RESEARCH & ANALYSIS ON

“CONSUMER ADOPTION OF CASHLESS PAYMENTS”

A STUDY CONDUCTED FOR

B.A ECONOMICS HONOURS RESEARCH PROJECT
AT SATYAWATI COLLEGE (EVENING),
UNIVERSITY OF DELHI

PRITI DUTTA

October 2022

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 TABLE OF CONTENTS

ABSTRACT............................................................................................................. pg03

LIST OF TABLES & FIGURES............................................................................... pg04

INTRODUCTION.................................................................................................... pg05

Cashless Economy

Government Initiatives undertaken in India & other countries

Cashless Effect

REVIEW OF LITERATURE................................................................................. ...pg10

RESEARCH OBJECTIVES & QUESTIONS............................................................pg14

RESEARCH METHODOLOGY...............................................................................pg15

RESULT & ANALYSIS.................................................................................. .........pg16

Demographic Profiles of Respondents

Most Preferred Mode of Payment After COVID-19

Reasons for Choosing Cash and Cashless Payments

Use of Digital Wallets or Digital Payment Methods

Separate Bank Accounts for Online Transactions

Preferable Mode of Payment while categorising the different Types of Expenses

Challenges around Cashless Payments

Self-Assessment of Knowledge in Finances and Form of Payment

Attitude towards Cash and Cashless Payments

REFERENCES......................................................................................................... pg28

APPENDIX: QUESTIONNAIRE.............................................................................pg30

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 ABSTRACT

This paper aims to ascertain the adoption of a "CASHLESS ECONOMY" by consumers

of age 18 or above. Referring to the research objectives of this particular study, it is clear
that the aim lies in understanding the influence of cashless payment systems on
CONSUMER CONSUMPTION, CONSUMER SPENDING BEHAVIOUR and the
overall FREQUENCY of using CASH and CASHLESS PAYMENTS by consumers of
the various age groups.

The study is carried out with the help of primary data, assembled through a brief online
questionnaire. Data analysis tools were used to compare the differences between the
alternatives selected by the respondents of this particular study.

The major results and analysis of this study lies in the variance of the choices selected by
the participants under topics such as the reasons for choosing cash and cashless payments,
frequency in usage of different digital payments and the use of different cashless payment
methods for different types of expenses.

The conclusion of this particular research is that with the technology being rapidly
converted, the need for Cashless Payments is huge but there is clearly a distinct and
obvious difference in the use of different payment methods which depends uniquely on
the interests and comfort of the consumers.

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 LIST OF TABLES & FIGURES

Table 1. Demographic Profiles of Respondents

Table 2. Most Preferred Mode of Payment after COVID – 19

Table 3. Reasons for choosing ‘CASH’ Payments

Table 4. Reasons for choosing ‘CASHLESS’ Payments

Table 5. Use of Digital payments for making transactions

Table 6. Use of Digital payments for making transactions – ANOVA (Single)

Table 7. Separate Bank Accounts for Online Transactions

Table 8. Preferable Mode of Payment in below categories

Table 9. Preferable Mode of Payment in below categories – ANOVA (Single)

Table 10. Challenges around Cashless Payments

Table 11. Self-Assessment of Knowledge in Finances and Form of Payment

Table 12. Attitude towards Cash and Cashless Payments

Figure 1. Demographic Profiles of Respondents

Figure 2. Reasons for choosing ‘CASH’ Payments

Figure 3. Reasons for choosing ‘CASHLESS’ Payments

Figure 4. Use of Digital payments for making transactions

Figure 5. Preferable Mode of Payment in below categories

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 INTRODUCTION

Cashless societies, based on barter and other forms of exchange, have existed since the
dawn of human society. In the current day, cashless transactions are now feasible owing
to the use of credit cards, debit cards, mobile payments, and digital currencies such
as bitcoin.

Such an approach has prompted a great deal of debate, particularly because electronic
transactions that might have been traditionally made with cash are now routinely made
using digital ways of recording, managing, and exchanging money in trade, investments,
and daily life in many areas of the world. The number of transactions and transaction
values that can lawfully be paid for using non-electronic means of payment is now capped
in some nations.

In the 1990s, as electronic banking spread, a trend toward using non-cash transactions
and settlements in daily life emerged. By the 2010s, contactless and NFC payments via
electronic cards or smartphones, electronic bills, and electronic banking were
commonplace in many countries. Examples include intermediaries like PayPal, digital
wallet systems like Apple Pay, and contactless and NFC payments by electronic card or
smartphone. Due to its versatility and ease of use in money laundering and the financing
of terrorism, cash had at this point actively fallen out of favour in some types of
transactions that would have historically been very common to pay with physical tender,
and larger cash amounts were sometimes treated with suspicion. Additionally, some
suppliers and retailers aggressively forbid payment in large amounts of cash, leading to
the emergence of the phrase "war on cash".

Cashless Economy

An economy is said to be "cashless" when transactions are primarily financed by credit

cards, debit cards, and prepaid payment instruments rather than by notes, coins, or any
other physical form of money.

A "cashless economy" is one in which all transactions are processed electronically

through means such as direct debit, credit cards, debit cards, electronic clearing, and

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payment systems such as India's Immediate Payment Service (IMPS), National Electronic
Funds Transfer (NEFT), and Real-Time Gross Settlement (RTGS).

There were a few highlights which marked the onset of a cashless economy in India:

 Post Demonetization, to reach its target of creating a predominantly cashless

economy, the Centre is actively promoting online and card-based transactions in
the nation.
 The country's rapidly expanding e-payment start-up scene.
 The Unified Payments Interface (UPI) was launched to enable cashless
transactions.
 In India, a significant shift toward digital transactions was sparked by the Covid-
19 epidemic, in line with the prime minister's ambition to establish a "Digital
India." In fact, according to data from the National Payments Corporation of India
(NPCI), the volume of UPI payments reached an all-time high in June 2020 of 1.34
billion, with transactions totalling close to Rs 2.62 lakh crore.

Data on debit card usage illustrates the challenges of moving digital: about 85% (by
volume) and 94% (by value) of all debit card usage occurs at ATMs for cash withdrawals.
Thus, a way to withdraw cash is the main function of cards in an Indian environment. The
quest for financial inclusion, which resulted in the opening of more than 170 million bank
accounts, has directly contributed to the exponential expansion of debit cards (over 600
million). Despite the fact that millions of people now have access to plastic money, the
intention of the move was just to shift cash withdrawals from banks to ATMs.

Government Initiatives undertaken in India & other countries

With the launch of the government's Digital India initiative, the cashless economy in India
has grown significantly. This flagship program strives to transform India into a
knowledge economy and society that is enabled by technology.

 Demonetisation was implemented in November 2016 as the initial step. India's

ratio of cash to GDP at the time of demonetization was about 12%. Following
demonetisation, that proportion decreased to almost 9% of the GDP. But after that,
it continued to grow consistently but slowly.
After the demonetisation, Paytm saw daily usage rise from three million
transactions to five million. In the first two days following the demonetisation, it

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 also had a 700% spike in overall traffic and a 1000% increase in the amount of
money added to its account.
 UPI: India's largest and riskiest payment interface bet to date is UPI. National
Payments Corporation of India (NPCI) introduced the Unified Payments Interface
to advance RBI's goal of moving toward a "less cash" and more digital society. A
system for frictionless transfers has been developed on top of the immediate
payment service (IMPS) platform using a set of common application programming
interfaces (APIs).
 Direct Benefit Transfer: The government of India created the Direct Benefit
Transfer programme to allow recipients of several social welfare programmes,
such as the Old Age Pension, Scholarship, and MGNREGA, to get their benefits
and subsidies directly into their bank accounts. This made it possible for digital
banking to spread throughout rural India.
 NITI Aayog Committee, a group led by Amitabh Kant, CEO of NITI Aayog, has
been established by the government to develop a plan to hasten India's transition
to a cashless society.
To encourage the implementation of digital payment systems, the panel will
frequently interact with all stakeholders, including Central Ministries, Regulators,
State Governments, District Administration, Local Bodies, and Trade and Industry
Associations. To ensure that over 80% of transactions in India switch to the
digital-only platform, a framework for implementation with stringent deadlines
must be established and monitored. To make such transactions between the
government and citizens less expensive than cash-based transactions, the
committee will also attempt to analyse the costs associated with various digital
payment choices and supervise the implementation of these measures.
 The Pradhan Mantri Jan Dhan Yojana, one of the largest global projects for
financial inclusion, was introduced in 2014. The goal of this national mission on
financial inclusion is to provide banking services to every household in the nation
and to achieve comprehensive financial inclusion. With the help of this
programme, everyone will have access to several financial services, including
basic savings accounts, bank accounts, need-based credit, insurance, and pensions.
It has been crucial in helping the underprivileged get bank accounts.

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The following are the steps that a few worldwide economies have taken to transition to a
cashless society.

Sweden: The most aggressive approach to going cashless is taken in Sweden. Only 20%
of all purchases in Sweden are cash transactions, and many Swedish retailers do not
accept cash. Swish is another well-known payment tool that permits quick money
transactions between users.

A variety of policies have been implemented in Sweden to promote cashless transactions,

including the removal of ATM infrastructure, the establishment of real-time payments
and e-KYC capabilities, and the power of establishments to refuse cash. With the value-
added tax rising by roughly 30% over five years, there has been a tangential impact on
the rise in tax receipts.

Poland: The public-private foundation in Poland wants to make cashless transactions

more commonplace there. To encourage company owners to accept cashless payments,
the foundation provides free point-of-sale (POS) devices through partner banks. Over
200,000 businesses have already received assistance from the foundation to begin
accepting cards and mobile payments.

South Korea: After adopting end-of-year tax rebates for up to 30% of debit card
expenditure, South Korea observed an acceleration in the use of digital payments.

Australia: To address the high cost of digital payments, the Reserve Bank of Australia
has imposed a cap on interchange fees and a cap on card surcharges for small firms. The
changes caused merchant payment costs to drop by $11 billion and card transaction
growth to pick up speed. An 8% increase in credit card usage followed a similar cap in
the US in 2011.

Cashless Effect

Our propensity to be more inclined to pay when no actual money is involved in a

transaction is known as the "cashless effect." The implication is that we are more likely
to use a credit card to make a buy than cash.

Elizabeth Hirschman, a prominent economist, and a theorist in marketing, was the first to
have researched and analysed the cashless effect in 1979. Hirschman was curious about
how people spent their money because he thought it may provide insight into consumer

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spending patterns. She thought that when paying with a credit card as opposed to cash,
individuals would spend more. To perform her research, Hirschman gathered information
from surveys of customers who visited several department store chain locations.

The cashless effect implies that digitised transactions drive us to alter our purchasing
patterns, signalling a shift in how we conduct our transactions. When our only access to
money is through a digital medium, we tend to be considerably more careless with it.
Because it is more complicated for us to comprehend the worth of money when it is not
physical, we frequently make huge purchases using our credit cards. The cashless effect
can swiftly lead to the debt since we end up spending more than we have. Additionally,
platforms target us with ads based on past purchases, encouraging us to spend more. This
shows how the cashless effect may easily trap us in a loop of excessive spending.

Essentially, a "cashless society" currently dominates the majority of the developed world.
Although there have always been "cashless societies" where commodities are exchanged
instead of money, the word has recently come to indicate something different. The most
recent development in our shift away from using currency entirely is Bitcoin.

In light of the COVID-19 epidemic, the ubiquity of using digital platforms for payments
has only grown, with many merchants explicitly banning cash transactions out of concern
that the virus could spread through the exchange of money. When those who are driven
to overspend have no money, the cashless effect becomes a serious issue. Due to the
digital nature of transactions, people occasionally find themselves unable to recoup their
extra spending. This has detrimental effects on individuals, but it can also increase the
expense of healthcare for the federal government because stress brought on by debt and
financial difficulties can be very high.

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 REVIEW OF LITERATURE

I. Hasan, Tania De Renzis & Heiko Schmiedel (2012) ’s research study provides
materials to help develop a review of literature that includes theoretical research on the
effects of cashless turnover on the economy as well as the outcomes of recent empirical
studies on this subject, and a large number of reports demonstrating that cashless turnover
has a beneficial impact on the economy. Cashless transactions and economic growth were
positively associated. They evaluated data from 27 nations between 1995 and 2009 to
assess the connection between retail payments and overall economic development. Their
research outcomes have indicated that electronic retail transactions (e-payments)
motivate overall economic growth, consumption and trade. A payment that is initiated,
executed, and received electronically is referred to as an e-money payment.

Jashim Khan & Margaret Craig-Lees (2014) ’s research paper titled “Cashless’
transactions: the effect on purchase behaviour” revealed that when a credit card-based
payment is used, the volume, value, type of products purchased and the velocity of money
that is transaction rates increase very heavily. This is due to the credit element, or the
cashless element of the transaction, and due to many benefits, the credit card companies
provide on spending more like cash backs and free vouchers make people spend more
thus increasing the velocity of money with a high rate. The notion that the tangibility of
cash influences perceptions is not novel, but it is untested. The perception may well have
a direct impact on purchase behaviours.

Preeti Garg & Manvi Panchal (2016) ’s paper shed light on people's opinions towards
India's cashless economy. According to respondents' responses, a cashless economy will
aid in curbing black money, fraudulent and forged currency, terrorism and cash-related
robberies while also promoting our nation's economic progress. Cyber fraud, a significant
percentage of illiteracy, people's attitudes, and a lack of efficiency in the digital payment
system are some of the main obstacles that could prevent the implementation of the
policy. According to the report, India's move toward a cashless economy is a positive
development. It aids in the expansion and improvement of India's economy.

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Thabani Nyoni & Wellington Garikai Bonga (2017) talked about how Zimbabwe's
move toward a cashless society is an opportunity rather than a difficulty, despite the fact
that it was suggested by the invisible hand's actions to address the cash crisis that is ailing
the country's economy. This study mainly uncovers the implications of a cashless
economy in Zimbabwe. The report provided various policy recommendations that are
intended to enhance Zimbabwe's cashless economy. The economy can become more
financially advanced and business transactions can run more smoothly by pr omoting
financial literacy among underdeveloped sectors and the general public. The report has
also urged the use of sophisticated audit procedures to keep an eye on electronic
transactions and ward off potential fraud. To fully benefit from a cashless eco nomy, the
Reserve Bank and other financial institutions that link money creation to reserves and
productivity levels must exercise financial restraint.

Mrunal Joshi (2017), in her explanatory research paper remembered: On July 2, 2015,
our Honourable Prime Minister Shri Narendra Modi inaugurated the Digital India
Campaign. Digital India's stated mission is to be "Faceless, Paperless, Cashless." The
government has started using various digital payment systems to enable cashless as part
of the Digital India Campaign. To establish a cashless economy, which is necessary in
today's world for developing nations like India, some new, as well as some old payment
methods, were advocated as part of the digital payment system. This research study is an
attempt to evaluate the trends in the last three years used among numerous digital
transaction methods, including NFS Inter-Bank ATM Cash Withdrawal, NACH, CTS,
IMPS, AEPS, BBPS, UPI, BHIM(UPI), and NETC.

S. Agarwal, Wenlan Qian, Bernard Yin Yeung & Xin Zou (2018)’ s research
interprets how the introduction of mobile wallet payment technology in 2017 impacted
business growth by utilising mobile wallet and card transaction data from a prominent
Singaporean bank. Following the launch of the new technology, the use of mobile wallets
doubled, and the increased ease of making payments had a big knock-on effect. In
comparison to large retailers, small businesses had a monthly increase in debit and credit
card sales of 3.5 percent (3.4 percent). The payment technology facilitated customer
acquisition, which boosted sales growth, especially for new enterprises.

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Neelu Tiwari & Naveen Kumar Singh (2019), with the massive adoption of information
and communication technology, in the field of digital payment systems, their research is
not the first one to test consumer consumption habits due to cashless payment systems
but is one of them. The primary objective of this current research st udy was to identify
the factors affecting the adoption of cashless payment services and consumer satisfaction
in India through a survey method. The study presents a model to enhance customer
satisfaction rates concerning e-wallets in India. Through analysis, it is found that BHIM
is a more secure platform than Paytm and other FinTech wallet companies working in
India since it is a government-owned platform. However, Paytm aids in providing an
instant solution to problems but has a few disadvantages.

Mahesh A. & Ganesh Bhat. (2021) explained in their study how Demonetization and the
"Digital India" efforts have given the Indian banking sector more momentum as they
strive hard to spread the use of digital payments. The "Unified Payment Interface (UPI)"
was developed and launched by the "National Payment Corporation of India (NPCI)" to
assist with digital payments. Unified Payment Interface (UPI), a potentially ground-
breaking method of transmitting money using a virtual payment address set up by the
National Payment Corporation of India, aims to create a paperless and cashless economy
(NPCI). Therefore, it must be evaluated for its potential to help achieve the digital
economy. The emergence and advancement of the Unified Payment System (UPI) in retail
digital payment over time is the main focus of this research paper. Secondary data sources
were reviewed, and the SWOT (Strengths, Weaknesses, Opportunities, and Threats)
analysis approach was used to conduct the research. This study analyses UPI's place in
the digital payment ecosystem with an emphasis on highlighting UPI's fundamental
strengths and future growth prospects as well as potential sectors for intensive analysis
to delve into the entire Indian e-payment ecosystem.

D. Padmavathi, Monisha Matanjini. I & Aryashree. B (2021) explained in their study

how with the help of various developments in electronic payment systems, it created
various options for consumers. The purchase habits of consumers are influenced by a
variety of factors. However, a foundation for it is provided by the digital revolution and
its significance from a social and consumer perspective. This research illustrates how

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consumers behave when making purchases in light of the progressive transition from cash
to cashless transactions. This paper attempts to emphasise the use of cashless transactions
and how it affects customer behaviour.

Shruti Jose & Ganesh Lakshmanan (2022) talked about how digital payments,
nowadays, are imperative as a result of swift technical improvements. The primary
objective of any national payment system is to maintain smooth money circulation. Since
more and more individuals throughout the world are adopting cashless payments, cash
has fallen out of favour. This article aims to provide information on the advantages of
using cashless transactions as well as the types of purchases made with them. The results
of the study demonstrate that those who use cashless payments have more varied spending
habits and are more conscious of the advantages of doing so. The findings highlight the
prolonged need to give consumers compelling motives for exercising cashless payments
through a variety of usable alternatives and incentives.

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 RESEARCH OBJECTIVES

 To understand the cashless payment systems among consumers of age 18 & above
 Impact of cashless payment systems on consumer consumptions.
 To understand whether the widespread use of cashless payments alleviate or
depress the frequency of the usage of cashless payments
 Influence of cashless payment systems on consumer spending behaviour.

RESEARCH QUESTIONS

 How do you think consumers of age 18 & above are influenced by the different
cashless or digital payment methods?
 How do you think consumer consumptions are affected by the impact of cashless
payment systems?
 Will the widespread use of cashless payments alleviate or depress the frequency
of the usage of cashless payments?
 How do you think consumer spending behaviour or consumer expenditure is
influenced by cashless payment systems?

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 RESEARCH METHODOLOGY

Research Methodology is the specific techniques or strategies used to acquire, gather,

process, and analyse information on a subject. The research was conducted to understand
the adoption of cashless payments by consumers from different demographic
backgrounds. The principal objective of this particular study was to figure out whether
socioeconomic factors such as income, basic habits, cashback and coupons, tax
compliance, etc influence consumer behaviour concerning cashless payments.

The data source was primary, wherein the facts, figures and other information were
assembled through a brief online questionnaire. The data gathered was a mix of
quantitative and qualitative data. Quantitative data is information that is expressed as
counts or numbers, each of which has a distinct numerical value whereas the descriptive
and conceptual findings that describe traits or features are known as qualitative data. A
total of 136 respondents comprising 87 males (64.0%), 48 females (35.3%) and others
(0.7%), all aged 18 years or above answered the questionnaire available in the structure
of a google form that was circulated online.

To analyse the collected data, statistical tools including percentages, mean scores and
ANOVA (Analysis of Variance) were used. ANOVA is a statistical method used to
determine whether the means of two or more groups differ from one another significantly.
It compares the means of various samples to examine the influence of one or more factors.

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 RESULT & ANALYSIS

Demographic Profiles of Respondents

Various demographic factors or variables such as Gender, Age, Profession, Monthly

Family Income and Monthly Individual Expenditure are compiled together as respective
profiles of the respondents and presented below in terms of percentage.

Table 1. Demographic Profiles of Respondents

Demographic Variables Frequency (f) Percentage Cumulative

(%) Percentage
Females 48 35.3 35.3
Gender Males 87 64.0 99.3
Prefer not to say 01 0.7 100
Total 136 100
18 – 25 112 82.4 82.4
25 – 35 12 8.8 91.2
Age 35 – 45 05 3.7 94.9
45 or above 07 5.1 100
Total 136 100
Student 112 82.1 82.1
Employed 17 12.7 94.8
Profession/ Business 04 3.0 97.8
Occupation Homemaker 03 2.2 100
Retired 0 0 100
Total 136 100
Less than 15000 20 14.5 14.5
INR 15000 – 23 16.8 31.3
40000
Monthly INR 40000 – 39 29.0 60.3
Family 80000
Income More than 80000 54 39.7 100
Total 136 100
Less than 10000 24 17.4 17.4
INR 10000 – 52 38.6 56.0
25000
Monthly INR 25000 – 27 19.7 75.7
Individual 40000
Expenditure More than 40000 33 24.3 100
Total 136 100

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 Figure 1. Demographic Profiles of Respondents

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Analysis: The cashless economy has currently become more extensive and ubiquitous in
and around India. Through the data gathered in this particular study, the silhouettes of the
respondents are developed concerning the various demographic variables and therefore,
reveal that 64% of them were male and 35% of them were female. A large percentage of
the respondents, 82.4%, belonged to the age group of 18 – 25. Most respondents, 39.7%,
have a monthly family income of more than INR 80000 whereas around 38.6% of them
have an approximate individual expenditure of INR 10000 – 25000.

Most Preferred Mode of Payment after COVID – 19

Modes of payment categorising into Cash, UPI, E-wallets/Mobile wallets, Net banking,
Credit/Debit Cards and Cheques favoured by respondents of different profiles have been
segregated and put in terms of percentage.

Table 2. Most Preferred Mode of Payment after COVID – 19

Modes of Payment Frequency (f) Percentage (%)

Cash 19 14.0
UPI 82 60.3
E-wallets/Mobile wallets 14 10.3
Net banking 12 8.8
Credit/Debit Cards 08 5.9
Cheques 01 0.7
Total 136

Analysis: The maximum number of participants prefer UPI – a rather common mode of
cashless or digital payments, the percentage being 60.3%. The most preferred mode of
payment is followed by cash (14.0%), E-wallets (10.3%), net banking (8.8%), credit/
debit cards (5.9%), and last but not least, cheques (0.7%).

Reasons for choosing ‘CASH’ & ‘CASHLESS’ Payments

The respondents select their respective basis, motive or reasons for choosing Cash and
Cashless payments termed as Alternatives. Mean is calculated here to figure out the
average number of respondents selecting the specific alternatives.

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 Table 3. Reasons for choosing ‘CASH’ Payments

Alternatives Frequency Average Percentage Cumulative

(f) (%) Percentage
(a) Acceptance of cash 48 35.3 35.3
only
(b) Ease of payment 44 32.6 67.9
Mean (= Σf/2) = 45
(c) Habit 36 Average of 26.4 94.3
f; (b) & (c)
40
Mean (= Σf/3) = 42.67
(d) Better Expenditure 29 Average of 21.3 115.6
Control f; (c) & (d)
32.5
Mean (= Σf/4) = 39.25
(e) Not shown in bank 17 Average of 12.4 128
transaction statement f; (d) & (e)
23
Mean (= Σf/5) = 34.8
(f) Other 03 Average of 2 130
f; (e) & (f)
10
Mean (= Σf/6) = 29.5

Figure 2. Reasons for choosing ‘CASH’ Payments

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 Table 4. Reasons for choosing ‘CASHLESS’ Payments

Alternatives Frequency Average Percentage Cumulative

(f) (%) Percentage
(a) Convenience of not 63 46.3 46.3
carrying cash
(b) Faster & safer 54 39.7 86
Mean (= Σf/2) 58.5
(c) Absence of change or 49 Average of 36 122
cash return by the f; (b) & (c)
shopkeeper
51.5
Mean (= Σf/3) 55.33
(d) Easy to track 46 Average of 33.8 155.8
transactions in bank f; (c) & (d)
statements
47.5
Mean (= Σf/4) 53
(e) More Cashbacks/ 28 Average of 20.6 176.4
Offers/ Discounts/ f; (d) & (e)
Freebies/ Gift coupons/
Promo codes
37
Mean (= Σf/5) 48
(f) Other 02 Average of 1.6 178
f; (e) & (f)
15
Mean (= Σf/6) 40.33

Figure 3. Reasons for choosing ‘CASHLESS’ Payments

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Analysis: It is clear from the above tables and figures that the majority of the respondents
opt for ‘CASH’ payments because of their extensive use and vast acceptance of cash
(35.3%). Ease of payment (32.6%), habit (26.4%) and better expenditure control (21.3%)
also provide significant reasons for choosing ‘CASH’ payments.

The mean [MEAN (=Σf/6)] calculated was 29.5, indicating 30 out of 136 participants use
‘CASH’ payments on grounds of all six alternative reasons.

Similarly, the majority of the respondents opt for ‘CASHLESS’ payments because of the
sheer convenience of not carrying physical money, that is, cash (46.3%). These payments
are also much faster and safer compared to ‘CASH’ payments, therefore being an
important intention (39.7%). Other significant reasons for choosing ‘CASHLESS’
payments are the absence of change or cash return by the shopkeeper (36%), the ease of
tracking transactions in bank statements (33.8%) and the availability of more cashbacks/
offers/ discounts/ freebies/ gift coupons/ promo codes etc (20.6%).

The mean [MEAN (=Σf/6)] calculated was 40.33, indicating 40 out of 136 participants
use ‘CASHLESS’ payments on grounds of all six alternative reasons.

Use of Digital wallets/ Digital payment methods for making transactions

Respondents select options implying the use of different cashless/ digital payments put
down in an ascending order starting with ‘ALWAYS’ and concluding with ‘NEVER’.

ANOVA is used in order to analyse the differences in the use of the below contrasting
digital payment methods of the respondents. Table 6 shows the results of the analysis of
variance (ANOVA) test that was developed based on the data gathered through the
responses of the participants.

Table 5. Use of Digital payments for making transactions

Digital Payments Always Often Occasionally Never

Banking Cards 09 33 73 21
[in percentage (%)] 6.1 24.6 53.5 15.8

UPI 53 59 15 09
[in percentage (%)] 38.9 44.3 10.7 6.1

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 E-wallets/ Mobile wallets 10 35 43 48
[in percentage (%)] 7.7 25.6 31.6 35.1
Internet Banking 12 20 58 46
[in percentage (%)] 8.8 14.9 43 33.3

Table 6. Use of Digital payments for making transactions – ANOVA (Single)

SUMMARY
Groups Count Sum Average Variance
Always 4 84 21 456.6667
Often 4 147 36.75 264.25
Occasionally 4 189 47.25 612.25
Never 4 124 31 366

ANOVA
Source of Sum of Df Mean f P - value
Variation Squares Square
Between groups 1444.5 03 481.5 1.133497 0.374689
Within groups 5097.5 12 424.7917

Total 6542 15
Level of Significance = 5%

Figure 4. Use of Digital payments for making transactions

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Analysis: Majority of the respondents use banking cards ‘OCCASIONALLY’ (53.5%),
UPI ‘OFTEN’ (44.3%), e -wallets/ mobile wallets ‘NEVER’ (35.1%) and internet banking
‘OCCASIONALLY’ (43%).

The one – way ANOVA was performed to compare the differences in the use of the above
cashless payment methods based on the data gathered from the responses. As the f value
is almost insignificant, therefore, there is hardly any difference in the usage of different
cashless payment methods.

Separate Bank Accounts for Online Transactions

Categorising the respondents in terms of percentage to understand whether separate bank

accounts for specific transactions are prevalent or not.

Table 7. Separate Bank Accounts for Online Transactions

Separate Bank Accounts Frequency (f) Percentage (%)

Yes 32 23.7
No 79 57.8
Don’t want to reveal 25 18.5
Total 136

Analysis: The maximum number of the respondents do not have separate bank accounts
for making online transactions (57.8%). A considerable number of participants do have
separate bank accounts for specific online transactions (23.7%).

Preferable Mode of Payments while categorising the different Types of Expenses

Respondents select alternatives among the preferable modes of payments under the
different types of expenses such as Day-to-day, Travelling, Medical, Online & Offline
shopping, Restaurant dining and Entertainment & Communication expenses.

ANOVA is used in order to analyse the differences in the choices of the respondents in
payment for different types of expenses. Table 9 shows the results of the analysis of
variance (ANOVA) test that was developed based on the data gathered through the
responses of the participants.

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 Table 8. Preferable Mode of Payment in below categories

Different Types of Banking UPI E-wallets/Mobile Internet

Expenses Cards wallets Banking
Day-to-Day Expenditure 06 94 33 03
[in percentage (%)] 4.1 69.5 24 2.4
Travelling Expenses 35 77 20 04
[in percentage (%)] 25.4 56.7 14.3 3.6
Medical Expenses 50 61 17 08
[in percentage (%)] 36.7 45.2 12.4 5.7
Online Shopping 33 70 20 15
[in percentage (%)] 24.1 51.4 14.4 10.1
Offline Shopping 34 80 19 03
[in percentage (%)] 25.1 58.5 13.8 2.6
Restaurant Dining 38 77 15 06
[in percentage (%)] 28.4 56.6 10.8 4.2
Entertainment & Comm. 20 89 16 11
[in percentage (%)] 14.7 65.3 11.4 8.6

Table 9. Preferable Mode of Payment in below categories – ANOVA (Single)

SUMMARY
Groups Count Sum Average Variance
Banking Cards 7 216 30.85714286 197.4761905
UPI 7 548 78.28571429 122.5714286
E-wallets/ 7 140 20 36.66666667
Mobile wallets
Internet 7 50 7.142857143 20.47619048
Banking

ANOVA
Source of Sum of df Mean Square f P - value
Variation Squares
Between Groups 20218.7143 03 6739.571429 71.47127888 4.15555E-12
Within Groups 2263.14286 24 94.29761905

Total 22481.8571 27
Level of Significance = 5%

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 Figure 5. Preferable Mode of Payment in below categories

Analysis: Majority of the respondents use the option or alternative ‘UPI’ among all the
preferable modes of payment for different types of expenses categorising as Day-to-day
expenditure (69.5%), Travelling expenses (56.7%), Medical expenses (45.2%), Online
(51.4%) & Offline (58.5%) shopping, Restaurant dining (56.5%) and Entertainment &
Communication (65.3%) expenses.

The one – way ANOVA was performed to compare the differences in the use of different
modes of payment for different types of expenses based on the data gathered from the
responses of the participants. As the f value is huge, therefore clearly, there is a significant
variation and contrast in the usage of different modes of payment for differe nt types of
expenses by the participants of this study.

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Challenges around Cashless Payments

Security (the risk of identity theft), Poor internet connectivity, Lack of tech knowledge,
Merchant acceptance and Transaction costs are some of the most widely confronted
challenges around cashless payments.

Table 10. Challenges around Cashless Payments

Challenges Frequency Percentage Cumulative

(f) (%) Percentage
Security (the Risk of Identity Theft) 33 24.1 24.1
Poor Internet Connectivity 55 40.9 65
Lack of Tech Knowledge 9 6.7 71.7
Merchant Acceptance 27 19.6 91.3
Transaction Costs 12 8.7 100
Total 136 100

Analysis: One of the challenges around cashless payments with a considerable range
evolved to be ‘Poor Internet Connectivity’ (40.9%), followed by other challenges such as
Security (the Risk of Identity Theft) (24.1%), Merchant Acceptance (19.6%), the
Transaction Costs (8.7%) and ultimately, the Lack of Tech Knowledge (6.7%) based on
the data collected.

Self-Assessment of Knowledge in Finances and Form of Payment

Categorising the respondents in terms of percentage to understand whether there is

enough awareness among the respondents and therefore, self-assess their respective
knowledge in finances and form of payment.

Table 11. Self-Assessment of Knowledge in Finances and Form of Payment

Self-Assessment of Frequency Percentage

Knowledge in Finances (f) (%)
Good 34 24.8

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 Very Good 24 17.2
Have a general understanding 59 43.7
Hard to say 15 11.1
Poor 04 3.2
Do not know financial matters at all 0 0
Total 136

Analysis: The maximum number of the respondents have a general understanding in

finances (43.7%). A considerable number of participants have moderately good
knowledge in finances (24.8%).

Attitude towards form of Cash and Cashless Payments

Categorising the respondents in terms of percentage to understand the respective attitude

of and among the participants towards cash and cashless payments.

Table 12. Attitude towards form of Cash and Cashless Payments

Attitude towards form of Frequency Percentage

Cash & Cashless Payments (f) (%)
I prefer to pay cashless but sometimes I use cash 62 45.9
I prefer to pay cashless and pay by cash only when 42 30.7
there is no other option
I definitely prefer to pay cashless and I could 4 2.7
definitely pay without cash
I am paying by cash but I am willing to change it 12 9.1
I am paying by cash and I do not intend to change it 16 11.6
Total 136

Analysis: The maximum number of the respondents ‘prefer to pay cashless but sometimes
use cash’ (45.9%). A considerable number of participants ‘prefer to ay cashless and pay
by cash only when there is no other option’ (30.7%).

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 APPENDIX: QUESTIONNAIRE

 Gender
 Age
 Profession/ Occupation
 Monthly Family Income
 Monthly Individual Expenditure
 Most Preferred Mode of Payment after COVID – 19
 Reasons for choosing Cash Payments
 Reasons for choosing Cashless Payments
 How often do you use Digital wallets/Digital payment methods for making
transactions?
a. Banking Cards
b. UPI
c. E-wallets/ Mobile wallets
d. Internet Banking
 Do you have separate bank accounts for making online transactions?
 Which mode of cashless payment do you prefer more in these categories?
a. Day-to-day Expenditure
b. Travelling Expenses
c. Medical Expenses
d. Online shopping
e. Offline shopping
f. Restaurants
g. Entertainment & Comm.
 Challenges around Cashless Payments
 Self-assessment of knowledge in Finances and form of payment
 Attitude towards form of Cash and Cashless Payments

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