PROJECT REPORT

A STUDY ON SCOPE AND CHALLENGE

OF ONLINE PAYMENT SYSTEM
Submitted in the partial fulfillment of requirement for the
Award of degree of master of business Administration

Under supervision of Submitted by

Mrs. Ranjana Katyal Priya
Roll No. 20035701029

|
DEPARTMENT OF MANAGEMENT STUDIES
J.C BOSE UNIVERSITY OF SCIENCE AND
TECHNOLOGY ,YMCA ,FARIDABAD-121106

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 Declaration

I, Priya of MANAGEMENT DEPATMENT OF NGF COLLEGE OF

ENGINEERING , PALWAL hereby submit this report in partial fulfillment of
the requirement for the award of degree of MBA . I declare that the work
presented in this report is my original and is not submitted anywhere else for
the award of any other degree / diploma by any other university. To the best
of my knowledge and belief , this report contains no material previously
published or written by any other person, except where due reference is made.

( Signature of student )
Name of student

(seal / stamp of the Department / institute

.

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 ACKNOWLEDGEMENT

I would like to sincerely appreciate to the individuals who give me guidance, advices, opinions and
support throughout the entire research project. Thus, I only can complete my research efficiently and
effectively. The project entitled “A STUDY ON SCOPE AND CHALLENGES OF ONLINE
PAYMENT SYSTEM” was a challenging assignment for me and required an improved
environment, extensive endeavor and all necessary guidance and support. I take this opportunity Mr.
Neeraj Chopra my faculty guide who has always given a right way to accomplish the report and
also provided some valuable ideas and suggestion to enhance me to complete the research smoothly
and successfully.
The teachers of Department of Management Studies Dr. Manpreet Kaur and Mrs. Ranjana
Katyal 0who all have given different ideas to make more presentable report with different tools and
techniques of research methodology.
Moreover, I would like to appreciate to my college, especially Mr. Ashwani Prabhakar (CEO,
NGFCET, Palwal) and Dr. Sharat Kaushik (Director-principal), NGFCET, Palwal) for giving me
this valuable opportunity to carry out this research project before I graduate from the university. I
have gained a lot of experience, knowledge and information which are related to carry out the
research. Otherwise, we would also like to thanks for our classmates for their coordination, valuable
assistance and sharing knowledge about the research project and also their supportive actions.
Therefore, this can help us carried out our research project more easily and running smoothly.

PRIYA

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 TABLE OF CONTENTS

CHAPTER TOPICS PAGE NO.

CHAPTER 1 INTRODUCTION 7

LITERATURE REVIEW 40

CHAPTER 2 RESEARCH METHODOLOGY 43

2.1 OBJECTIVE OF THE STUDY 44

2.2 SAMPLING METHOD 45

2.3 RESEARCH DESIGN 45

2.4 DATA COLLECTION TOOLS 46

2.5 LIMITATIONS OF THE STUDY 47

CHAPTER 3 DATA ANALYSIS & INTERPRETAION 48

CHAPTER 4 CONTRIBUTION & LEARNING 70

4.1 FINDINGS 71

4.2 RECOMMENDATIONS 72

4.3 CONCLUSION 73

4.4 BIBLIOGRAPHY 74

4.5 APPENDICES 75

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 LIST OF FIGURES
S.NO TITLE PAGE NO.

1.1 E-PAYMENT 7

1.2 INTRODUCTION ONLINE PAYMENT 8

1.3 FEATURES OF EPS 9

1.4 DISADVANTAGES OF EPS 10

1.5 MODES OF EPS 13

1.6 CREDIT CARD PROCESSING 17

1.7 PRESENT RTES OF PAYMENT 18

1.8 UPI VS OTHER PAYMENT METHODS 31

1.9 UPI GROWTH 34

1.10 STATISTICS OF EPS IN 2015 AND 2020 36

1.11 PROCESSING A PAY,EMT CARD ORDER 37

1.12 COMPONENTS INVOLVED IN ONLINE PAYMENT 38

1.13 ELEMENTS OF PROCESS 39

3.1 DATA ANALYZIS AND INTERPRETATION 49

LIST OF TABLES
S.NO TITLE PAGE NO.

1 GENDER OF THE RESPONDENTS 50

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2 AGE OF THE RESPONDENTS 51

3 PROFESSION OF THE RESPONDENTS 52

4 INCOME OF THE RESPONDENTS 53

5 NO. OF RESPONDENTS WHO HAVE USED EPS 54

6 NO. OF RESPONDENS WHO OFTEN USED EPS 55

7 REASONS OF RELUCTANT OF ONLINE RETAILING 56

8 MODE OF PAYMENT 57

9 CONVENIENT WAY OF PAYMENT 58

10 REASONS FOR USING EPS 59

11 SECURITY MEASURES FOR EPS 60

12 EPS MAKES LIFE EASIER 61

13 TRUST ON EPS 62

14 OVERALL ANALYZIS OF EPS 63

15 USERS WHO USING EPS FOR PERSONAL 64

TRANSACTIONS
16 BALANCE ENQUIRY FACILITY 65

17 ONLINE BILL PAYMENT SYSTEM 66

18 EPS GIVES MORE REVENUES THAN TRADITIONAL 67

SYSTEM
19 PURPOSE OF USING EPS 68

20 CONTRIBUTION TO SUCCESS 69

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 Chapter – 1

“INTRODUCTION”
E-payment

Information
online
offline
$

Products/services

FIG NO. 1

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 E-PAYMENT SYSTEM

FIG No. 2
INTRODUCTION:
The payment system in any country needs to pass the litmus test of safety, security, soundness,
efficiency, and accessibility. In order to address all these, payment systems have evolved from
barter to currency, to digital systems. We are witnessing enormous change in the payment
systems, disrupting the monopoly of physical/paper-based system by electronic ones. 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.

What is Online Payment?

Online payment is when the customer or buyer makes his payment transactions for the goods or
services purchased with the use of the Internet – to be online. “This type of payment lowers the
costs for businesses as the more payments made electronically (online or offline) the less they
spend for paper and postage.

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DEFINITION:-
Electronic Payment is a financial exchange that takes place online between buyers and sellers.
The content of this exchange is usually some form of digital financial instrument (such as
encrypted credit card numbers, electronic cheques or digital cash) that is backed by a bank or an
intermediary, or by a legal tender.

FEATURES OF ELECTRONIC PAYMENTS SYSTEM:-

FIG No. 3

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ADVANTAGES OF DIGITAL PAYMENTS:-
1. Pay or send money from anywhere: With digital payment modes, you can pay
from anywhere anytime.
2. Discounts from taxes: Government has announced many discounts to encourage
digital payments.
3. Written record: you do not need to note your spendings every time with digital
payments. These are automatically recorded in your passbook or inside your E-Wallet
app.
4. Less Risk: Digital payments have less risk if you use them wisely. If you lose your
mobile phone or debit/credit card or Aadhar card you don’t have to worry a lot.

DISADVANTAGES OF ELECTRONIC PAYMENTS:-

Disadvantages from a customer’s Disadvantages from a store’s perspective
perspective

Payments are easy, so a customer may impulse Stores have to pay commission for electronic
buy and regret it. payments to the company being used to make
the payments
There is danger in entering card details that Stolen credit cards may be used to pay for
they will fall in to the wrong hands and be used products or service. It is the seller of goods and
fraudulently services who has to bear the cost of fraudulent
transactions.
Not everyone has a computer or internet access There needs to be procedures in place to ensure
the security and privacy of customer’s data
example- credit and debit card details.
Erosion of privacy as more companies hold Is is quite expensive to set up a payment
data about you and what you buy system.

FIG NO. 4

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USES OF E-PAYMENT:-

Electronic Payment is a financial exchange that takes place online between buyers and sellers.
The content of this exchange is usually some form of digital financial instrument (such as
encrypted credit card numbers, electronic cheques or digital cash) that is backed by a bank or an
intermediary, or by a legal tender. The various factors that have lead the financial institutions to
make use of electronic payments are:

 Decreasing technology cost:

The technology used in the networks is decreasing day by day, which is evident from the fact
that computers are now dirt-cheap and Internet is becoming free almost everywhere in the world.

 Reduced operational and processing cost:

Due to reduced technology cost the processing cost of various commerce activities becomes very
less. A very simple reason to prove this is the fact that in electronic transactions we save both
paper and time.

 Increasing online commerce:

The above two factors have lead many institutions to go online and many others are following
them.
 Affecting the consumers:
Credit cards, Debit Cards, ATMs (Automated Teller Machines), Stored value cards, E-Banking.

 Enabling online commerce:

Digital Cash, E-Cash, Smart cards (or Electronic Purse) and encrypted Credit cards.

 Affecting Companies:
The payment mechanisms that a bank provides to a company have changed drastically. The
Company can now directly deposit money into its employee’s bank account. These transfers are
done through Automated Transfer Houses.

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TYPES OF ELECTRONIC PAYMENT SYSTEMS:-

Electronic payment systems are proliferating in banking, retail, health care, online markets, and
even government—in fact, anywhere money needs to change hands. Organizations are motivated
by the need to deliver products and services more cost effectively and to provide a higher quality
of service to customers. The emerging electronic payment technology labeled Electronic Funds
Transfer (EFT).
EFT is defined as ―any transfer of funds initiated through an electronic terminal, telephonic
instrument, or computer or magnetic tape so as to order, instruct, or authorizes financial
institution. EFT can be segmented into three broad categories:

1. Banking and financial payments

 Large-scale or Wholesale payments (e.g., bank-to-bank transfer)
 Small-scale or Retail payments (e.g., automated teller machines)
 Home banking (e.g., bill payment)

2. Retailing payments
 Credit Cards (e.g., VISA or MasterCard)
 Private label credit/debit cards (e.g., J.C. Penney Card)
 Charge Cards (e.g., American Express)

3. On-Line Electronic Commerce payments

 Token-based payment systems
 Electronic cash (e.g., Digital Cash)
 Electronic checks (e.g., Net Cheque)
 Smart cards or debit cards (e.g., Electronic Currency Card))
 Credit card-based payments systems
 Encrypted Credit Cards (e.g., World Wide Web form-based encryption)
 Third-party authorization numbers (e.g., First Virtual)

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MODES OF PAYMENTS:

FIG NO. 5

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. As part of promoting cashless
transactions and converting India into less-cash society, various modes of digital payments are
available.
 E Wallets – Paytm, Freecharge etc.
 UPI – Unified payments Interface Apps
 Plastic Money – Debit/Credit Cards
 Net Banking – Online Fund Transfer
 Aadhaar Card – Aadhaar Enabled Payment System

1. E-Wallets:-

There are also many other electronic wallets available in app stores like google play. You can
download any of them to make digital payments easily. They include jio money, Vodafone my
pesa & airtel money. Even banks have launched their own e wallet apps like State bank buddy
and Yes Pay.

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The main objective of e-Wallet is to make paperless money transaction easier. The electronic
wallet (e-Wallet) is just like a leather wallet as it does the same, in terms of e-cash. In today’s
life where monetary value and security both, go hand in hand, it is difficult to satisfy customers
using the routine cards.

FEATURES OF E–WALLET:
 More than 40 years of data retention
 Firewall encrypted security logic
 Compatible with many supporting hardware.
 No separate card reader is required to access our card.
 Polarity reversal indicator is pre-built in our card.
 Reusability of our card is unlimited.
 Multiple card features are incorporated in the same card.
 Infinite lifetime
 Current balance can be stored and read
 User authentication is provided
 Universal access
 Maximum possible cash
 Cannot be duplicated

ADVANTAGES OF E-WALLET:-
1. Ease of use:-
 Withdraw or deposit value by telephone
 Pay the exact amount, no fiddling for change
 No signature required
 Immediate payment
 In the future, access points may include mobile phones

2. Accessibility and convenience:-

 Cash machines and telephones give more access points to funds in bank account
 Available 24 hours / 365 days

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  Cash machines and telephones cannot run out of electronic cash

3. Flexibility:
 Transfer value by telephone
 Pay person to person
 For low or high values
 Multi-currency capability
 No age limit, so suitable for all the family

4. Safety and control:

 Spend only what you have
 Read your balance
 Load value at home
 Keep track of what you have spent and where
 Customer is traceable if a lost card is found

2. Unified Payments Interface (UPI)

Unified Payment Interface is an electronic funds transfer instrument that enables all bank
account holders to send and receive money from their smart phones without the need to enter
bank account information or net banking user id/password. This requires only the recipient’s
mobile number or Virtual Payment Address (VPA).

3. Plastic Money:-

Plastic money means debit cards and credit cards that are used at ATM’s for cash withdrawal and
POS machines while shopping. Having a debit or credit cards make you burden free from
carrying cash.

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 A) SMART CARD:-
A smart card, chip card, or integrated circuit card (ICC), is any pocket-sized card with embedded
integrated circuits which can process data. This implies that it can receive input which is
processed — by way of the ICC applications — and delivered as an output. There are two broad
categories of ICCs.
The card is made of plastic, generally PVC, but sometimes ABS or polycarbonate. The card may
embed a hologram to avoid counterfeiting. Using smart cards is also a form of strong security
authentication for single sign-on within large companies and organizations.

SMART CARD APPLICATIONS:-

• Ticketless travel
– Seoul bus system: 4M cards, 1B transactions since 1996
– Planned the SF Bay Area system
• Authentication, ID
• Medical records
• Ecash
• Store loyalty programs
• Personal profiles
• Government
– Licenses
• Mall parking

B) CREDIT CARDS:-

 Credit card provides a card holder credit to make purchase up to amount fixed by a card
issuer.
 In B2C business, it continues to be the most used form of payment system given its high
convenience.
 Entities that involve in the credit card payment system include
- Card holder
- Merchant (seller)

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 - Card Issuer (Your bank)
- Acquirer (merchant’s financial institution
- Card Association (Visa, Master Card etc)
- Third party processor

RISK IN USING CREDIT CARDS:-

 Customer uses a stolen card or account number to fraudulently purchase goods or

service online.
 Family members use bankcard to order goods/ services online, but have not been
authorized to do so.
 Customer falsely claims that he or she did not receive a shipment
 Hackers find the ways into an e-commerce merchant’s payment processing system
and then issue credits to hacker card account numbers.

CREDIT CARD PROCESSING

FIG NO. 6

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 4. Net Banking

Net banking is another way for making transactions electronically. All you need is a bank
account with e banking facility enabled on it. You can transfer funds to others account from the
comfort of your home.
5. Aadhaar Enabled Payment System

Aadhaar Enabled Payment System is a way to get money from the bank account. This system of
getting money neither requires your signature nor Debit card. You don’t even need to visit a
bank branch for getting money through the Aadhaar Enabled Payment System. Rather, it uses
Aadhaar data for the authentication. Like UPI and USSD, this is another initiative by the NPCI.
We began E-Commerce with EDI, this was primarily for large business houses not for the
common man. Many new technologies, innovations have lead to use of E-Commerce for the
common man also. We will now briefly enumerate these innovations based on whom they
affected.

PRESENT RATES OF PAYMENT:-

Amount Rate

Up to Rs 1000/- Rs 5/-

Rs 1001 to 2500/- Rs 10/-

2501 to Rs 5000/- Rs 15/-

Above 5000/- Rs 20/-

FIG NO. 7

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CHALLENGES OF DIGITAL PAYMENTS:-

1. Difficult for a non-technical person:

As most of the digital payment modes are based on mobile phone, the internet and cards.
These modes are somewhat difficult for non-technical persons such as farmers, workers
etc.

2. The risk of data theft:

There is a big risk of data theft associated with the digital payment. Hackers can hack the
servers of the bank or the E-Wallet you are using and easily get your personal
information.

3. Overspending:
You keep limited cash in your physical wallet. Hence, you think twice before buying
anything. But if you use digital payment modes, you have all your money with you
always. This can result in overspending.

4. Intermediaries in the payment process:

The payments sector operates through several intermediaries which create the front-end
payments interface.

FUTURE OF DIGITAL PAYMENTS:-

There are many factors which are affecting the future of digital payments.

1. Digital revolution :-
Digital revolution has provided an easy way to go for digital payments. India has more
than 100 crore active mobile connections and more than 22 crore smart phone users as of
March 2018. This number is going to increase further with a faster internet speed.

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2. Government’s support:-
The government is supporting digital payments a lot. It has reduced some taxes and
announced incentives for digital payments. It has launched Lucky Grahak Yojna for
customers and Digi Dhan Vyapar Yojna for shopkeepers.

3. Go Digital, Get Discounts Service tax:

Waiver of service tax of 15% on digital transactions up to `2,000.

4. Fuel:
0.75% discount on digital purchase of fuel through credit/debit cards, e-wallets or mobile
wallets.

5. Rail tickets:
0.5% discount on monthly and seasonal suburban railway tickets from 1 January 2017.
Online rail ticket buyers get up to `10 lakh free accident insurance too.

6. Rail catering:
5% discount on digital payments for railway catering, accommodation, retiring rooms,
etc.

7. Highway toll:
10% discount on NH toll payment via RFID or fast-tags in 2016-17.

8. Insurance:
10% discount by government general insurers on premium paid online via their portals.
8% discount on new LIC policies bought online via its site. POS: Rs 100 a month is the
maximum rent that PSU banks can charge for POS terminals.

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COMPONENTS THAT MAKE E-PAYMENT SYSTEM:-

1. DATABASE INTEGRATION:-

 An integration database is a database which acts as the data store for multiple
applications, and thus integrates data across these applications (in contrast to an
Application Database). An integration database needs a schema that takes all its client
applications into account.

 Each record should be kept in separate database.

 Each database must be linked together to access from anywhere.

2. BROKERS:-
 The role of electronic brokers facilitates financial transactions electronically.

 The information superhighway directly connects millions of people, each both a

consumer of information and a potential provider. If their exchanges are to be
efficient, yet protected on matters of privacy, sophisticated mediators are
required. Electronic brokers play this important role by organizing markets that
promote the efficient production and consumption of information.

 Electronic brokers will be required to permit even reasonably efficient levels and
patterns of exchanges.

 Their ability to handle complex, albeit mechanical, transactions, to process

millions of bits of information per second, and to act in a demonstrably even-
handed fashion will be critical as this information market develops.

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  Electronic brokers can also run pricing systems, charging and crediting slight
amounts to individual accounts as bits careen along the superhighway.

3. STANDARDS:-
 The e-payment standards enable payment users to link with various networks
and other payment systems.

 Standards for interoperability which enable users to buy and receive information
regardless of which bank is managing their money.

4. PRICING:-
 Payment card networks, such as Visa, require merchants' banks to pay substantial
"interchange" fees to cardholders' banks, on a per transaction basis.

 Consumers make two distinct decisions (membership and usage) whereas

merchants make only one (membership).

5. PRIVACY:-
 Protecting the privacy of evaluators and their information is another important
policy concern of e-payment system.
 Contemporary standards of fairness require that many documents, ranging from
letters to the editor to personnel evaluations, be signed, and that one's accuser be
identified in court.
 Signed evaluations are less likely to be unfair and, over time, people can identify 
trustworthy evaluators.

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PROBLEMS/ ISSUES IN ONLINE PAYMENTS:-

There are also many problems with the traditional payment systems that are leading to its fade
out. Some of them are enumerated below:

1. Lack of Convenience:
Traditional payment systems require the consumer to either send paper cheques by snail-
mail or require him/her to physically come over and sign papers before performing a
transaction. This may lead to annoying circumstances sometimes.

2. Lack of Security:
This is because the consumer has to send all confidential data on a paper, which is not
encrypted, that too by post where it may be read by anyone.

3. Lack of Coverage:
When we talk in terms of current businesses, they span many countries or states. These
business houses need faster transactions everywhere. This is not possible without the
bank having branch near all of the companies offices. This statement is self-explanatory.

4. Lack of Eligibility:
Not all potential buyers may have a bank account.

5. Lack of support for micro-transactions:

Many transactions done on the Internet are of very low cost though they involve data
flow between two entities in two countries. The same if done on paper may not be
feasible at all.

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FACTORS AFFECTING THE USE OF ELECTRONIC
PAYMENTS:-

1. Decreasing technology cost:

The technology used in the networks is decreasing day by day, which is evident from the
fact that computers are now dirt-cheap and Internet is becoming free almost everywhere
in the world.

2. Reduced operational and processing cost:

Due to reduced technology cost the processing cost of various commerce activities
becomes very less. A very simple reason to prove this is the fact that in electronic
transactions we save both paper and time.

3. Increasing online commerce:

E-Commerce was began with EDI, primarily, for large business houses and not for the
common man. Many new technologies, innovations have lead to use of E-Commerce for
the common man also. Some applications are:

4. Consumers:
Credit cards, Debit Cards, ATMs (Automated Teller Machines), stored value cards, E-
Banking.

5. Online commerce:
Digital Cash, E-Cash, Smart cards (or Electronic Purse) and encrypted Credit cards.

6. Companies:
The payment mechanisms that a bank provides to a company have changed drastically.
The Company can now directly deposit money into its employee‘s bank account. These
transfers are done through Automated Transfer Houses.

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REQUIREMENTS OF ELECTRONIC PAYMENT SYSTEM:-

Online payment processing requires coordinating the flow of transactions among a complex
network of financial institutions and processors. Fortunately, technology has simplified this
process so that, with the right solution, payment processing is easy, secure, and seamless for both
merchant and the customers.

 Processing Basics
Purchasing online may seem to be quick and easy, but most consumers give little thought to the
process that appears to work instantaneously. For it to work correctly, merchants must connect to
a network of banks (both acquiring and issuing banks), processors, and other financial
institutions so that payment information provided by the customer can be routed securely and
reliably.
The solution is a payment gateway that connects your online store to these institutions and
processors. Because payment information is highly sensitive, trust and confidence are essential
elements of any payment transaction. This means the gateway should be provided by a company
with in-depth experience in payment processing and security.

 The Payment Processing Network

Here‘s a breakdown of the participants and elements involved in processing payments:

1. Acquiring bank:
In the online payment processing world, an acquiring bank provides Internet merchant accounts.
A merchant must open an Internet merchant account with an acquiring bank to enable online
credit card authorization and payment processing. Examples of acquiring banks include
Merchant e-Solutions and most major banks.

2. Authorization:
The process by which a customer‘s credit card is verified as active and that they have the credit
available to make a transaction. In the online payment processing world, an authorization also

25
verifies that the billing information the customer has provided matches up with the information
on record with their credit card company.

3. Credit card association:

A financial institution that provides credit card services that are branded and distributed by
customer issuing banks. Examples include Visa® and MasterCard®

4. Customer:
The holder of the payment instrument—such as a credit card, debit card, or electronic check.

5. Customer issuing bank:

A financial institution that provides a customer with a credit card or other payment instrument.
Examples include Citibank. During a purchase, the customer issuing bank verifies that the
payment information submitted to the merchant is valid and that the customer has the funds or
credit limit to make the proposed purchase.

6. Internet merchant account:

A special account with an acquiring bank that allows the merchant to accept credit cards over the
Internet. The merchant typically pays a processing fee for each transaction processed, also
known as the discount rate. A merchant applies for 41 an Internet merchant account in a process
similar to applying for a commercial loan. The fees charged by the acquiring bank will vary.

7. Merchant:
Someone who owns a company that sells products or services.

8. Payment gateway:
A service that provides connectivity among merchants, customers, and financial networks to
process authorizations and payments. The service is usually operated by a third-party provider
such as VeriSign.

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 9. Processor:
A large data center that processes credit card transactions and settles funds to merchants. The
processor is connected to a merchant‘s site on behalf of an acquiring bank via a payment
gateway.

10. Settlement:
The process by which transactions with authorization codes are sent to the processor for payment
to the merchant. Settlement is a sort of electronic bookkeeping procedure that causes all funds
from captured transactions to be routed to the merchant‘s acquiring bank for deposit.

PROPERTIES OF ELECTRONIC CASH:-

1. Monetary value:-
Must have a monetary value: It must be backed by cash (currency), bank authorized credit or a
bank certified cashier‘s check.

2. Interoperability:-
Must be interoperable or exchangeable as payment for other digital cash, paper cash, goods or
services, lines of credit, bank notes or obligations, electronic benefit transfers and the like.
Storable and Retrievable - Must be storable and retrievable: Cash could be stored on a remote
computer‘s memory, in smart cards, or on other easily transported standard or special purpose
devices. Remote storage or retrieval would allow users to exchange digital cash from home or
office or while traveling.

3. Security:-
Should not be easy to copy or tamper with while it is being exchanged. This is achieved by using
the following technologies; these are nothing but new and very efficient versions of the old art of
cryptography.
Digital cash is based on cryptographic systems called "Digital Signatures" similar to the
signatures used by banks on paper cheques to authenticate a customer.

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DESIGNING ELECTRONIC PAYMENT SYSTEM:-
Basic Requirements:-

1. Technological Requirements:-
 When designing an electronic payment system, the system‘s ability of the
effectiveness and the security of each transaction and the degree of compatibility
with the online shop must be taken into consideration.

 A payment system requires the greatest level of security in electronic commerce

transactions.

 It must have confidentiality, authenticity, integrity and non-repudiation of

transactions.

2. Economic Requirements:-
o These deal with the cost of transaction which refers to the amount paid by the
client.

o Economic assessments include also atomic exchange which means that the
consumer will pay money or something equivalent in value.

o An electronic payment system must also be accessible in all countries of the

world, to all ages (user range) or currency in equal value and must not be
restricted to the company that created the value.

o Economic needs also deal with financial risks because consumers and merchants
are very concerned about the degree of security involved in online transactions.

o Return on Investment(ROI) is a economic parameter and a performance measure

used to evaluate the efficiency of an investment.

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 3. Social Requirements:-
 Payment system must prevent companies or financial institutions from tracing
user information and must be simple and user-friendly.As social needs, electronic
payment methods should also be accessible anywhere.

4. Legal Requirements:-
 Electronic payment system must abide by governmental regulations and the law
and guaranty all necessary proofs (digital signature, contracts,...)to protect users
performing domestic/international transactions.

DIGITAL TOKEN BASED ELECTROIC PAYMENT SYSTEMS:-

An electronic token is a digital analogy of various forms of payment backed by a bank or
financial institution.

Evaluating Various Electronic Token-based Methods:-

Electronic tokens are three types:

1. Cash or Real-time
 Transactions are settled with exchange of electronic currency.
 Ex: on-line currency exchange is electronic cash (e-cash).

2. Debit or Prepaid
 Users pay in advance for the privilege of getting information.
 Ex: prepaid payment mechanisms are stored in smart cards and electronic purses that
store electronic money.

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 3. Credit or Postpaid
 The server authenticates the customers and verifies with the bank that funds are
adequate before purchase.
 Ex: postpaid mechanisms are credit/debit cards and electronic checks.

ELECTRONIC PAYMENT GATEWAYS INTERFACES:-

1. Customer Interface
2. Server (e-payment Gateway) Interface
3. Client Bank Interface
4. Merchant Bank Interface
5. Merchant Interface
Online Customer will connect to e-payment gateway through Internet. Gateway will connect o
the Bank and check whether their bank account is enough to buy the required product. Online
customer can also visit Merchant‘s website through Gateway.

UPI ONE OF THE MOST USING METHODS FOR ONLINE

PAYMENTS:-

Real-time payments system Unified Payments Interface (UPI) transactions Delhi-NCR region,
India’s second-largest in terms of digital transactions, grew by 442% year-on-year in 2019,
according to digital payments platform Razorpay.

30
 UPI vs other payment methods
1% 3%

5%
11%
Emandate
44%
Wallet Transfer Net banking UPI
Card

36%

FIG NO. 8
BENEFITS OF UPI:-
 Free Fund transfer
 One App, many accounts
 Useful for small purchase
 Various apps to choose for
 Request money
 No loss of interest
 Rewards and cash backs
 Instant transfer
 More secure

APPS WITH UPI FEATURES IN INDIA:-

Unified Payments Interface (UPI) system is a smart platform through which a user can send &
receive funds using Virtual Payment Address (VPA). Hence, the funds will be straightaway
debited from the user’s bank account. Let us check some of the efficient apps that have adopted
the UPI system for catering a wide range of customers:

1) Phone Pay

31
It is one of the most famous payment apps which permit the users to manage transactions using
UPI facility. Phone Pay was founded in 2015 and is backed up by Yes Bank.

2) BHIM App

Bharat Interface for Money or in short, BHIM, has been created by NCPI (National Payments
Corporation of India). The app is popular for its simplicity and provides a protected interface.
Funds transfers using BHIM are initiated both via VPA and QR code. Also, you can send/receive
money with the help of IFSC code and bank account number.

3) Paytm

Paytm is the leading mobile wallet application which has merged with the UPI platform for
assisting its customers to transact and transfer funds without any inconvenience. You can add
funds to your Paytm wallets using the UPI ID, together with other payment modes, such as net
banking, debit/credit card etc. Moreover, customers are also allowed to initiate money requests
via Paytm with the help of UPI.

4) Airtel Payments Bank

Airtel Payments Bank app has actively integrated itself with the UPI system to provide a hassle-
free digital movement of funds. With the help of this app, the users get to create VPAs, as well as
link their respective bank accounts. Furthermore, the prime advantage of Airtel Payments Bank
is that, you can access payments both online and offline.

5) iMobile

You can access the UPI interface via iMobile and Pockets app made available by ICICI Bank.
Customers can download this app directly from Google Play store. For sending money using
iMobile, you simply have to access the ‘Funds Transfer’ preference and select the UPI method.

32
6) Axis Pay

The option for Axis Pay has been offered by Axis Bank, which is a UPI qualified platform. It is a
user-friendly interface that includes a variety of banking features.

7) SBI Pay

State Bank of India has designed this app which is specially launched for managing UPI
requirements. It should be noted that, the prime advantage of SBI Pay is focused on its usage.
Candidates who don’t even possess an account with SBI can access the app for sending and
receiving money via VPA.

8) BOB UPI

Bank of Baroda has launched the BOB UPI app which can be directly downloaded through
Google Play Store. The app offers several advantages to the customers with the availability of
additional features that aren’t included with other UPI-supporting apps.

33
 FIG NO. 9

RBI AIMS TO PUSH-UP DIGITAL TRANSACTION TO 15% OF

GDP BY 2021:-

The reserve bank of India aims to push up digital transactions to about 15% of Gross domestic
product over the next two years nearly 10 % now.
While outlining a target for digital transactions, the central bank stayed away from putting a
target to India’s cash-to-GDP ratio but said it hopes the economy will move to a “cash-lite”
model, according to its ‘vision document on payment systems released on Wednesday.
This comes at a time currency in circulation has moved back to levels seen before
demonetization. Cash as a percentage of GDP is at 11.4% compared to 11.8% before cash ban.

34
WHAT THE RBI HOPES TO ACHIEVE:-
 Increase digital payment transaction turnover as a % of GDP to 14.8% in 2021 from
about 10.37% in 2019.
 Reduce volume of cheque-based payments to less than 2 percent from about 3 percent
now.
 Ensure a fourfold increase in digital transactions to 8,707 crore in December 2021 from
2,069 crore in December 2018.
 Push up debit card transactions at point-of-sale by 35 percent between 2019 and 2021.
 Push up total card acceptance infrastructure to six times the present level by the end of
2021. “This is expected to support the aim of a cash-less economy as well as shift cash on
delivery transactions to digital modes for e-commerce,” the RBI said.
 Reduce currency in circulation with no specific target.
 Facilitate mobile-based payment transactions as gauged on basis of the registered
customer base.
 Bring down pricing of electronic payment services by at least 100 basis points compared
to current levels.
 Improve security of digital payment systems and make them more customer-focused.
 Increase competition by setting up more payment system operators.

HOW THE RBI HOPES TO ACHIEVE THIS:-

 Set up self-regulatory bodies for payment system operators.
 Develop feature phone-based payment services to complement smart phone-based
services
 Develop offline payment solutions and USSD-based payment solutions.
 Improve interoperability and build capability to process transactions of one system in
another.
 Improve availability of acceptance infrastructure for digital payments.
 Widen the scope and use of domestic cards such as Rupay.

35
  Explore adoption of newer technologies, including distributed ledger technology for
enhancement of digital payment services.
 Encourage w-mandates/standing instructions for payment transactions.
 Push contact-less payments and tokenisation.
 Improve use of bill discounting systems.
 Increase coverage of cheque truncation system.

PREFERRED DIGITAL PAYMENT METHODS IN INDIA IN

2015 AND 2020:-
60%

50%
Share of transaction volume

40%

30%

20%

10%

0%

cash on
debit card credit card online banking M-wallet
delivery
2015 57% 15% 11% 9% 8%
2020 45% 17% 13% 10% 15%

FIG NO. 10

HOW THE ONLINE ORDER PROCESS WORKS:-

 The customer is not present.
 Customer fills online shopping cart with products and proceeds to a virtual checkout.
 A PSP collects the card details and the total transaction value - you can compare PSPs using
our free online payments comparison tool.

36
 An acquiring bank then authorizes the transaction.
 The card limit is temporarily reduced by the value of the transaction.
 Goods are dispatched and the transaction value is then captured from card.
 Small transaction costs are also charged by the PSP and acquiring bank.

PAYMENT ACCEPTANCE AND PROCESSING:-

 Merchants must set up merchant accounts to accept payment cards

 Law prohibits charging payment card until merchandise is shipped
 Payment card transaction requires:
 Merchant to authenticate payment card
 Merchant must check with card issuer to ensure funds are available and to put
hold on funds needed to make current charge
 Settlement occurs in a few days when funds travel through banking system into
merchant’s account

PROCESSING A PAYMENT CARD ORDER:-

FIG NO . 11

37
COMPONENTS INVOLVED IN AN ONLINE PURCHASE:-

FIG NO. 12

A standard online shop will have an online catalogue and a shopping cart that you can get by
purchasing an e-commerce product to suit your business Your Electronic payments solution will
then be ‘plugged-in’ to this shop.

Sometimes a customer is not actually present in a shop or at the point of sale for a credit card
transaction. This may sound strange but some card transactions like placing an order over a
phone or by mail-order do not need the customer to be present at the point of sale.

This situation is known as a Customer Not Present transaction. Acquiring Banks make a
distinction between customer present and Customer Not Present transactions as there is
a potential increase in fraud when the customer does not present the card or sign a sales voucher
at the point of sale.

38
THIS SIMPLE PROCESS INVOLVES THREE MAIN ELEMENTS WITH
SPECIFIC NAMES:-

1. The bank that card details are passed to is the ACQUIRING BANK;
2. The shop has a unique ID to identify themselves to the ACQUIRING BANK and this is
given to them as part of a MERCHANT SERVICE provided by the ACQUIRING
BANK;
3. The MERCHANT SERVICE will also provide the PDQ Machine that the cards are
swiped through.

sends
data

provides

FIG NO. 13

Not all businesses have a Merchant Service with a bank so don’t worry if this is new to you. A
charge-back or cancellation of purchase is when a customer demands a refund from their credit-
card company. The rights of the consumer are quite powerful in this area as card providers like
Visa and Master card have set an international standard period for charge-backs that currently
stands at six months.

39
“LITERATURE
REVIEW”

40
 1. E-Cash-
Cash is purely software based; anonymous, untraceable, online token payment system, available
on UNIX, Windows as well as Macintosh platform. When the tokens purchased by customers the
e-Cash software stores the digital money on the customer’s personal computer which is under
signed by the bank. The users can easily spend digital money at any shop accepting e-Cash
without giving credit card details to the shopkeeper.

2. Credit Card-
A credit card is a plastic card issued to the users to lent money for purchase of goods and
services. The customer type the card number, expiry date and billing address on the order form
and the vendor can verify the details and be confident of payment.
The credit card payment on the online network can be categorized into three types:
(a) Payment using plain credit card details
(b) Payment using encrypted credit card details
(c) Payment using third party verification

3. Debit Card-
A Debit card is a banking card enhanced with Automated Teller Machine and point of sale
features so that it can be used at merchant locations. A Debit card is linked to an individual’s
bank account, allowing funds to be withdrawn at ATM and point of sale without writing a
cheque. A Debit card holder pay directly through bank for his purchases. It replaces physical
cash and cheque. In debit card system customers deposit in advance into the bank and withdraw
at the time of purchase.
There are two types of debit card which are used in real world:-
(a) Online debit card
(b) Offline debit card

4. Smart Card-
A smart card was first produced in 1977 by Motorola. It is a thin, credit card sized piece of
plastic which contains a half-inch-square area that serves as the card’s input-output system. A

41
smart card contains a programmable chip, a combination of RAM and ROM storage and can be
refilled by connecting to the bank. It is known as smart card because the ability of chip to store
the information in its memory makes the card smart.

5. Secure Electronic Transaction (SET)-

Secure electronic transaction is a system of online payments for ensuring the security of financial
transactions on the internet. The SET specification is an open, technical standard for commerce,
developed by VISA and master card. It facilitates secure payment card transactions over the
internet. Digital certificate create a trust change throughout the transactions, verifying
cardholders and merchant validity.

6. Cyber Cash-
Cyber cash is a web based service that automatically processes and verifies customer’s credit
card information then debiting the customer’s account and crediting the merchant’s account
electronically. Cyber cash servers act as a gateway between the merchant on the internet and
bank’s secure financial network. For the purpose of security in electronic payments system this
system uses the digital signatures.

7. Net Bill- Net bill is a micro payment system-

Net bill payment system uses internet for purchasing goods and services and makes secure and
economical payments for them. The net bill server maintains account for both consumers and
merchants, which allows customers to pay merchants for goods to be delivered. The goods are
delivered in digital form. There is a money tool software which verifies receipts of goods. So, net
bill system of electronic payment enables the communication between money tool, the merchant
server and net bill server.

8. First Virtual Holdings

First virtual is one of the first internet payment system that offered a third party verification
method to make payment over the internet. The first virtual payment system is unique in the
sense that it does not use encryption.

42
 CHAPTER-2
“RESEARCH
METHODOLOGY”

43
OBJECTIVE OF THE STUDY:-

 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.
 To understand the concept of electronic payment system and its security services.
 To understand working of various electronic payment system based applications.
 To analyze and enhance payments done with the help of mobile devices at POS terminals
and the success and trustworthiness of mobile wallets used.
 The usability and enhancement of the mobile wallets designed and developed.
 To determine the awareness level of electronic payment systems.
 To identify the factor that influences the usage of e-payment systems.
 To determine the current usage level among usage and the application of the electronic
payment system.

RESEARCH METHODOLOGY:-
The study based on secondary information/data. Different journals, newspapers, books and
relevant websites have been consulted in order to make the study an effective one. The present
study is an attempt to examine the E- payment system in India.

SIGNIFICANCE OF THE STUDY:-

The significance of the study is to study about the awareness of electronic payment system. In
this research will study on various independent variables affecting the awareness of electronic
payment system for respondents which are personal factors, demographic factors and type of
benefit whether can affect respondents on their awareness of usage of electronic payment system.
Many people do not aware of the importance of electronic payment system to more easy
complete on their financial transaction. Nowadays the computer enables us to access all the
money in the world, even we carry a credit card we could around the world. Using the electronic

44
payment system could let us enjoy much better life. Lastly, the significance of this study would
definitely be in accordance with the objectives mentioned earlier.

SCOPE OF THE STUDY:-

This research will focus on the awareness and usage of electronic payment system among
respondents. The assumption that can be made by survey conducted using random sample to
obtain the primary data. Survey instrument is in questionnaires form. In order to achieve the
objective of the study, the questionnaires question will be set based on research objective and
hypotheses statement. It is to ensure that the data that had been collect are useful and can be
analyzed.

RESEARCH DESIGN:-
A research design is the arrangement of condition for collection and analysis of data in a manner
that aims to combine relevant to the research purpose with economy in procedure.
The researcher has adopted Descriptive research design. Since, it describes the state of affairs as
it exists at present.

SAMPLE SIZE
A sample of 100 respondents was taken for the study. Sample size refers to the number of
respondents selected from the geographical area to constitute sample.

SAMPLING UNIT:
Geographical Area : FARIDABAD

SAMPLING TECHNIQUE:
The researcher had adopted the non-probability convenient sampling technique.

45
DATA COLLECTION:-
Data collection means the assembling for the purpose of particular investigation of entirely new
data, presumably not already available in published sources. The researcher should keep in mind
two types of data
1) Primary data
2) Secondary data
1. PRIMARY DATA
The primary data are those, which collected fresh for the first time and this to be original in
character. The primary data collected from the respondents through questionnaire.

2. SECONDARY DATA
The researcher collected the secondary data from Journals, Articles, Books, Websites, etc.

PERIOD OF THE STUDY

The period of the study was about 45 days.

TOOLS FOR ANALYSIS:-

The statistical tools used in this study are simple Percentage of respondent’s analysis, kruskal
Wallis analysis and Likert scale analysis.

A. SIMPLE PERCENTAGE OF RESPONDENTS ANALYSIS

Simple Percentage of respondents has been used to compare the relationship between
distributions of two or more items. In this study the Percentage of respondent’s analysis is used
to assess the socio economic profile of the consumers of Public Distribution System in Madurai.

B. LIKERT SCALE ANALYSIS

A Likert scale is a psychometric scale commonly involved in research that employs

questionnaires. It is the most widely used approach to scaling responses in survey research, such
that the term is often used interchangeably with rating scale, or more accurately the Likert-type

46
scale, even though the two are not synonymous. The scale is named after its inventor,
psychologist Rensis Likert Likert distinguished between a scale proper, which emerges from
collective responses to a set of items (usually eight or more), and the format in which responses
are scored along a range. Technically speaking, a Likert scale refers only to the former. The
difference between these two concepts has to do with the distinction Likert made between the
underlying phenomenon being investigated and the means of capturing variation that points to
the underlying phenomenon. When responding to a Likert questionnaire item, respondents
specify their level of agreement or disagreement on a symmetric agrees-disagree scale for a
series of statements. Thus, the range captures the intensity of their feelings for a given item,
while the results of analysis of multiple items (if the items are developed appropriately) reveals a
pattern that has scaled properties of the kind Likert identified. The format of a typical five-level
Likert item is:

1. Strongly disagree
2. Disagree
3. Neither agree nor disagree
4. Agree
5. Strongly agree

LIMITATIONS OF THE STUDY:-

The following are the limitations of the study. They are as follows;
1. Researchers did not involve all users in the project because of limited time;
instead they worked with user representatives during data collection and system
validation activities.

2. Time and cost constraints are the other important factors.

3. Chances of personal bias while responding to the questionnaire especially for the
data such as family income, educational qualification, etc.

47
 CHAPTER- 3
“DATA ANALYSIS
&
INTERPRETAION”

48
 FIG. NO. – 14
The objectives of the project are such that both Primary and Secondary Data is required to
achieved them. To collect the primary data for the report questionnaire was prepared in a view to
study the scope and challenges of online payments system. To do the needful, a sample size of
100 samples were taken. After data collection, it was complied, classified tabulated with the help
of computer. Then the task of drawing inferences was accomplished with the help of percentages
and graphical method.

49
Respondents were given questionnaire to fill-up their gender.

Table No. 1

Gender of Respondents No of Respondents % of Respondents

Male 72 72%

Female 28 28%

Total 100 100%

Gender of Respondents
80

70 72

60

50

40 No. of respondents
30
28
20

10

0
Male Female

INTERPRETATION:

Above table shows 72% of the respondents in the data collection were males and 28% of the
respondent were females. The gender is displayed graphically using bar chart. It shows that
majority of the respondents were males.

50
 Respondents were given questionnaire to fill-up their Age.

Table No.2

Age of Respondents Number of Respondents % of Respondents

Below 25 Years 32 32%

Between 25-35 Years 27 27%

Between 35-45 Years 21 21%

Between 45-55 Years 15 15%

Above 55 Years 5 5%

Total 100 100%

Age of the respondents

35
30 32
25
20 27
15
21
No. of respondents
15
10
5
0 5

below 25 yr b/w 25-35 yr b/w 35-45 yr b/w 45-55 yr above 55 yr

INTERPRETATION:

Above table shows 32% of the respondents in the data collection were below 25 yr, between 25
to 35 yr of age percentage of respondents were 27%, b/w 35to 45 yr of age respondents were
21%, b/w 45 to 55 age respondents were 15% and rest of the respondents were more than 55 and
their percentage were 5%. The age of the respondents is displayed graphically using bar chart.

51
 Respondents were given questionnaire to fill-up their Profession.

Table No. 3

Profile of Respondents Number of Respondents % of Respondents

Student 30 30%

Service man 20 20%

Professionals 28 28%

Other 22 22%

Total 100 100%

Profession of Respondents
35
30
30
25 28
20 22
20
15 No. of respondents

10
5
0

StudentsService ManPorfessional Other

INTERPRETATION:

Above table shows 30% of the respondents in the data collection were students and 20% of the
respondents were service man, 28% of the respondents were professionals and 22% respondents
were belongs to other category. The group of the respondents is displayed graphically using bar
chart. It shows that majority of the respondents were students.

52
 Respondents were given questionnaire to fill-up their Income.

Table No.4
Income Number of Respondents % of Respondents

Less than 15000 30 30%

15000-25000 28 28%

25000-35000 20 20%

35000-45000 14 14%

Above 45000 8 8%

Total 100 100%

Income of Respondents
35
30
25 30
28
20
15
10 20
5 14 No. of respondents
0
8

Less than15000-25000 25000-35000 35000-45000 Above 45000

15000

INTERPRETATION:
Above table shows 30% of the respondents in the data collection were belongs to less than 15000
income, 28% of the participants were belongs to 15000-25000 income category, 20% from
25000-35000 income category, 14% of the participants were belongs to 35000-45000 and 8%
respondents were belongs to above 45000 income category. The division of the respondents is
displayed graphically using bar chart. It shows that majority of the participants were from less
than 15000 income category.

53
Q.5. Do you use Internet Banking?

Table No. 5

Responses No of Respondents % of Respondents

Yes 74 74%

No 26 26%

Total 100 100%

users of internet banking

80
74
70

60

50
No. of respondents
40
30

20 26

10

0
Male Female

INTERPRETATION:

Above table shows 74% of the respondents in the data collection were uses the internet banking
facility and 26% of the respondent were not using the internet banking facility. The gender is
displayed graphically using bar chart. It shows that majority of the respondents were using the
internet banking facility.

54
How often you use online payment system?

Table No. 6

Response No of Respondents % of Respondents

Extremely often 42 42%
Quite often 26 26%
Moderately often 17 17%
Slightly often 11 11%
Not at all often 4 4%
Total 100 100%

Users of online payment system

45
40 42
35
30
26
25
20 17 11
15 No. of respondents
10 4
5
0

INTERPRETATION

According to the survey it’s depict that the 42% of the respondents were extremely often use the
online payment system, 26% respondents were quite often use the online payment system, 17%
respondents were moderately uses the online payment system, 11% respondents were slightly
often use the online payment system and 3% respondents were not often use the online payment
system.

55
If you have never used internet banking, what are the main reasons for that?

Table No. 7

Response No of Respondents % of Respondents

Never heard about E- banking 17 17%
Security issue 42 42%
Not secure 26 26%
Too difficult 11 11%
Other 4 4%
Total 100 100%

Reason for not using internet banking

45
40
42
35
30
25 26
20 17
15 11 No. of respondents
10
5 4
0 Never securityNot secure too difficult other
heard about issue
E- banking

INTERPRETATION

According to the survey it’s depict that the 17% of the respondents were not use internet banking
because they never heard of internet banking, 42% respondents were not use because of security
issue, 26% were not use because of they are not aware of use this technology, 11% were not use
because of difficult and 4% were not for other reason.

56
Which mode of payment you usually preferred the most?

Table No. 8

Response No of Respondents % of Respondents

Credit/ Debit card 23 23%
E-wallets 33 33%
Net banking 13 13%
Other 31 3%
Total 100 100%

Mode of payment
35
30
33
25 31
20
15 23
10
5 No. of respondents
0 13

credit/ debit E-wallets Net- banking other

card

INTERPRETATION

According to the survey it’s depict that the 23% of the respondents were using credit/ debit card
for payment, 33% respondents were use e-wallets for payment, 13% were use net banking for
payment, 31% were use other mode of payment.

57
Which of them is the most convenient way payment?

Table No. 9

Response No of Respondents % of Respondents

Cash 34 34%

Online payment 49 49%

Both 17 17%

Total 100 100%

Convenient way of payment

60
50
40 49
30
20
34
No. of respondents

10 12
0

cash onlineboth
payment

INTERPRETATION

According to the survey it’s depict that the 34% of the respondents were think cash is the most
convenient way of payment, 49% of the respondents were think that online mode of payment is
most convenient and 17% respondents were think both mode of payment is convenient.

58
 What are your reasons for choosing online banking services?

Table No. 10

Response No of Respondents % of Respondents

Convenience 42 42%
Safe and secure 26 26%
Transaction Record 17 17%
Privacy 11 11%
Saving time 4 4%
Total 100 100%

Reasons of using online payment system

45
40
42
35
30
25

26
20 No. of respondents
15 17
11
10
5
0 4

conveniencesafe and Transaction privacySaving time

secure Record

INTERPRETATION

According to the survey it’s depict that the 42% respondents were think that it is convenience to
use, 26% respondents were think it is safe and secure, 17% were choosing because of transaction
record , 11% were think that it is easy to maintain the privacy, 4% were think that it saves time.

59
 What are the security measures that could secure you against various kinds of online
banking attacks?
Table No. 11
Response No of Respondents % of Respondents
Self awareness in security 35 35%
Installing anti malicious software 26 26%
Limiting online activities 21 21%
User education 12 12%
I do not know 6 6%
Total 100 100%

Security Measures
40
35
35
30
25
20 26
15 21
10 No. of respondents
5 12
0 6

selfanti virus limiting UserI don’t know

awareness education
online activities

INTERPRETATION

According to the survey it’s depict that the 35% respondents were think self awareness in
security were help in secure frauds, 26% respondents were think anti virus help in securing, 21%
respondents think that limiting online activities helps in securing, 12% were think through
education frauds were reduce, 6% respondents were think that they have no idea about how
securing yourself from frauds.

60
 Do you think that using Internet banking makes your life easier?

Table No. 12

Response No of Respondents % of Respondents

Yes 78 78%

No 22 22%

Total 100 100%

Life Easier
90
80
70
60 78
50
40
30
20 No. of respondents
10
0
22

yesNo

INTERPRETATION

According to the survey it’s depict that the 78% of the respondents were think that using online
payment system make their life easy and 22%were think no online payment difficult for them.

61
 Do you trust the security of online banking services?

Table No. 11

Response No of Respondents % of Respondents

Not at all 5 5%

A Little 47 47%

somewhat 29 29%

A lot 19 19%

Total 100 100%

Trust on online payment system

50
45
47
40
35
30
25
29
20 No. of respondents
15
10 19
5
0
5
Not at all A little Somewhat A lot

INTERPRETATION

According to the survey it’s depict that the 5% respondents were not trust on online payment
system, 47% were little bit trust on online payment system, 29% were somewhat trust on online
payment system and 19% were a lot trust on online payment system.

62
 Overall analysis of e-Payment (digital and online payment) system?

Table No. 14

Response No of Respondents % of Respondents

Highly satisfactory 50 50%

Satisfactory 26 26%

Neutral 20 20%

Dissatisfactory 4 4%

Total 100 100%

Overall analaysis of online payment

system
60
50
40 50
30
20
2
10 20
6 No. of respondents
0
4

INTERPRETATION

According to the survey it’s depict that the 50% respondents were highly satisfied with online
payment system, 26% were satisfied with online payment system, 20% were neutral about online
payment system, 4% were dissatisfied from online payment system.

63
 Conducting personal financial transactions online such as household bills, purchases
or services online?

Table No. 15

Response No of Respondents % of Respondents

Not at all 17 17%

A little 21 21%

somewhat 36 36%

A lot 26 26%

Total 100 100%

Personal transactions
40
35
36
30
25
20 26
15
21
10 No. of respondents
5 17
0

Not at allA littleSomewhatA lot

INTERPRETATION

According to the survey it’s depict that the 17% respondents were not make online their personal
transaction, 21% respondents were little bit doing their personal financial transaction, 36% were
somewhat doing their personal transactions online, 26% were a lot make their online personal
transactions.

64
 What do you think about the balance enquiry facility provided by mobile banking
system?
Table No. 16

Response No of Respondents % of Respondents

Good 54 54%

Average 32 32%

Poor 14 14%

Total 100 100%

Balance enquiry facility

60

50 54

40

30
32 No. of respondents
20

10 14

0
goodaverage poor

INTERPRETATION

According to the survey it’s depict that the 54% respondents were think that balance enquiry
facility provided by online banking system is good for them, 32% respondents were think
balance enquiry facility provided by online banking system is average, 14% respondents were
think balance enquiry facility provided by online banking system is poor for them.

65
 What do you think about the bill payment service offered by mobile banking system?

Table No. 17

Response No of Respondents % of Respondents

Good 57 57%

Average 34 34%

Poor 9 9%

Total 100 100%

Online bill payment

60
57
50

40

30 34
No. of respondents
20

10
9
0
GoodAveragePoor

INTERPRETATION

According to the survey it’s depict that the 57% respondents were think that online bill payment
facility provided by online banking system is good for them, 34% respondents were think online
payment facility provided by online banking system is average, 9% respondents were think
online payment facility provided by online banking system is poor for them.

66
 does online banking provide more revenue than traditional banking?

Table No. 18

Response No of Respondents % of Respondents

Yes 64 64%

No 36 36%

Total 100 100%

More Revenues
70
60
64
50
40
30
36 No. of respondents

20
10
0

yes No

INTERPRETATION

According to the survey it’s depict that the 64% of the respondents were think online banking
provide more revenues than traditional banking, 36% respondents were think that online banking
not provide more revenue than traditional banking.

67
 What are the purpose of using mobile banking?

Table No. 19

Response No of Respondents % of Respondents

Recharge 26 26%

Fund transfer 11 11%

Banking payment 17 17%

Online transactions 15 15%

All 31 31%

Total 100 100%

Purpose of using moblile banking

35
30
25 31
20 26
15
17 15
10
11
5 No. of respondents
0

INTERPRETATION

According to the survey it’s depict that the 26% respondents were use online banking system for
recharge, 11% respondents use for fund transfer, 17% use for banking payment and 15% were
use for online transactions and 31% were use for all purposes.

68
 Contribution of new technology to the banks in years opinion is:

Table No. 20

Response No of Respondents % of Respondents

Very High 49 49%

Average 24 24%

Low 16 16%

Nil 11 11%

Total 100 100%

Contribution to success
60

50 49

40

30 No. of respondents
20 24
16
10 11
0
very highaverage low Nil 0

INTERPRETATION

According to the survey it’s depict that the 49% respondents were think that contribution of new
technology to the success of banks in years opinion is very high, 24% respondents were think
that contribution of new technology to the success of banks in years opinion is average, 16%
respondents contribution of new technology to the success of banks in years opinion is low, 11%
respondents were think that contribution of new technology to the success of banks in years
opinion is nil.

69
 CHAPTER-4
“CONTRIBUTION
&
LEARNING”

70
 FINDINGS

The present findings from the interpretation of the results regarding factors considered for
adopting e-banking / internet banking services by bank customers, functional / psychological
barriers, and usefulness and benefits of e-banking services are enumerated here.

1. Internet centre in the study area is the place for using internet for around 50 per cent of
the respondents.
2. Though majority of the bank customers perceive the ATM usage as important, the
importance of ATM usage is significantly related to location, education and occupation
of the bank customers based on the present study.
3. The perceived importance of Tele-banking is independent of the location and income but
depends upon sex, age, education and occupation of the bank customers.
4. The internet banking is important for bank customers and at the same time the importance
of internet banking is significantly related to their age, education, occupation and income.
5. There is significant difference in the extent of services as provided by both public and
private sector banks.
6. The preference to manual banking is little more than that of e-banking and preference
towards manual banking and e-banking is largely associated with location, age, education
and occupation of the bank customers.
7. There is significant relationship between adoption of e-banking and location, age,
education and income of the bank customers.
8. The adoption of e-banking is significantly associated with the number of banking
transactions per month among bank customers.
9. The bank customers consider “Like to use new technologies”, “IB has made banking
easy” and “Use IB for better rate offers and charges only” as the primary reasons for
adoption of e-banking.

71
 RECOMMENDATIONS

The following suggestions are recommended for enhancing e-banking / internet banking services
of banks to the customers:-

1. Banks should take necessary steps to create awareness among rural people about the
advantages of e-banking / internet banking services available in the banks.
2. The e-banking / internet banking system should be enhanced to make the online enquiry
and online payment much more easier to the customers.
3. Public sector banks should improve their e-banking / internet banking services to
compete with their private sector counterparts.
4. Most of the customers have not availed of the e-banking / internet banking services
because they do not trust the internet channel presuming it as complicated. So banks may
set up a team of personnel to train the customers to get acquainted with internet channel.
5. The bank customers have perceived the risk of getting wrong information from e-banking
/ internet banking services. These illusions should be removed from the minds of the
customers by bank people as these factors are the barriers for most of the customers for
not adopting these services.

General Suggestions:-
 The delivery of financial services at affordable costs to vast sections of people including
disadvantaged and low income groups’ is relates to financial inclusion. Unrestrained
access to public goods and services is the sine qua non of an open and efficient society.
 To achieve this sound financial and banking service is essential and therefore Indian
bankers should take resolutions to implement the policy of “e-inclusion” in all the
branches, which enable its customers to enhance the knowledge of e-banking and avail all
form of banking services.

72
 CONCLUSION

Electronic payment refers to the mode of payment which does not include physical cash or
cheques. It includes debit card, credit card, smart card, e-wallet 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.

Based on this study, the opinion of the sample respondents among the bank customers the
various aspects of e-banking / internet banking services provided by public and private sector
banks are evaluated using appropriate statistical techniques such as Cross tabulation analysis
with Kruskal-Wallis test, t-test in addition to descriptive statistics like mean and standard
deviation. It is concluded from the results of the study that the usage of ATM, Tele-banking and
Internet banking are perceived as important and the use of these services is associated with socio-
economic and demographic characteristics of the respondents. Though, most of the customers
prefer manual banking over e- 197 banking, the customers tend to use e-banking / internet
banking and adoption of e-banking and internet banking services among the bank customers is
significantly influenced by the number of times visiting the banks as well as the number of
banking transactions per month. Most of the services through e-banking / internet banking
performed by both public and private banks are beyond the expectation of the customers.
Similarly the various services provided by both public and private sector banks are more than
adequate for customers. It is concluded finally that there is significant difference between public
and private sector banks in respect of both services provided and services performed via e-
banking / internet banking.

73
 REFERENCES

1. Bhasker, Bharat (2013). Electronic Commerce, Framework, Technologies and

Applications.
2. McGraw Hill Education (India) Private Limited., p.9.2-9.16.
3. Madan, Sushila (2013). E-Commerce, Mayur Paperbacks. P.4.4-4.35.
4. S.S.Hugar, Trends and challeges to Indian Banking, Deep & Deep publications, New
Delhi.
5. Kaur Manjot, E-Commerce, Kalyani Publcation, New Delhi
6. http://economictimes.indiatimes.com
7. http://www.fraudlabs.com
8. http://niti.gov.in
9. https://www.rbi.org.in
10. http://www.cybercash.com
11. http://www.clearcommerce.com
12. http://www.netbill.com
13. http://www.sun.com/finance
14. R. Rolfe: Here Comes Electronic Cash; Credit Card Management Europe,
January/February 1994, 16-20.
15. K. Gifford, L. C. Stewart, A. C. Payne, G. W. Treese: Payment Switches for
Open Networks; IEEE COMPCON, March 95.
16. M. Sirbu, J. D. Tygar: NetBill: An Internet Commerce System; IEEE
COMPCON, March 95.

74
 Questionnaires
Gender:-
a) Male
b) Female

What is your age?

a) Below 25 years
b) Between 25-35 years
c) Between 35-45 years
d) Between 45-55 years
e) Above 55 years

Profession of Respondents:-

a) Student
b) Service man
c) Professional
d) Other

Income of Respondent:-

a) Less than 15000

a) 15000-25000
b) 25000-35000
c) 35000-45000
d) Above 45000

Q.5. Do you use Internet Banking?

a) Yes
b) No

Q6. How often you use online payment system?

75
 a) Extremely often
b) Quite often
c) Moderately often
d) Slightly often
e) Not at all often

If you have never used internet banking, what are the main reasons for that?
a) Never heard about e-banking
b) security issues
c) Not secure
d) Too difficult
e) Other

Which mode of payment you usually preferred the most?

a) Credit/ debit card
b) E-wallets
c) Net-banking
d) Other

Which of them is the most convenient way of payment?

a) cash
b) e-banking
c) Both

What are your reasons for choosing online banking services?

a) Convenience
b) Safe and secure
c) Transaction record
d) Privacy
e) Save Time

76
 What are the security measures that could secure you against various kinds of online
banking attacks?
a) Self awareness
b) Installing anti-malicious software
c) Limiting online activities
d) User education
e) I don’t know

Do you think that using Internet banking makes your life easier?
a) Yes
b) No

Do you trust the security of online banking services?

a) Not at all
b) A little
c) Somewhat
d) A lot

Overall analysis of e-Payment (digital and online payment) system?

a) Highly satisfactory
b) Satisfactory
c) Neutral
d) Dissatisfactory

Conducting personal financial transactions online such as household bills, purchases

or services online?
a) Not at all
b) A little
c) Somewhat
d) A lot

77
 What do you think about the balance enquiry facility provided by mobile banking
system?
a) Good
b) Average
c) Poor

What do you think about the bill payment service offered by mobile banking system?
a) Good
b) Average
c) Poor

Does online banking provide more revenue than traditional banking?

a) Yes
b) No

What are the purpose of using mobile banking?

a) Recharge
b) Fund transfer
c) Banking payment
d) Online Transactions
e) All of the above

Contribution of new technology to the banks in years opinion is:

a) Very high
b) Average
c) Low
d) Nil

78