hindi, Tamil, Bengali, and Kannada, to name a few.

• Linked to merchant’s bank account and used via mobile phone on GSM network for
payments up to US$77.68 (Rs 5,000) per day per customer.

UPI

• The United Payments Interface (UPI) envisages being a system that powers multiple bank
accounts onto a single mobile application platform (of any participating bank). Merges
multiple banking features, ensures seamless fund routing, and merchant payments.
Facilitates P2P fund transfers. UPI was developed by National Payments Corporation of

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 India (NPCI).

• When a customer requests UPI payment mode, the merchant needs to select the “UPI
payment” option on his PoS terminal and input the bill amount. This will generate a
dynamic QR code on the PoS screen, which can now be scanned by any mobile-based UPI
app being used by the customer.

• The number of transactions via UPI continues to rise, hitting 1.3 billion transactions in
December 2019, according to NPCI data.

QR Code

• Quick Response Code-based payments are gaining popularity in modern payment apps
and devices. One can simply scan a QR code to pay for fuel, grocery, utility bills, fuel,
food, travel and several other services.
• QR codes can be scanned both from paper and screen, facilitating instant payments and
fool-proof security. When a customer requests to pay via QR, the merchant needs to
select the “QR Code” payment option on the terminal and input the bill amount. This will
generate a dynamic QR code on the PoS screen which can now be scanned by any
mobile-based QR app being used by the customer.
• If a merchant cannot invest in a PoS Terminal, he/she can use the mobile-based QR app
to generate static/dynamic QRs. QR reduces transaction errors and the need to input any
transaction-related data.

Payment Gateway
• Payment gateway, a merchant service provided by an e-commerce platform, ensures that
sensitive information, such as credit card numbers, entered into a virtual terminal or on an
E-commerce website, is passed securely through various channels.
• Amid Covid-19 outbreak when people are being encouraged to maintain social distance,
there has been an increase in orders placed on e-commerce websites and apps for grocery,
entertainment and food. A person availing any such services on e-commerce platforms
can opt to pay through a payment gateway.

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1.3 ECONOMIC ANALYSIS
➢ It is estimated that the total digital payment market in India will grow to USD 1 trillion by
FY23E led by the growth in mobile payments. It said that in just four months of launching
its payments app, Google is already processing the same number of digital transactions as
Axis Bank (4th highest among banks in India) and has resulted in unified payment interface
(UPI) transactions increasing about eight times.

➢ The digital payments further explode when the most popular application in India,
WhatsApp integrated a payments button. WhatsApp Pay was launched in February 2018
in India as part of a trial run. Payments through WhatsApp were introduced to a million
users under a partnership with ICICI Bank. On February 7, 2020, the messaging app
received NPCI's approval to roll out its digital payment service in a phased manner. In the
first phase, WhatsApp offered payment services to 10 million users in the country.

➢ Payment integration in to popular apps in India will drive the digital payment market in
India to USD 1 trillion over the next five years. Digital payments in India are soaring on
the back of the entry of global tech giants that are acting as aggregators for retail
transactions. The report by research analysts Ashish Gupta, Sunil Tirumalai, Kush Shah,
Anurag Mantry and Viral Shah cited trend of digital payments in China as example.
Digital payments in China leapfrogged to over USD 5 trillion in the past four years on the
back of rising mobile and data penetration.
➢ Data usage for 300 million Indian smart phone users has jumped to 5-10 GB per month
from 1GB. The surge in digital payments in China was triggered by its integration into e-
commerce and social platforms, which now have a 95 per cent market share. Unlike China,
mobile payments in India are being built on public infrastructure like UPI and Aadhaar that
allow open-architecture and an inter-operable payment system to evolve.

➢ With 800 million bank accounts now linked to mobile, existing bank accounts should be
mobile-transaction ready. The top four banks (SBI, HDFC Bank, ICICI, Axis) are better
placed as the aggregators are expected to look to tie up with these franchises, given they
account for about 50-70 per cent of non-cash transactions. The Credit Suisse report said
that there is also no loss of customers for the banks even as they transact on the platforms
of these aggregators, and the banks would gain access to customer data.

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CHALLENGES FACED BY THE DIGITAL PAYMENTS SECTOR IN
INDIA

RBI Governor Raghuram Rajan has said that PBs will “revolutionize” in India, without posing a
competitive threat to existing banks. And the decision to grant licenses to one in four applicants
represents a pretty unusual degree of latitude from the central bank. Further, the RBI has stated
that the entities that didn’t receive approval this time (along with many others) could be accepted
in future licensing rounds, as it intends to grant more licenses "virtually on tap." So the government
clearly views PBs as a powerful weapon in its financial inclusion arsenal.

But the impact of these banks is not guaranteed, and they will face the same hurdles as any financial
services provider that aims to serve the country’s low-income, rural communities. If it were simple
to serve these customers, India’s previous Business Correspondent efforts – not to mention its
experience with private services like M-PESA, which captures almost every payment in countries
like Kenya and Tanzania – would have met with more resounding success. Let’s take a look at 10
challenges PBs will face – and how they can live up to the government’s ambitious goals.

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FINDING THE RIGHT LEADERSHIP

The Payments Bank concept is perhaps the first of its kind anywhere in the world – a hybrid of
banking and distribution with a running thread of technology. Thus far, business leaders from the
fast-moving consumer goods and technology sectors have led teams in the payments space in India.
But with payments now married to banking – a granular business of managing distribution points
prudentially – it will be critical to have the right set of skills steering PBs’ efforts. Without the
right mix of people, they may become a juggernaut hurtling towards failure.

DESIGNING THE RIGHT PRODUCTS

Remittances generate profits – indeed, India’s Business Correspondent initiative survived largely
because banks outsourced remittance services to them. But because of these competing services,
PBs will need to explore a “remittance plus” model, creating a differentiation between themselves
and existing Business Correspondents. This essentially means investing heavily in customer-
centric product design, thus capturing face-to-face and remote transactions by offering innovative
products delivered via mobile phone.

MOVING BEYOND CASH IN/CASH OUT

How well a PB is positioned with its network of cash-in/out points or low-cost and tech-heavy
branches will undoubtedly determine its initial footprint in the hinterlands. But cash-in/out alone
will not be enough, as these banks’ sustainability and scale will ultimately depend on customers’
adoption of digital cash for making transactions. Just cash-in/out services and no (or negligible)
transactions would result in inactive digital accounts, whereas PBs’ whole value proposition is
based on developing a revenue model around actual payment transactions. Critical drivers,
therefore, lie in PBs’ ability to leverage the e-commerce ecosystem in India, which slated to cross
the USD $16 billion mark in the end of 2015.

PULLING CUSTOMERS OUT OF ‘CASH IN KING’ MENTALITY

The challenge of moving toward e-payments isn’t limited to infrastructure, For PBs to
succeed, cash-obsessed Indians will need to migrate to digital alternatives, which will require
behavioral changes above and beyond technological hurdles. Though a few e-wallet players and
online marketplace providers like Paytm, Foodpanda, Shopclues, etc., have been experimenting in
this space in recent years – albeit mainly in urban centers’ – for PBs, the task will be herculean.

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Ultimately, they will need a concerted ecosystem effort and additional policy support to spur the
growth of interlinkages and missing markets.

SHIFTING INTERACTIONS TO ATMS AND MOBILE

According to the World Bank, just 39 percent of all account holders in India own a debit or ATM
card, and as mentioned, mobile banking has struggled to take off in rural areas. Yet compared to
branch banking, ATM and especially mobile banking are far less expensive per transaction, not to
mention more convenient for customers. PBs have a great potential to change the patterns of
interactions between customers and banks by making banking transactions via ATMs and mobile
phones self-assisted, seamless, convenient and foolproof over the payments-based architecture in
India.

ENABLING PAYMENTS ECOSYSTEM PARTNERSHIPS

Effective partnerships will be crucial for running a digital payments system – particularly at
cash-in/out points and merchant/retail points. Facilitating these relationships is often the role of
special intermediary services providers like Pep Intermediacy in Kenya and Uganda, which
manages float and distribution points for major supermarkets and players like Airtel, M-PESA
and KCB Mattani Bank, and Kopo-Kopo, which helps to manage the merchant ecosystem in
Kenya. India will need to put similar service providers in place to make PBs’ partnerships
successful.

AVOIDING THE GOVERNMENT BUSINESS TRAP

Government business, in the form of government to person (G2P) payments, may seem like low-
hanging fruit to many PBs. But they should resist the temptation to make G2P services a core part
of their business case, or else they’ll run the risk of encountering the same sustainability challenges
that Business Correspondents have faced in the past in India. With government commissions for
G2P services subject to frequent and unpredictable decreases, depending on government business
could bring the sustainability of PBs into question.

WORKING WITH REGULATORS

PBs will have to comply with RBI regulations and prudential banking norms, maintaining
prescribed bank ratios like statutory liquidity, cash reserve and capital adequacy, and following
rules involving financial fraud, Anti Money Laundering & Combating Financial Terrorism (AML-

19
CFT), etc. And the need to comply with these regulations is one of the factors that many analysts
blame for mobile money’s struggles in India, which has required mobile money players like
Vodafone and Airtel to work through partner banks to offer payment services. With the important
role PBs play in the government’s financial inclusion drive, and the degree to which the RBI is
clearly invested in their success, hopefully it will ensure that these requirements won’t decelerate
PBs’ momentum.

EMBRACING THE RISK AND INNOVATION

PBs’ success in India will largely depend upon how well they are able to break the traditional
banking mentality and innovate. For instance, India’s banks particularly those in the public sector
– have often heavily invested in government securities and bonds, as these instruments are
perceived to be safer than credit-market investments. But with Prime Minister Modi calling upon
Indian bankers to take a more proactive approach to banking, it’s clear that PBs must avoid this
lazy and risk-averse mindset and embrace new thinking and innovation. Even though they may not
have the option right now of offering credit products, PBs should embrace a forward-looking
mindset in exploring payments innovations – and even eventually offering credit services directly
or in partnerships.

LOCATING PATIENT CAPITAL

Even though they are allowed to raise deposits, this may not be sufficient for PBs to fund their
expansion. And with cutthroat competition, acquiring customers will be a substantial challenge –
as will maximizing revenue per customer. So the PB industry will need deep-pocketed, risk-taking
investors – and they must be in it for the long term. The mere fact that the RBI issued so many
initial licenses clearly indicates that not all are expected to stay alive. So investors must be willing
to remain patient, at least for three years (or until they attain a net worth of USD $80 million), at
which point PBs will be allowed to have an IPO and get listed on the Indian Stock Exchange.

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 SECURITY ISSUES IN DIGITAL PAYMENT

Concerns around the security of transactions and identity theft still prevent thousands from moving
over to the digital payment platforms. Security concerns remain their biggest worry. A cultural
and mindset change is required to bring people on board and make them feel comfortable with
digital payments. Experts insist digital payments platforms are fully secure provided the necessary
precautions are taken by the user. Cash can get stolen and you will have to bear the loss. However,
if there is a fraud related to your debit/credit card then you have a recourse. As per regulatory
guidelines, the banks will investigate the case when you report a fraud and you will get
compensated in case it's not because of lapses on your part.

However, the existing machinery for protection of consumers requires a huge revamp before
consumers become comfortable with digital payments. As more and more digital transactions
move into the yet unregulated fintech space, proper fraud prevention, including device
fingerprinting and consumer protection mechanisms, needs to be put in place. There is a definite
need to improve the quality of the safeguards. However, service providers are taking steps for
added protection. Freecharge, for instance, launched an e-wallet protection plan (at no added cost)
for all its users, where the underlying wallet balance of all the customers is insured up to a limit of
Rs 20,000, as long as the user is transacting at least once a month. Other e-wallet platforms are
also expected to follow suit.

Almost half of the Indian consumers (around 47 per cent) from the tier 1 cities are concerned about
digital payments fraud now more than they were when the coronavirus first emerged, according to

a new study conducted by YouGov and ACI, 75 per cent recognize one-time password (OTP) as

a key anti-fraud mechanism deployed by their bank. While 66 per cent utilize SMS/email
notifications on their phone. And, around 55 per cent are aware of two-factor authentication as a
security measure.

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 ROLE OF THE RBI IN ENCOURAGING E-PAYMENTS

As the apex financial and regulatory institution in the country it is compulsory for the RBI to
ensure that the payments system in the country is as technologically advanced as possible and in
view of this aim, the RBI has taken several initiatives to strengthen the e-payments system in India
and encourage people to adopt it. The interface has been developed by National Payments
Corporation of India (NPCI), the umbrella organization for all retail payments in the country. The
UPI seeks to make money transfers easy, quick and hassle free.

• The Payment and Settlement Systems Act, 2007 was a major step in this direction. It
enables the RBI to "regulate, supervise and lay down policies involving payment and
settlement space in India." Apart from some basic instructions to banks as to the personal
and confidential nature of customer payments, supervising the timely payment and
settlement of all transactions, the RBI has actively encouraged all banks and consumers to
embrace e-payments.
• In pursuit of the above-mentioned goal the RBI has granted NBFC’s (Non-Banking
Financial Companies) the permission to issue co-branded credit cards forming partnerships
with commercial banks.
• The Kisan Credit Card Scheme was launched by NABARD in order to meet the credit
needs of farmers, so that they can be free of paper money hassles and use only plastic
money.
• A domestic card scheme known as RuPay has been started by the National Payments
Corporation of India (NPCI),promoted by RBI and Indian Banks Association (IBA),
inspired by Unionpay in China, which promoted the use of cards ie. "Plastic money".
Initially functioning as an NPO, RuPay focused on potential customers from rural and
semi-urban areas of India. RuPay have a much wider coverage than Visa, MasterCard or
American Express cards which have always been used for card-based settlements.
• The NREGA (National Rural Employment Guarantee Scheme) introduced by the
Government ensured rural employment in turn ensuring that the employees get wages.
Each employee has a smart card functioning as his personal identification card, driver’s

22
 license, credit card which also function as an electronic pass book, thus familiarizing the
rural populations with e-payments.
• However, the Indian banking system suffers from some defects due to certain socio-cultural
factors which hampers the spread of the e-payments culture even though there are many
effective electronic payment channels and systems in place. Despite the infrastructure
being there nearly 63% of all payments are still made in cash. A relatively small percentage
of the population pays their bills electronically and most of that population is from urban
India-the metropolitans.
• RBI has a NUE plan for digital payment players it has taken yet another step towards
opening the mandate of issuing and operating of new retail payment channels to private
sector players. A draft framework detailing the eligibility and governance criteria of the
proposed ‘new umbrella entities’ (NUE) along with scope of activities has now been
issued by the central bank for public scrutiny. The banking regulator believes, has been
necessitated for the prevention of “concentration risk” in India’s burgeoning digital
payment landscape where the mandate of issuing and governing payment channels is
largely monopolised by the National Payments Corporation of India (NPCI).
As per the current proposed guidelines, only those entities with at least three years of
experience operating as payment operator or service providers can apply as a promoter
group. Furthermore, these entities can either be ‘for profit’ or be registered under the
Section 8 of Companies Act as a non-profit company like NPCI. The NUE should also
maintain a minimum net-worth of Rs 300 crore always. Among other functionalities, the
proposed umbrella body primarily will set up, manage and operate new payments system,
especially in the retail space. This can “comprise of but not limited to ATMs, White
Label PoS, Aadhaar-based payments and remittance services,” RBI stated. The NUE will
also be given a mandate to develop new payment methods, standards and technologies
and operate clearing and settlement system.
• RBI Governor Shaktikanta Das urged Indians to use the Digital Payment infrastructure of
the country in order to reduce the fallout of the Coronavirus Pandemic. The RBI and the
Government are giving a lot of emphasis in encouraging Digital Payments, taking
examples of using NEFT, IMPS and UPI as a way to minimize social contact to carry out
transactions. Banks were advised accordingly to promote Digital Payments.

23
Ministry of Electronics & Information Technology (MeitY) has been entrusted with the
responsibility of leading this initiative on “Promotion of Digital Transactions including Digital
Payments”. MeitY is working on various strategies, ideation with multiple stakeholders including
Banks, Central Ministries/Departments and States, to create an ecosystem to enable digital
payments across the country. MeitY is working on strengthening of Digital Payment infrastructure
and creating awareness through promotions of digital payments with all the stakeholders to achieve
Government’s vision of making citizens of this country digitally empowered. Citizens have been
provided multiple options to make digital transactions. A dedicated ‘Digidhan Mission’ was setup
in MeitY for building strategies and approaches in collaboration with all stakeholders to promote
digital payments and create awareness. Meity took several initiatives to promote digital payments
and achieve the targets in a mission mode. Few of them are outlined below.

(a) Digital payment transactions target have been assigned to Central Ministries with high citizen
touch points, Public Sector and Private Sector Banks to achieve the target.
(b) Training and workshops on digital payments awareness with several Ministries was conducted
and planned; MoRTH, MoHFW, Ministry of Agriculture, MSME, Department of Post, Ministry
of Power, Panchayti Raj, Ministry of Defense
(c) Promotional materials on publicity of digital payments including IEC materials was shared
with stakeholders to create awareness and sensitization
(d) Digital Payment dash board was created to track and monitor the progress of digital
transactions achieved by Banks.
(e) Promotion and awareness approach framework on digital payments was shared with Banks.
(f) BHIM cash back schemes for merchants
(g) BHIM Aadhaar merchant incentive schemes
(h) BHIM referral bonus schemes for Individuals

(i) MeitY promotes electronics manufacturing, the Central government will provide a financial
support of Rs 50,000 crore for ESDM industry. Industry representatives presented the "Restart,
Restore and Resurgence" model to capture the global opportunity in the Electronics System Design
and Manufacturing (ESDM) sector. The majority of the participants appreciated the new trilogy of

24
schemes of MeitY, namely, PLI, SPECS and EMC2.0; to support the electronics manufacturing
sector. Industry raised various issues related to working of factories, logistics, export, supply chain
disruption and demand shock due to Covid-19.

(j) MeitY’s initiatives like Aarogya Setu, Aadhar, Digital payments etc. have played a very
important role in fighting against COVID-19.

1.4 OBJECTIVES OF THE STUDY

➢ To get an overall overview of digital payment system in India especially in rural areas
➢ To study the consumer perception of digital payment modes.
➢ To study about the changes in payment methods from cash to online banking post
demonetization & Covid-19.
➢ To study the impact of demonetization on digital payment companies.
➢ Make sense of the trends in payments and how they are shaping the digital payments
landscape.
➢ Understand key features to make a digital payment proposition successful.
➢ Identify the key action to set a digital payments strategy and build capabilities to bring
digital payments propositions to market.

1.5 SCOPE OF THE STUDY

The project on digital payment sector is carried out to gain in-depth knowledge of the digital
payments modes and methods prevailing in India. This project will give us an insight on how the
traditional payment method of cash is gradually transforming into online payment methods
through e-wallets and net banking. It will help us to study about the impact of demonetization &
Covid-19 on digital payment companies. Also it will help us to know the status of digital payment
in rural India. Through this project, we can understand the digital payment platforms currently
prevailing in India and their position in the market, which will further help to choose the better
payment option. Also we can learn the drawbacks and the challenges faced by the Indian digital
payment sector.

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2. LITERATURE REVIEW

• 'Demonetization and its impact on adoption of digital payment: opportunities, issues and
challenges’ written by Dr. Dhani. Shanker Chaubey and Mr. Piyush Kumar and published
in the year June-17
This paper intended to know the importance of digital payment after Demonetization as perceived
by the people of India, to assess the people trust and confidence in digital payment system after
Demonetization, to assess the uses pattern and nature of transaction done by the people after
Demonetization and to identify the factors of digital payment after Demonetization.
From this paper, the authors concluded that the digital payment had given relief and force to learn
digital transaction after demonetization. People adopted technology slowly, but don’t wanted to
pay extra for digital transaction. However, people of India faces money problems during
demonetization they suffer with no cash. In addition, for this medium like paytm helps them.

• ‘Impact of demonetization on cashless transaction’ written by Ananya Mitra, Sonali Rath

and Jayant Kumar Nayak and published in the year July-17
The paper aimed to study the usage of various mode of electronic payment, to study the effect of
demonetization on cashless transaction in India and to suggest measures to successfully promote
cashless India. The findings of the study were that the decline in digital transactions in two
successive months goes against the government’s objective of a “less cash” economy. During the
scarcity of funds people preferred to use debit and credit cards at point of sale terminals and mobile
banking but these are also the two to be disposed of quickly. RTGS and Paper Vouchers usage fell
drastically after demonetization when compared against pre demonetization period. The value of
digital transactions in January and February taken together dropped below that of combined figure
of September and October, before demonetization was announced. To counter the negative effect
and encourage digital transactions, many private banks in the month of March, reintroduced
charges on transactions of cash deposits and withdrawals beyond the stipulated number of free
transactions. The step yielded positive result.

• 'Demonetization: impact on cashless payment system ' written by Mr. Manpreet Kaur,

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 Assistant Professor: SGTB Khalsa College, Anandpur Sahib and published in the year
January-17
The paper intended to study Role of Demonetization and to Examine Status of Electronic Payment
System. The study concludes that the cashless transaction system is reaching its growth day by
day, as soon as the market become globalized and the growth of banking sector more and more the
people moves from cash to cashless system. The cashless system is not only requirement but also
a need of today society. All the online market basically depends on cashless transaction system.
The cashless transition is not only safer than the cash transaction but is less time consuming and
not a trouble of carrying and trouble of wear and tear like paper money. It also helps in record of
the all the transaction done. So, it is without doubt said that future transaction system is cashless
transaction system.

• ‘Study of consumer' perception of digital payment mode', written by Mr. Shamsher Singh
and Mr. Ravish Rana and published in the year December 2017
The objective of the study was to find out the customer perception and impact of demographic
factors on adoption of digital mode of payment. This study has made an attempt to understand
customer perception regarding digital payment. It was found that demographic factor except
education does not have much impact on the adoption of the digital payment. Anova computation
supported this finding as there was no signification difference is perceived by the respondents on
the basis of gender age, profession and annual income. It was only education level of the
respondents where signification difference is perceived by the respondents. It indicates that
adoption of digital payment is influenced by the education level of the customer. If a person has
studied 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 possibility of acceptance of digital payment is much
higher. The growth of users of Smartphone and internet penetration in such area also facilitated
the adoption of digital payment.

• ‘Digital payments for rural India - challenges and opportunities', written by Shakir Ali,
Wasim Akhtar, and S. K. Safiuddin
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The paper aims to study the challenges and opportunities of digital payments in rural India. The
findings of the study were to reduce the digital divide and increasing the awareness in the rural
public, to ease the complexities and enable end-of-day settlement process for the merchants (As
small retailers and merchants need rotation of cash flow in quick turnaround time for their business
operations), to reduce the transaction charges over the digital payments and discourage cash
transactions. ICT infrastructure plays a vital role in successful adaptation of digital payments and
hence there is intrinsic need to improve and offer requisite infrastructure for digital payments.

• 'Black swan effect of demonetization on digital mode of payment in India ' written by
Professor Manisha Rajdhyaksha and Satyendra Jaiswal
The main purpose of this qualitative study is to study and position the concept of black swan event
like demonetization on the Indian digital mode of payment sector. This study showed how a black
swan event like the recent demonetization has far-reaching repercussions and implications for an
emerging sunrise sector like the Digital Payment.
The Indian Digital Payment sector has shown agility and dynamism in their innovativeness and
adaptability to survive and thrive in this black swan event. Moreover, the Indian Digital payment
sector adopted novel approaches on multiple parameters like business processes, product and or
service development, reaching hitherto untouched markets, creating market niches, technological
excellence, and creating world-class services in this payment arena. The proactive approach of
Government of India to instigate this demonetization and create enabling environment through
positive policies will jump-start this sector exponentially and boost their competitiveness. With
India ready to take its place in world order as an economic superpower, Digital Payment sector
will bring in new business models with disruptive technologies. And black swan event of
demonetization can unexpectedly become a catalyst for the growth and sustainability of this sector.

• A study on demonetization and its impact on cashless transactions, written by Mr. K. C.

Balaji.
The Objectives of the Study were:
➢ To study the history of demonetization across the world and in India.
➢ To study the impact of demonetization on cash less transactions.

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It was concluded that the growth of the cashless transaction system is reaching new heights. People
tend to move to cashless transactions. It is right to say that the cashless system is not only a
requirement but also a need for the society. But on the other hand, the risk of cyber-crime is very
much higher as almost all the cashless transactions are done over internet. So proper and complete
awareness must be made to the people to keep their debit and credit cards safe and to use the
internet banking and the digital wallet in a most secure way. In order to punish the cyber criminals,
the properly structured cyber police force with high end forensic labs and technology must be
created.

• 'Impact and importance of cashless transaction in India', written by Ms.Pranjali A.

Shendge, Mr. Bhushan G. Shelar and Asst.Prof. Smitaraja S. Kapase.
The aim behind this Research was:
➢ To know what a Cashless Transaction means.
➢ Impact and importance of Cashless Transaction System.
➢ Analyze the future trend of Cashless Transaction.
It was concluded that the benefits of this move have now started trickling in with more and more
people switching to digital modes of receiving and making payment. India is gradually
transitioning from a cash-centric to cashless economy. Digital transactions are traceable, therefore
easily taxable, leaving no room for the circulation of black money. The whole country is
undergoing the process of modernization in money transactions, with e-payment services gaining
unprecedented momentum. A large number of businesses, even street vendors, are now accepting
electronic payments, prompting the people to learn to transact the cashless way at a faster pace
than ever before.

• 'Opportunities and challenges of e- payment system in India', written by Mr. Sujith T S,

Julie C D.
The Objectives of the study were:
➢ To know the different modes of e-payment.
➢ To know the opportunities and challenges of e- payment system in India.
➢ To identify the future of digital payment system in India.

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It was concluded that Electronic payment refers to the mode of payment which does not include
physical cash or cheques. It includes debit card, credit card, smart card, ewallet etc. E-commerce
has its main link in its development on –line in the use of payment methods, some of which we
have analyzed in this work. The risk to the online payments are theft of payments data, personal
data and fraudulent rejection on the part of customers. Therefore, and until the use of electronic
signatures is wide spread, we must use the technology available for the moment to guarantee a
reasonable minimum level of security on the network.

• 'Emerging digital economy – a cashless perceptive in India', written by Mr. Parikshit

Agarwal.
It aims to study the initiative taken by the government towards Digital Economy in India,
challenges that will affect the implementation of Digital Economy and the Impact of Digital
Economy on India’s GDP.

It was concluded that the Government initiative to promote digital economy has provided the use
of latest digital infrastructure for quick delivery of financial service thereby reducing time span for
consumption of goods and services which ultimately adds towards GDP of the country. The
mainstream of Indian economy lies in rural areas, where 70% population is largely depended on
agriculture. If they are digitally connected their socio-economic conditions will improve through
development of non-agricultural economic activities which will be possible only by providing
them digital infrastructure and financial literacy. The government move towards digital economy
is a dynamic move which require working all factors simultaneously like literacy, infrastructure,
overall business environment, regulatory framework, etc.

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 3. RESEARCH METHODOLOGY

3.1 RESEARCH PROBLEM

To understand and learn about the different digital payment platforms currently prevailing in India
and their position in the market. To study about the status of digital payment in rural India. To
study about the impact of demonetization on digital payment. To learn the drawbacks and the
challenges faced by the Indian digital payment sector.

3.1.1 SAMPLE SIZE:

Sample size determination is the act of choosing the number of observations or replicates to
include in a statistical sample. The sample size is an important feature of any empirical study in
which the goal is to make inferences about a population from a sample. In this project five digital
payment companies have been considered for the study. And hence the sample size is one.

3.1.2 QUANTITATIVE RESEARCH DESIGN

Quantitative Research Design is a formal, objective, systematic process for obtaining quantifiable
information about the world, presented in numerical form, and analyzed through the use of
statistics. Quantitative research is concerned with numbers, statistics, and the relationships
between events/numbers.

3.1.3 DATA COLLECTION: Data collection is the process of gathering and measuring
information on variable of interest, in an established systematic way that enables one to answer
stated research questions, test hypotheses, and evaluate outcomes. The following data collection
methods have been used in this project

1. Primary data

2. Secondary data

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Primary data: The data collected through various methods like surveys, observations, physical
testing, mailed questionnaires, questionnaire filled and sent by enumerators, personal interviews,
telephonic interviews, focus groups, case studies, etc.

Secondary data: Secondary data implies second-hand information which is already collected and
recorded by any person other than the user for a purpose, not relating to the current research
problem. It is the readily available form of data collected from various sources like censuses,
government publications, and internal records of the organization, reports, books, journal articles,
and websites and so on. For this project, primary data as well as secondary data has been collected
from the following sources in order to study the current trends, opportunities, challenges in the
Digital payment sector -

1. Questionnaires

2. Published research reports, charts, research papers, journal and articles.

3.2 ANALYSIS OF DATA

The central government’s decision to demonetize Rs500 and Rs1000 notes has given a major push
to e-wallets and unified payment interface (UPI), an interoperable system launched by the Reserve
Bank of India (RBI) and the National Payments Corporation of India (NPCI), which will allow
peer-to-peer and peer-to-entity payments. E-wallets like Paytm, Freecharge have been quick to
capitalize on this and have been aggressively advertising to promote the usage of digital wallets as
a way of moving towards a cashless economy. Ola sent out notifications to its passengers saying –
‘Recharge Ola Money now and you don’t have to worry about carrying any notes, whether 500 or
1000. Ride cashless’.
Mobikwik also is providing cash pick up facility to its customers for some days. A person can click
on ‘cash pick up’ on the Mobikwik app, a representative of the wallet comes to them to exchange
Rs500 and Rs1000 notes and will directly load it in their e-wallet during demonetization phase.
This means, one doesn’t have to go to bank or automated teller machines (ATM’S) at all. Big
Bazaar kept all its stores open and popular cafe Social too was accepting Rs500 and Rs1000 notes
until midnight announcement. The fact that the trend has always been low value-high volume
transactions in the online space is likely to change in future. For the study of this project, analysis
has been made on the following five companies/e-wallets-

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1. PAYTM

Paytm is an Indian e-payment and e-commerce brand based out of Delhi NCR, India. Launched in
August 2010, it is a consumer brand of parent company One97 Communications. The name is an
acronym for "Payment through Mobile". The company employs over 20,000 employees as of 2020
and has 3 million offline merchants across India. It also operates the Paytm payment gateway and
the Paytm Wallet. In a short span of time, it has scaled to over 250 Mn registered users. One of the
biggest beneficiaries of demonetization has been Paytm as people have moved to cashless
payments owing to cash crunch.

Paytm has witnessed over 7 million transactions worth Rs 120 crore a day as millions of
consumers and merchants across the country try mobile payments on the Paytm payment
platform for the first time. Now wherever we go, whether it’s small shops or a big store, we see a
Scanning code on wall with “Paytm logo” which says PAYTM KARO. Gross Merchandise
Value (GMV), which is an industry term for estimating the total worth of goods sold through a
digital platform, for Paytm was $3 billion. Offline transactions now contribute to over 65 per
cent of the overall business from 15 per cent. Its Estimated Annual Revenue is $448M.

They are also working on expanding our merchant network by 150,000 additional merchants.
Mobile payment transaction value in India is also likely to register over 150 per cent CAGR and
cross Rs 2,000 trillion by FY 2021-22 from just over Rs 8 trillion in FY 2015-16. Taglines like
“Ab ATM nahi, Paytm karo” “cash is so yesterday” are doing the rounds. In 2107 they came up
with Paytm Payments Bank — India’s first bank with zero charges on online transactions, no
minimum balance requirement and free virtual debit card. A new banking model to the world where
an account holder’s money will be absolutely safe. Deposits will only be invested in government
bonds that are used for the development of our nation & will offer an annual interest of 4% for all
savings accounts. Merchant partners will also have access to current bank accounts. Recently it has
recorded Rs 1000 crore in deposits with over 5.7 crore saving account holders, calling it a
milestone for India’s only profitable payments bank.

They are also briefly offering a pay later solution called PayTM Postpaid, Amidst the lockdown
due to the COVID-19 pandemic, more people are embracing digital banking and this has
triggered the numbers. Paytm’s digital payments transactions through Unified Payments
Interface (UPI), e-wallets and debit/credit cards registered a fall of 30-40% due to the COVID-19

33
outbreak. They have launched COVID-19 Benefit Insurance Policy in collaboration with Reliance
General Insurance, which provides the widest possible coverage. This insurance plan offers a
best-in-class sum assured a maximum of Rs. 2 lakhs. COVID-19 Protection insurance is a much-
needed product in the market. From covering against positive diagnosis, 14-day quarantine, loss
of pay/job, it also offers a waiver to the 45 days Travel exclusion policy as add-ons. This policy
aims at reducing the financial implications one might occur due to the pandemic. Insurance plan
provides 100% sum-insured in lumpsum on being tested positive for the virus and the patient does
not need to wait for the entire treatment to get completed to receive the financial help. This policy
covers individuals between the ages of 3 months to 60 years, with a wide range of sum-insured
options ranging from Rs. 25,000 to Rs 2 lakhs.

2. MOBIKWIK
MobiKwik is an Indian company founded in 2009 that provides a mobile phone based payment
system and digital wallet. Customers add money to an online wallet that can be used for payments.
In 2013 the Reserve Bank of India authorized the company's use of the MobiKwik wallet, and in
May 2016 the company began providing small loans to consumers as part of its service. In
November 2016, the company reported having 1.5 million merchants using its service and a user
base of 55 million customers. In 2020, the company reported having 107 million users, as well as
3 million merchants, and 200+ billers. In a partnership with Cash Care, MobiKwik began
providing small loans between 500–2,500 Indian rupees to customers in May 2016. Mobile wallet
company MobiKwik witnessed an over 40% increase in app downloads in less than 18 hours of
the demonetization of the Rs 500 and Rs 1000 notes. Following the 2016 Indian banknote
demonetization in November 2016, MobiKwik realized a 400% increase in financial transactions
using the service by late December, 2016.

Additionally, user traffic and merchant queries went up by 200 percent. As part of the
demonetization offering, MobiKwik has introduced a new feature where e-commerce players can
ask for payment via “MobiKwik on delivery” since cash on delivery has become a non-option for
many. The “International Recharge” service on MobiKwik app is currently live across various
geographies including the Middle East, Asia Pacific, Europe, Africa, the United States, Latin
America, and the Carribean, enabling users to seamlessly recharge a mobile number across DT
One’s global network of over 550 operators. After the upliftment of the RBI curb, BuyUcoin
entered into a partnership with Mobikwik which further allows Indian users with the ease of simple

34
smartphone-based transactions to buy or sell crypto assets. The company plans to apprise
individuals with the concept of cryptocurrency. In light of the coronavirus (COVID-19) pandemic,
BuyUcoin has announced an initiative to contribute 15 percent of its exchange trading fees to the
COVID-19 RELIEF FUND for the next 3 months to help the Indian government.

UPI & BHIM

Unified Payments Interface (UPI) is an instant real-time payment system developed by National
Payments Corporation of India facilitating inter-bank transactions. The interface is regulated by
the Reserve Bank of India and works by instantly transferring funds between two bank accounts
on a mobile platform.

Pre-demonetisation
It remained a slow-starter. According to NPCI, the number of UPI transactions touched 1.22 lakh
in September 2016.Some banks launched their own UPI apps, too. Though many banks have made
a mention about UPI in their annual reports, only a few have given numbers on UPI.

Post-demonetisation
Then came demonetization, and the number of UPI-based transactions shot up. The launch of the
UPI-based BHIM (Bharat Interface for Money) app on December 30, 2016, by NPCI gave a
further thrust to the payment platform. RBI data put the volume of UPI transactions at three lakh,
20 lakh and 42 lakh during November, December and January, respectively. Currently, BHIM is
live on 130 banks, which is remained stagnant from three consecutive months and has seen over
136 million app downloads. In terms of net additions, the number of transactions for BHIM
sharply declined by 5.9 million in April 2020 – the highest addition was in December 2019 –
while the total amount transacted went down by Rs 2,020.3 crore. In the previous month (March
2020), the number of transactions went down by 1.4 million and the amount transacted decreased
by Rs 474.9 crore. UPI is currently being offered by 52 banks. Recently, NPCI stated that the
number of BHIM app downloads had crossed 1.6 crore. BHIM had an active customer base of 40
lakh. UPI lodged over 1 billion transactions in March 2020 even as both value and volume of
payments on the channel showed decline due to curbs on daily commerce and limited economic
activity on account of restrictions imposed to slow the spread of COVID-19 and Yes Bank
related disruptions. Government suggests BHIM app to make life easier during lockdown.

35
4. PHONEPE
PhonePe is a Fin-Tech company headquartered in Bangalore, India. Founded in December 2015,
it provides online payment system based on Unified Payments Interface (UPI), which is a new
process in electronic funds transfer launched by National Payments Corporation of India (NPCI).
It is licensed by the Reserve Bank of India for issuance and operation of a Semi Closed Prepaid
Payment system. PhonePe is one of the best applications for the shopping. Offers like, refer and
earn program, 100% cash back on first UPI transaction, on fifth UPI transaction 50%, for first
bill payment 100% cash back in the wallet. There are so many other offers as well. It is friendly
and it is having so many good features that we all expect in current time like one of the best is
Split Bills. Lastly, we can keep track in the mailbox as well as in the application for our expenses
with full detailed information.

The service which was acquired by Flipkart in April 2016 has also extended its offline merchant
network, riding on the ‘cashless economy’ wave sweeping the nation. At present, it is owned by
e-commerce giant Walmart over 25,000 offline merchants accept PhonePe payments. While
peer-to-peer payments and bill recharges generate maximum volumes on PhonePe, the service
also intends to get into the selling of financial products, and wealth management in the near
future. Walmart-backed PhonePe witnessed higher transactions on their platform. An uptick in
switch partners from whom users can buy essentials/staples such as groceries, medicine and
food. This is happening across all locations (tier-1/2/3 and beyond) in context of the coronavirus
pandemic. PhonePe is the largest payments partner of YES Bank it suffered an outage in services
after its banking partner YES Bank's moratorium notice by RBI. The ED has filed a money
laundering case against Yes Bank promoter.

5. FREECHARGE

FreeCharge is an e-commerce website headquartered in Gurgaon. It provides online facility to

recharge any prepaid mobile phone, postpaid mobile, DTH & Data Cards in India. On 8 April
2015, Snapdeal acquired Freecharge in what is being referred to as the second biggest takeover in
the Indian e-commerce sector so far. On 27 July 2017 Axis Bank acquired FreeCharge for $60
million. Within the first 24 hours of the announcement of demonetization, the wallet loads of
Snapdeal-owned mobile transactions platform Freecharge grew 12 times and has been increasing
by the same average since then. Within the first 24 hours, wallet loads grew by 12x versus the 30

36
days’ average before. The number of people downloading the Freecharge app, registrations for
mobile wallet, transactions on third party merchants are all growing by 10-15 times on a per day
average basis. Demonetisation has given a boost to the cashless society and people are finally
seeing the value of commerce, logistics and payments being integrated. Apart from above, below
are the names of some more digital payments companies/e-wallets-

1. Airtel money

2. Citrus Pay

3. HDFC PayZapp

4. ICICI pockets

5. JioMoney

6. Ola Money

7. Citi Master Pass

3.2.1 DIGITAL PAYMENTS IN RURAL INDIA

In both urban and rural areas, online financial transactions, e-commerce activities as well as digital
payments still lag considerably, despite demonetization and the drive to promote digital payments
over the last one year. Rural India lags behind urban areas in not just Internet penetration but also
in Internet access for online financial transactions due to lack of electricity and poor network
quality, a study by Internet and Mobile Association of India (IAMAI) and market research firm
Kantar IMRB said. In both urban and rural areas, online financial transactions, e-commerce
activities as well as digital payments still lag considerably, despite demonetization and the drive
to promote digital payments over the last one year, the report said, adding that the situation was
worse in rural areas. Only 16% of rural users access the Internet for financial transactions, while
in urban areas 44% users access the Internet for this purpose. A lot of these payments are peer to
peer, and therefore there is a multiplier effect. So this has picked up in urban areas but the required
critical mass has not been built in rural areas. Moreover, rural users are not continuously online in
real time but switch off the Internet for long periods.

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Lack of electricity to charge devices, poor network quality and affordability of Internet service
packs are the reasons for such behavior and unless this trend is reversed, usage purposes will
remain skewed and off take of digital payments will remain restricted, the report said.
“Connectivity, and more importantly quality, of connectivity is a question mark in rural areas. As
of December 2017, India had 481 million Internet users, an increase of 11.34% from a year earlier.
Of this, urban India has 295 million Internet users and rural 186 million. While rural India saw
Internet usage grow at 14.11% year-on-year, compared to urban India which grew at 9.66%, this
was mainly due to a low base effect as the total number of Internet users in rural India is still
critically low, the report points out.
As far as frequency of Internet usage is concerned, 182.9 million urban users access the Internet
every day, as against 98 million users in rural areas. This usage pattern is closely related to
connectivity, quality of service and affordability. Among the urban population, online
communication is the top activity with 86% of users accessing the Internet for this purpose,
followed by entertainment (85%) and social networking (70%). In rural India, however,
entertainment stood out as the most popular Internet activity for 58% of the population surveyed,
followed by online communication (56%) and social networking (49%). India's rural customers
are not yet ready to go completely digital, as far as finance is concerned. Some human touch is still
needed and desired in almost every financial transaction. While this will most likely change, as
more people become increasingly comfortable with technology, the journey is
ongoing. Phygitalisation of the rural ecosystem therefore is potentially the immediate solution to
accelerate rural inclusion.
CSC e-Governance Services India Ltd is a special purpose vehicle set up by the ministry of
electronics & IT to oversee implementation of the CSC scheme and ensure delivery of essential
public utility services, social welfare schemes, and healthcare to citizens through these centers.
Infrastructure needs to be made a lot better and services need to be more affordable to achieve
the desired growth in Internet usage in rural areas. For the purpose of the study, Kantar IMRB
collected data from 60,000 individuals from different demographic segments across 170 cities
and from 15,000 individuals across 750 villages. Aadhar based AePS central to financial
inclusion drive in rural areas also recorded a 16% decline in volumes processed with 18.1 crore
transactions worth Rs.10170 crore processed in the said timeframe, data from NPCI showed in
March due to COVID-19.

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CONSUMER PERCERPTION TOWARDS DIGITAL PAYMENTS IN RURAL AREAS

The survey carried out on consumer perception towards digital payment received 87 respondents.
While answering to the question on digital payment in rural areas, many of them gave similar
reasons for the failure of digital payments in rural areas. Some of the reasons put forth by the
respondents are as mentioned below-

➢ Absence of proper infrastructure and illiteracy

➢ Poor network connectivity in rural areas
➢ Lack of awareness about digital payments in rural areas
➢ Security is the major concern of these people
➢ Adoptability and convenience issues
➢ Sudden changes take time to be implemented completely

3.2.2 CONSUMER PERCEPTION TOWARDS DIGITAL PAYMENT MODES

An online survey on ‘Consumer Perception towards Digital Payment Modes’ through
Google questionnaire form was carried out, which received 87 respondents. Here is the
list of the questions asked in the questionnaire

1. Name
2. Age
3. Gender
4. Occupation
5. Which mode of payment do you frequently use?
6. If online banking, then why?
7. How often do you use digital payment modes to make online payment of bills
and purchases?
8. For which of the transactions mentioned below, do you prefer to use digital
payment modes.
9. How much do you think are digital payment modes secured?
10. Has your usage of digital payment modes increased post-demonetization?

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 11. Do you think demonetization has helped in the promotion & acceptance of
digital payment modes?

All the above question was answered by the 87 respondents, results of the same are
discussed below-

As seen from the above graph, the most of the population makes use of cash. Debit/credit
card, online banking combinable. Only a 10% of the population makes use of online
payment.

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If you prefer online banking, then please state the reason.

Majority of the people use online banking to save their time, followed by faster transfer of
funds. Avoid standing in the queue is also one of the reasons. Half of the population is
attracted towards the discounts offered by the digital payment companies. Very use the
same for recording their transactions.

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Only 27 % of the population always uses digital payment modes, and it mostly younger
age group between 15 to 30 years, followed by 44% who uses it frequently. 24 % of the
population uses it only when they are in a hurry or fall short of money.

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As we can see most frequently it is used for recharge, fund transfer and online shopping.
Comparatively lesser people use it for payment of electricity and other bills.

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As we can see that 83% people feels that digital payment modes are secured but there
are still 4% who feel that they are still not at all secured.

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Thus we can say that demonetization has impact of digital payment modes as 67% people
claims that their use of digital payment modes has increased post demonetization.

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Digital payment has surely been benefited by demonetization as claimed by 85 % of the
population.

➢ Cashless economy is not possible in India due to the dominance of traditional methods
➢ Completely not using cash will also not be possible as the same is required while making
payments to small vendors
➢ India should review its infrastructure policies and adopt strong and secured network
connections
➢ People like the concept of cashless society and claim that 20 years down the line, India can
become a cashless economy, giving a definite support people claim that it will be a great
start for transparent economy.

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3.2.3 CHANGES IN PAYMENT METHODS FROM CASH TO ONLINE
BANKING POST DEMONETIZATION.
The adoption rate of online platforms was high during the demonetization period, but it
plateaued out as soon as cash became available in the system. When the Modi government
banned high denomination notes of Rs 500 and Rs 1,000 notes on November 8 2016, removing
an overwhelming amount of cash from the economy, people had to willy-nilly fall back on
plastic or online transactions. The fact that 86 per cent of the cash available in the system was
sucked out. But once cash was back in circulation, those who earlier dealt mostly in cash went
back to doing so.

The PCI was formed under the aegis of Internet and Mobile Association of India in 2013 to cater
to the needs of the digital payment industry. During November, December 2016 and January
2017, online transactions were at their peak. In October 2016, debit card transactions stood at Rs
21,941 crore and those of credit cards at Rs 29,942 crore. Post-demonetization, in December
2016, debit card transactions jumped to Rs 58,000 crore and those of credit card were at Rs
31,150 crore. However, in August 2017, 10 months after the note ban, debit and credit card
transaction stood at Rs 36,000 crore each, having come down substantially from the heights they
achieved, but not falling back to the pre-demonetization lows.

After the cash flow in the system eased, small kirana shops stopped transacting through online
payment channels, because they did not want to take a tax number or a Goods and Services Tax
number. They do not have the wherewithal to pay taxes and the government needs to incentivize
merchants, otherwise small and medium enterprises are going to go back to cash mode. Security
and trust in payment systems was something all stakeholders need to work on together. Online
transactions are bound to grow over a period of time, but in a country which overwhelmingly ran
on cash; it may be difficult to do a quick digitization.

3.2.4 IMPACT OF DEMONETIZATION ON DIGITAL PAYMENT

COMPANIES.
Digital payments companies stand out as one of the most significant beneficiaries of the move.
Post demonetization, there has been a marked reduction in the resistance towards digital
payments, and this medium should continue to see sustained adoption going forward. One of the
talking points of the digital payments story has been the phenomenal growth witnessed by new
age instruments such as Unified Payments Interface (UPI), prepaid payment instruments (PPIs),
Aadhaar Enabled Payment System (AEPS), along with well-established ones such as National
Electronic Fund Transfer (NEFT), Real Time Gross Settlement (RTGS) and cards .

47
Digital payment companies have seen a substantial jump in their business as a result of the
government’s measures towards promoting cashless transactions post demonetization. These firms
are likely to further consolidate their business with more incentives for digital transactions.

In the year after demonetization, digital transactions have grown considerably. Indeed, disruptions
in the digital space have not only revolutionized the way we manage our finances, they have also
made contactless and cashless transactions the preferred choice of many among us. And, with
digital wallets, quick response (QR) codes, near field communication (NFC) technology, sound
wave systems, virtual cards, unified payment interface (UPI) and Aadhaar Pay offering top-notch
secure payments options, the smart phone has become the most sought after all-in-one device.
Interestingly, the volume of digital transactions rose in March and April (Rs 156 crore in both
months) when the effects of demonetization in terms of lack of cash had begun to wear off.
Thereafter, the monthly average of Rs 136-138 crore indicates a steady pattern even as the value
is rising.

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The report, shared with the finance standing committee of Parliament, shows significant increases
in average daily transactions across all platforms, such as UPI-BHIM, IMPS, M-wallet and debit
cards, since November last year, when PM Modi announced demonetization. There has been
progress in establishing the 'Jan Dhan-Aadhaar-Mobile trinity', with 118 crore mobiles, a similar
number of Aadhaar numbers and 31 crore Jan Dhan accounts.
Since November 2016 till 2018, there has been a 221% increase in volume of transactions and
118% increase in value of transactions in the non-tax receipt portal," the government said. In
close proximation to Aadhaar architect Nandan Nilekani's statement that the government had
saved around $9 billion by eliminating frauds in benefit payments, the government said direct
benefit transfer had resulted in savings of Rs 57,029 crore in 2016-17. There has been a big
increase in e-toll payments from Rs 88 crore in January 2016 to Rs 275 crore in August 2017 but
the number of tags remains low at 6 lakh till September 2017. There has been a strong growth in
volume and value of BHIM-UPI transactions. The value rose from Rs 101 crore in November
2016 to Rs 7,057 crore in October 2017. Mobikwik had 3-3.5 crore users in the pre-
demonetisation days and a year after note ban it has 6.5 crore. The company also witnessed a
sharp rise in transactions from one million to three million within a year. Digital transactions
have grown. But the key thing is that a lot of stepping stones for future adoption have been laid
down like the BHIM (Bharat Interface for Money) app by the government. Demonetisation was
the shock that forced people to move to online channels.

FACTORS THAT HAVE DRIVEN THE RISE IN DIGITAL PAYMENTS:

1. Embedding of offline space in the business growth strategy

Offline space has evolved into the most recent battlefield for payment service providers.
Acquiring banks have deployed almost 29 lakh POS terminals across the country, up by almost
95%. This space has also attracted the attention of UPI and PPI players, and many of them have
developed innovative solutions to assist large merchant outlets, micro-merchants, cash on
delivery payment facilitators of ecommerce firms, etc., in accepting payments seamlessly over
mobile phones. Customers facing issues with cash availability post the note ban began to
experiment with these digital payment modes.

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2. Building of ecosystem around digital payments

Quite a few players rolled out multiple solutions allied with digital payments, which further
helped in their adoption. A notable few were:

• Integration of enterprise resource planning (ERP) of corporates with the UPI solution for
real-time management information system (MIS) updates

• Disbursement of instant loans based on the footprint generated by digital payments

3. Boost to interoperability

One of the most significant changes in the payments landscape is the push towards
interoperability, with instruments such as UPI allowing transfers between 55 banks, independent
of the acquirer payment service provider mobile app. The increasing adoption of the Bharat Bill
Payment System (BBPS), Bharat QR and interoperability guidelines for PPI players will lend a
further push to seamless, secure and interoperable payments.

4. Promotional efforts by players

Several payment processing firms and FinTech companies leveraged demonetisation to penetrate
the market. In an effort to expand their market share, quite a few of them offered loyalty points,
instant cashbacks and referral rewards to users. While some may have doubts about the long-term
sustainability of such offers, the promotional efforts definitely provided an impetus to users
considering a switch to digital payments.

The way forward

The growth streak of digital payments is likely to continue in the future. The next push to the
adoption of digital payments could come from relatively slow adopters such as the rural
economy and the small and medium-sized enterprises (SME) sector. Government incentives such
as discounts on digital GST payments and set-up of accelerator program will provide an added
boost. A few specific use cases may emerge in the space of business to business (B2B)
payments, Electronic Clearance Service (ECS) mandates, equated monthly instalments (EMIs),
person to government payments (P2G) in smart cities, etc. These are likely to have a positive
impact on transaction volume size going forward.
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 4. CONSOLIDATED RESULTS

An upshot of demonetization was that the digital modes of payments picked up sharply. After
demonetization, there has been a significant emphasis on digital modes of payment. The
Government of India and the Reserve Bank have initiated a series of measures, some of which are
temporary, to promote movement from cash to non-cash modes of transactions. They include,

(i) Reduction in the merchant discount rate (MDR) and point of sale (POS) fees;

(ii) Monetary incentives in the form of discounts and prizes;

(iii) Service tax relief on MDR for small transactions;

(iv) Waiver of charges for small value transactions under Immediate Payment Service (IMPS),
Unified Payment Interface (UPI) and Unstructured Supplementary Service Data (USSD) based
platform;

(v) Broadening Prepaid Payment Instrument (PPI) reach by enhancement of limits;

(vi) Introduction of a new category of ppis

(vii) Permitting banks to issue ppis to a larger set of entities

(viii) Permitting National Payments Corporation of India (NPCI) to launch

(a) the common app for UPI

(b) National Electronic Toll Collection (NETC) system.

The government also announced that it would ensure that transactions fee/MDR charges associated
with payment through digital means shall not be passed on to consumers. These measures are
encouraging migration of consumers from cash to digital modes of payments. After the
announcement of demonetisation, digital activity levels were low in the initial weeks as people
were busy depositing/exchanging SBNs.

51
The digital payment activity is better reflected in the sequential growth in the months following
demonetisation. The pattern of digital transactions in February 2017 over November 2016 shows
that the growth rates surged in both value and volume terms compared with the corresponding
year, for most electronic modes of payment, even as there was some decline in the use of digital
payments after December 2016, While it is important that efforts be made for increasing
acceptance of digital payments, it is equally vital to ensure that the digital payments are safe and
secure. It has been the constant endeavor of the Reserve Bank to enhance security features of
currency notes to maintain confidence in India’s paper currency. Similarly, there is a need to
constantly review and ramp up security features of digital payments to maintain and enhance trust
of its users, especially, given the low levels of literacy in India. In this context, the Report of the
Committee on Digital Payments (Chairman: Shri Ratan Watal) submitted in December 2016 has
also underlined, inter alia, the need for enhancing the resilience of the Indian payments and
settlement systems; and strengthening the consumer protection framework in digital payments.

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 5. CONCLUSION

Digital payment is extremely useful for the people who belong to the class where cash is
considered the most suitable medium. If this technology grows to the point that every store
accepts exchange of money through wallets, then it would remove the need to carry cash or
cards.
The three most popular digital Wallets available in Indian market are MobiKwik, Paytm and PayU.
Besides private actors like Paytm, Mobikwik, and FreeCharge, the Indian government has been
aggressively pushing several digital payment applications, including the Aadhaar Payment app,
the UPI app, and the Bharat Interface for Money (BHIM) app developed by the National
Payments Corporation of India (NPCI).

The new apps aim to ease the transfer of funds across India, especially in rural communities, and
more importantly, seek to facilitate a behavioral change towards the greater adoption of cashless
services. As such, the digital payments industry is fast becoming a highly attractive destination
for foreign investors keen to establish a foothold in India.

Multiple factors and parallel institutional and behavioral trends seem to be powering India’s
transition towards a less-cash economy. The rapid penetration of smartphones and spread of
internet connectivity on mobiles, digital payment services provided by non-banking
institutions and the rise of the fintech sector, consumer expectations of one-touch payments,
and progress in regulatory governance and tax breaks, have altogether shaped India’s payments
landscape in favor of digital solutions.

The Indian banking sector has been growing successfully, innovating and trying to adopt and
implement electronic payments to enhance the banking system. Though the Indian payment
systems have always been dominated by paper-based transactions, e-payments are not far behind.
Ever since the introduction of e-payments in India, the banking sector has witnessed growth like
never before.

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 6. REFERENCES

• Manpreet Kaur Demonetization: Impact On Cashless Payemnt System International

Journal of Science, Technology and Management (IJSTM) vol.no. -6 issue no. January
2017
• https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=38520 retrieve on March 3,
2017
• Alpana Killawala, Principal Adviser PRESS RELEASES Government of India vide
their Notification no. 2652 dated November 8, 2016
• Demonetization Pdf – Pros and Cons of Demonetization Rs 500,1000- Demonetization
Essay - https://www.studydhaba.com/demonetization-pdf retrieved on 3rd March, 2017.
• Joshi, M. C. (2017). Digital Payment System: A Feat Forward of India. Research
Dimention, October (National Multi-Disciplinary Conference on Digital Payment System
and Rural India on 7th October 2017 organised by ARB Garud College Shendurni,
Maharashtra), 1-9. doi: 7th October 2017
• Nayak, G. (2017, 2017/07/13/). Digital Payments: Demonetisation has brought nation 3
years ahead in digital payments: SBI Ecoflash - The Economic Times.
https://economictimes.indiatimes.com/industry/banking/finance/demonetisation-has-
brought-nation-3-years-ahead-in-digital-payments-sbi-
ecoflash/articleshow/59580724.cms
• Ravi, C. (2017). Digital payments system and rural India: A review of transaction to
cashless economy. Variyar, M. (2017). What Budget 2017 did not have for digital
payments - ETtech. ETtech.com. Retrieved September 2017, 2017, from
http://tech.economictimes.indiatimes.com/news/internet/what-budget-2017-did-not-have-
for-digital-payments/56917077
• https://paytm.com/
• https://www.mobikwik.com/
• https://razorpay.com
• https://www.wikipedia.org/
• www.freecharge.com

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 ANNEXURE
1. Which mode of payment do you frequently use?
a. Cash
b. Debit/Credit Card
c. Online Bank
d. Paytm
e. e-Vault
f. Wallet payment
g. UPI App

2. If you prefer online banking, then press state the reason

a. Saves Time
b. Avoid standing
c. Fast transfer
d. Discounts/offers
e. Record Transaction

3. How often do you use digital payment modes to make online payment of bills and
purchases?
a. Rarely
b. Frequently
c. Always
d. Only when I fall short of cash
e. Only when I am in a hurry

4. For which of the transactions mentioned below, do you prefer to use digital payment
modes.
a. Recharge
b. Fund transfer
c. Online shopping
d. Payment of electricity
e. Payment of others

5. How much do you think are digital payment modes secured?

a. Highly Secured
b. Secured
c. Not at all secured

6. Has your usage of digital payment modes increased post-demonetisation?

a. Yes
b. No

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 7. Do you think demonetization has helped in the promotion and acceptance of digital
modes?

a. Yes

b. no

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