Volume 9, Issue 6, June – 2024 International Journal of Innovative Science and Research Technology

ISSN No:-2456-2165 https://doi.org/10.38124/ijisrt/IJISRT24JUN938

Exploring the Key Determinants of Mobile Payment

Adoption in the Fintech Sector
1 2
Mamatha V G, Dr. Nimi Dev R
Research Scholar, Associate Professor & Research Guide,
Research and PG Department of Commerce, Research and PG Department of Commerce,
Government College for Women, Government College for Women,
Thiruvananthapuram, Kerala Thiruvananthapuram, Kerala

Abstract:- Fintech payment applications have gained performed instantly and directly into the bank accounts of
popularity among customers during these years, beneficiaries with the usage of Aadhar for transaction
especially after the COVID-19 outbreak. Technological authentication and the capacity to handle massive databases
advancement and penetration of internet and and communication instantly(Sankar, 2021). Digital India
smartphones among people boosted the growth of fintech initiative, demonetization, UPI, internet availability at
startups which provide financial services to customers affordable rates, covid-19, etc. instinct people to use and
directly including banking services without any prefer fintech payment applications. Through the
intermediaries. Financial technology is providing new introduction of Regulatory Sandbox and Reserve Bank
variants of services by leveraging technology in financial Innovation Hub (RBIH), Government of India encourages
services to meet the expectations of customers. This the growth of fintech startups which boosts the adoption of
study primarily focuses on what factors influence fintech payment applications.
customers towards adoption of fintech mobile payment
applications and also covers the effect of demographic Nowadays, we are more dependent on technology than
variables (age, gender, education qualification, and ever before. Everything including social life, banking,
monthly income) on adoption of fintech payment insurance, etc. is at our fingertips, even the financial lifestyle
applications. The research is quantitative and analytical of people is changing due to various innovations. Mobile
in nature. Primary data is collected through payment applications have witnessed significant progress in
questionnaire. Data were collected from 120 respondents adoption and usage during the past few years. Fintech
and analyzed with the help of percentage, and weighted companies have introduced a variety of service options,
average scores and hypothesis was tested using chi- especially in payment methods. These companies are
square. The results show that gender and age of disturbing traditional banking system in India in the field of
customers significantly influence the adoption of fintech payment. Several fintech payment applications aim to
payment applications. The study identifies, convenience, provide better customer experience at reduced transaction
ease of use, reduced transaction cost and cashback and cost, which motivates customers towards fintech
rewards are the major factors motivating customers applications(Agarwal & Zhang, 2022). Technological
toward fintech payment applications. advancement helps in providing better and customized
services to customers and also helps in reaching the
Keywords:- Fintech, Mobile Payment Application, Security, unreached segment of the population. Which in short
Technology, Financial Services. enhances the financial inclusion of society.

I. INTRODUCTION Mobile payment applications are gaining global

popularity due to their features such as convenience, speed
FinTech is described as a cross-disciplinary field of transaction, and ease of use(Alwi et al., 2019). As a
combining finance, technology management, and innovation developing country like India, fintech mobile payment
management. More specifically, the term "FinTech" refers to application plays a significant role in the development of
any novel concepts that enhance financial service operations financial sector and also driving people towards a cashless
by recommending technology solutions in accordance with economy. It is found disruptive to traditional banking
various business circumstances, while the concepts may also services as they can provide banking services directly to
result in new business models or even whole new customers without any intermediaries which impacts the
enterprises(Leong & Sung, 2018). Fintech is the operation of banking sector including payment transactions.
combination of two terms “finance” and “technology”, Now customers are able to conduct transactions within a
which means any technology that aims to improve and short span of time in more convenient way which hinder
automate the provision of financial services in ways that are them from approaching bank branches to carry on
quicker and more innovative than those that have transactions(Alt et al., 2018). Transformation in financial
historically been offered(RBSA, 2021). UPI and IMPS are sector, especially in banking sector has boosted the growth
two examples of quick payment systems made possible by of fintech mobile payment applications.
digital innovation. Large-scale transfers may now be

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Volume 9, Issue 6, June – 2024 International Journal of Innovative Science and Research Technology
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The problem of the study is evident from the huge both direct and indirect effect on adoption of fintech
transformation undergoing in financial sector, especially in services.
the banking sector. Penetration of mobile phones and
internet among people has boosted the growth of fintech Daragmeh et al., (2021) examined the behavioral
companies in India. Digital India initiative has also intention of Generation X in Hungary to use mobile
prompted customers to move towards a cashless economy. payments. It was found that, there is a steady peak towards
The existing studies relating to adoption of fintech payment the use of mobile payment services than before the
applications in India are limited. The study aims to explore pandemic. Various variables analyzed in the study were
the factors influencing adoption of fintech mobile payment subjective norms, perceived ease of use, perceived
applications among customers. The paper also covers effects usefulness, perceived COVID-19 risk, and behavioral
of demographic variables on the adoption of fintech intention, of which, except perceived ease of use, all other
payment applications and various difficulties faced by variables have a direct impact on adoption of mobile
customers while using fintech services. payment services.

II. REVIEW OF LITERATURE Suriaty Binti Abdul Rani, (2021) focused on fintech
security, adoption of fintech, customer satisfaction,
Lal* et al., (2020)carried out an empirical study to perception, behaviour of customers towards fintech services,
examine the factors influencing adoption of fintech cryptography and encryption. The work was carried over a
applications and their impact on usage of fintech period of ten years, from 2009-2019, various quantitative
applications among bank customers in Hyderabad. The and qualitative data were used to analyze and categorize
paper also covers the significant differences between various data. Perceived risk, usefulness, perceived ease of use,
venture capital-backed funds among selected continents. privacy, trust, security, performance expectancy are the
The paper considered 17 attributes that influence the factors to be considered while adopting fintech services.
adoption of fintech. The results of the study reveal that there Security concern is the most important factor that leads to
is no significant difference between venture capital-backed customer satisfaction.
funds among selected continents. The study concluded that
three main factors influencing adoption of fintech Das & Das, (2020) studied the perception, adoption,
applications are: conducive, adaptability, and security. It is and pattern of usage of fintech services by customers of
pointed out that conducive is the most enabling factor as it bank in Hojai district of Assam. On the basis of survey of
offers customers the opportunity to perform transactions in a 215 respondents, the study analyses the significant
short span of time. Adaptability and security do not directly association between adoption fintech services and
influence the adoption of fintech as compared to conducive demographic variables. Methods used for analysis includes
factors. percentage method, chi-square test, and weighted average.
The study revels awareness and usage of fintech services are
Singh et al., (2021) paper examined the various factors more among millennials and generation Z, and also younger
that influence the intention to use fintech services. It generation is more benefited from fintech services as
primarily addresses four aspects: perceived utility, usability, compared to others. Further, proper government support
trust, and response. 439 samples were obtained from users plays an important role in adoption of fintech services.
of fintech services for the study. structural equation
modeling (SEM), was used to look at the contributing Fernando, (2019) study highlights how perceived risk
elements. The findings demonstrate that perceived utility and trust influence the adoption of fintech services in
and usability directly affect the intention to use fintech Indonesia. The study employees Technology Acceptance
services. Before utility and usability, trust and Model along with perceived risk and trust. The study reveals
responsiveness are prioritized. The study also supports the that trust influence the adoption of fintech services.
idea that responsiveness and trust serve as mediators, Perceived risk influences perceived usefulness which
influencing perceived utility and ease of use, which influence the attitude to use that leads to adoption of fintech
influences intention to utilize fintech services. The SEM services.
analysis gives adequate support for the modified TAM,
according to the paper. The article also examined disruptive Ranjith et al., (2021) explores the growing trend of
nature of fintech, while on the other hand it also provides digital transactions and its impact on the Indian economy.
opportunities for telecom and retail companies. The study emphasizes the significance of an efficient
payment system in facilitating the flow of liquidity and
Setiawan et al., (2021) emphasized on user providing better service to consumers in today's digitized
innovativeness and adoption of fintech in Indonesia during era. By analysing existing literature on the subject, the
the pandemic. Data was collected through structured researchers aim to shed light on consumers' attitudes
questionnaire on the basis of purposive sampling from 485 towards cashless methods of transactions and the perceived
samples. Various internal issues and external issues related safety of these transactions in a world dominated by
to adoption of fintech services were considered, of which interconnected technologies. The article presents valuable
attitude of users have significant impact on adoption of insights into the advantages and challenges associated with
fintech, while government support does not have a direct digital transactions, as observed in India. It highlights the
effect on fintech adoption. User readiness to innovation have increasing acceptance and usage of digital payments over

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the years, underscoring the changing preferences of IV. METHODOLOGY

consumers. The findings of this study provide practical
implications for marketers and businesses, enabling them to The study primarily aims to evaluate the factors
devise strategies that align with consumers' preferences and influencing customers' adoption of fintech mobile payment
needs. By embracing digital transactions and addressing the applications. The research highlights the effect of
associated challenges, businesses can effectively cater to the demographic variables on the adoption of fintech mobile
demands of an increasingly digitized consumer base. payment applications.

III. STATEMENT OF THE PROBLEM  Research Design:

The research is quantitative and analytical in nature,
The financial sector in India has experienced a notable mainly based on primary data.
transformation in recent years, primarily driven by
technological innovation and advancements. Factors such as  Sample Size and Sampling Unit:
the demonetization initiative and the Digital India campaign A sample of 120 respondents has been selected from
have instilled a preference for cashless transactions among customers using fintech mobile payment application in
the population. Moreover, the ongoing COVID-19 pandemic Thiruvananthapuram district of Kerala.
has further accelerated the adoption of cashless transactions,
highlighting the need to explore the factors influencing this  Sampling Technique:
shift. Therefore, this study aims to address several key To collect responses from users, purposive sampling
questions: Do customers prefer fintech mobile payment technique is applied.
services? What are the motivating factors that drive
customers towards adopting fintech mobile payment  Source of Data:
services? How do demographic variables, including age, For the research, both primary and secondary data are
gender, education, and occupation, impact the adoption of used. Primary data is collected from respondents
fintech payment services? Additionally, the study delves through questionnaires while secondary data is collected
into examining the challenges faced by customers when through websites, magazines, newspapers, etc.
utilizing fintech payment services. By addressing these
questions, the research seeks to provide valuable insights  Analysis:
into the dynamics of the fintech payment industry in India Data is analysed using the percentage method,
and its implications for the financial ecosystem. weighted average score and chi-square test.

 Significance of the Study:  Hypotheses:

Fintech payment services are gaining significant Based on objectives of the study, the research
importance than ever before especially after the pandemic hypotheses formulated were
outbreak. Various fintech payment applications are available
which provide a wide range of financial services including  H01: There is no significant association between gender
banking services to customers at their fingertips. The present and adoption of fintech payment application.
study was intended to find out the factors influencing  H02: There is no significant association between age and
customers to adopt fintech payment services. In the present adoption of fintech payment applications.
context, fintech payment applications have a significant role  H03: There is no significant association between the level
in driving us to a cashless economy. of education and adoption of fintech payment
applications.
 Objectives of the Study:  H04: There is no significant association between level of
monthly income and adoption of fintech payment
 To identify the factors that influence customers towards applications.
fintech payment services.
 To evaluate the effect of demographic variables on V. ANALYSIS AND INTERPRETATION
adoption of fintech payment services.
 To identify the problems faced by customers while using  Demographic Profile of the Respondents
fintech payment apps. Table 1 presents the demographic characteristics of the
respondents, encompassing gender, age, education
 Scope of the Study: qualification, and monthly income. Among the respondents,
The study is undertaken to analyze the factors 57.5% identified as female, while the remaining portion
influencing adoption of fintech mobile payment applications identified as male. The majority of participants fell within
in Thiruvananthapuram district of Kerala. This research the age range of 20-40 years. Approximately 52.5% of the
highlights the adoption of five fintech payment applications, respondents possessed a post-graduation degree. Regarding
they are PhonePe, Paytm, Google Pay, Amazon Pay, and monthly income, 37.5% of the respondents reported
MobiKwik. earnings below Rs.10,000, while 27.5% indicated an income
between Rs. 10,000 and Rs.30,000. The following section
provides an overview of the survey results: -

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Volume 9, Issue 6, June – 2024 International Journal of Innovative Science and Research Technology
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Table 1 Demographic Profile

Variables Categories No. of Respondents Percentage (%)
Male 51 42.5
Gender
Female 69 57.5
Total 120 100
Below 20 years 3 2.5
20-40 years 84 70
40-60 tears 18 15
Age
Above 60 years 15 12.5
Total 120 100
SSLC 0 0
Plus two 12 10
Graduate 39 32.5
Post graduate 63 52.5
Education Qualification
Others 6 5
Total 120 100
Below 10,000 45 37.5
10,000-30,000 33 27.5
Monthly Income 30,000-60,000 30 25
Above 60,000 12 10
Total 120 100
Source: Primary data

 Preference of Using Fintech Mobile Payment Application for Money Transfer/ Make Payment
Below, Table 2 illustrates the customer preferences regarding the utilization of fintech mobile payment applications for
money transfers and making payments. A significant majority of respondents, accounting for 82.5%, expressed a preference for
using payment applications for these purposes. The remaining respondents indicated a preference for cash or card transactions.

Table 2 Preference of Usage

Preference No. of Respondents Percentage (%)
Yes 99 82.5
No 21 17.5
Total 120 100
Source: Primary Data

 Adoption of Fintech Mobile Payment Application

According to Table 3, the data reveals that the majority of respondents (52.5%) have adopted Google Pay as their preferred
payment application for making payments or money transfers. Phone Pe and Paytm hold the next highest adoption rates, both at
17.5%. A small portion of respondents (2.5%) reported using MobiKwik. The survey results are provided below: -

Table 3 Adoption of Fintech Mobile Payment Application

Payment application Response Percentage(%)
Phone Pe 21 17.5
Paytm 21 17.5
Google Pay 63 52.5
Amazon pay 12 10
MobiKwik 3 2.5
Total 120 100
Source: Primary Data

 Frequency of Usage of Fintech Payment Application

Table 4 presents the frequency of usage of fintech payment applications among customers. It reveals that 47.5% of the
respondents utilized the payment application more than twice a week, while 30% used it once a week. A small percentage, 5% of
the respondents, reported never having used a fintech payment application. The survey results are provided below: -

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Table 4 Frequency of Usage

Frequency of Usage No. of Respondents Percentage (%)
Once/Week 36 30
Twice/ Week 21 17.5
More than twice 57 47.5
Never 6 5
Total 120 100
Source: Primary Data

 Factors Motivating Adoption of Fintech Mobile Payment Application

The factors that strongly motivate customers towards the adoption of fintech payment applications are indicated by a
weighted average score ranging from 4.21 to 5. Customers are notably driven by the convenience, ease of use, usefulness, reduced
transaction costs, as well as cash backs and rewards offered by these applications. Additionally, factors that motivate customers,
as evidenced by a weighted average score ranging from 3.41 to 4.20, include the strengthening of security measures,
improvements in service quality, and increased performance and confidentiality of data. Enhancements in these areas have the
potential to provide a better customer experience, thereby potentially increasing the adoption rate of fintech payment applications.

Table 5 Factors Motivating Adoption of Fintech Mobile Payment Application

Factors Strongly Agree Agree Neutral Disagree Strongly Disagree Weighted Average
(5) (4) (3) (2) (1) Score
Security 48 24 9 27 12 3.575
Convenience 69 33 12 6 0 4.375
Service Quality 30 51 3 21 15 3.5
Ease of Use 57 51 9 3 0 4.35
Performance 24 57 39 0 0 3.875
Usefulness 84 30 6 0 0 4.65
Confidentiality 27 48 0 39 6 3.425
Reduced Transaction Cost 87 27 6 0 0 4.675
Cash backs and rewards 63 33 9 15 0 4.2
Source: Primary Data

Five-point Likert Scale interpretation = (Maximum- Minimum) / Group

= (5-1)/5

=0.80

Table 5.1 Five-Point Likert Scale Range Interpretation

Weighted average score Option Weight
1.00 – 1.80 Strongly Disagree 1
1.81 – 2.60 Disagree 2
2.61 – 3.40 Neutral 3
3.41 – 4.20 Agree 4
4.21 – 5.00 Strongly Agree 5

 Problems Faced while Using Fintech Mobile Payment Application

The survey results indicate that respondents encountered several challenges while using fintech mobile payment applications.
The major problems reported include technical issues, transaction errors, and concerns regarding the perceived risk associated
with confidentiality. These issues hindered the smooth usage of the applications. The survey results are provided.

Table 6 Problems Faced while Using Fintech Mobile Payment Application

Problems No. of Respondents
Technical issues 90
Not comfortable 3
Non acceptance 3
Perceived risk 51
Transaction error 60
Others 21
Source: Primary Data, Multiple Responses

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 Effect of Demographic Variables Towards Adoption of The chi-square test conducted reveals a p-value of .011,
Fintech Payment Application which is less than the significance level of .05.
Consequently, the null hypothesis is rejected at a 5% level
 H01: There is no significant association between gender of significance, and the alternative hypothesis-stating that
and adoption of fintech payment applications. there is a significant association between gender and the
Analysing the relationship between gender and the adoption of fintech payment applications—is accepted. The
adoption of fintech payment applications, it becomes discrepancy in the usage of fintech payment applications
apparent that a higher proportion of female respondents may be attributed to the specific purposes for which
(57.5%) have embraced these applications compared to male respondents utilize these applications. The survey results are
respondents (42.5%). This indicates an association between presented below:
gender and the adoption of fintech payment applications.

Table 7 Chi-Square Test for Association between Gender and Adoption of Fintech Mobile Payment Application
Fintech Payment Applicatication
Total Chi-square
Gender PhonePe Paytm Google Pay Amazon Pay MobiKwik Pvalue
(%) value
(%) (%) (%) (%) (%)
Male 7.5 15 10 7.5 2.5 42.5% 13.158 0.011*
Female 10 2.5 42.5 2.5 0 57.5%
Total 17.5 17.5 52.5 10 2.5 100%
Source: Primary Data

 H02: There is no significant association between age and significance level of .05. Consequently, the null hypothesis
adoption of fintech payment applications. is rejected at a 5% level of significance, and the alternative
While examining the relationship between age and the hypothesis—stating that there is a significant association
adoption of fintech payment applications, it becomes between age and the adoption of fintech payment
apparent that the majority of respondents within the age applications—is accepted.
group of 20-40 years have embraced these applications. This
finding suggests that the adoption of fintech payment The inclination of the youth towards fintech payment
applications is predominantly observed among the younger applications can be attributed to their familiarity with
generation. technology and their preference for the convenience and
swiftness of transactions. They are often more tech-savvy
The chi-square test reinforces this observation, with a and inclined to embrace technological advancements in
calculated p-value of .016, which is less than the financial services.

Table 8 Chi-Square Test for Association between Age and Adoption of Fintech Mobile Payment Application
Fintech Payment Applicatication
Total Chi-square
Age PhonePe Paytm Google Pay Amazon Pay MobiKwik Pvalue
(%) value
(%) (%) (%) (%) (%)
Below 20 0 0 2.5 0 0 2.5 24.695a 0.016*
20-40 12.5 7.5 47.5 2.5 0 70
40-60 0 7.5 2.5 2.5 2.5 15
Above 60 5 2.5 0 5 0 12.5
Total 17.5 17.5 52.5 10 2.5 100%
Source: Primary Data

 H03: There is no significant association between level of It appears that educational qualification does not
education and adoption of fintech payment applications. appear to significantly influence the adoption of fintech
Table 9 indicates that a majority of the respondents payment applications. This may be because individuals are
hold post-graduate degrees (52.5%), followed by graduates motivated to use mobile payment applications primarily due
(32.5%). However, the chi-square test reveals a p-value of to their convenience and the availability of multiple options
.648, which exceeds the significance level of .05. This for making payments.
suggests that there is no positive association between the
level of education and the adoption of fintech payment
applications. Therefore, the null hypothesis, stating that
there is no significant association between educational
qualification and the adoption of fintech payment
applications, cannot be rejected.

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Table 9 Chi-Square Test for Association between Education Qualification and Adoption of Fintech Mobile Payment Application
Fintech Payment Applicatication
Level of Total Chi-square
PhonePe Paytm Google Pay Amazon MobiKwik Pvalue
Education (%) value
(%) (%) (%) Pay (%) (%)
Plus two 2.5 5 2.5 0 0 10 9.635a 0.648*
Graduate 5 7.5 12.5 5 2.5 32.5
Post graduate 10 5 32.5 5 0 52.5
Others 0 0 5 0 0 5
Total 17.5 17.5 52.5 10 2.5 100%
Source: Primary Data

 H04: There is no significant association between level of association between monthly income and the adoption of
monthly income and adoption of fintech payment fintech payment applications. Consequently, we fail to reject
applications. the null hypothesis, concluding that there is no significant
Table No: 10 presents the classification of respondents correlation between the level of monthly income and the
based on their income in relation to the adoption of fintech adoption of fintech payment applications.
payment applications. Among the respondents, 37.5%
belonged to the income group below Rs. 10,000, while It appears that income level does not significantly
27.5% fell within the income range of Rs. 10,000 to Rs. impact the adoption of fintech payment applications. The
30,000. The analysis of the chi-square table value yielded a preference for these applications stems from their ability to
p-value of .412, which is greater than the significance level reduce transaction costs, offer rewards and cashbacks, and
of .05. Therefore, this suggests that there is no positive provide convenience to users.

Table 10 Chi-Square Test for Association between Income and Adoption of Fintech Mobile Payment Application
Fintech Payment Applicatication
Monthly Chi-square
PhonePe Paytm Google Pay Amazon Pay MobiKwik Total (%) Pvalue
Income value
(%) (%) (%) (%) (%)
Below 10,000 5 5 27.5 0 0 37.5 12.428a 0.412*
10,000-30,000 5 2.5 17.5 2.5 0 27.5
30,000-60,000 5 7.5 5 5 2.5 25
Above 60,000 2.5 2.5 2.5 2.5 0 10
Total 17.5 17.5 52.5 10 2.5 100
Source: Primary Data

VI. FINDINGS  The study found that the adoption of fintech payment
services is significantly influenced by the gender and age
 Fintech mobile payment applications are widely of customers. Younger individuals, who are more
preferred by customers for making payments and money technologically adept, and those with a preference for
transfers. The convenience and ease of use offered by convenience, show a higher inclination towards adopting
these applications make them a popular choice among these services. However, the study did not find
users. significant influence from other demographic variables
 Among the various available payment applications, such as education level and monthly income on the
Google Pay emerged as the most adopted option among adoption of fintech payment services.
customers. It was followed by PhonePe and Paytm,
indicating their popularity in the market. These findings provide valuable insights into customer
 Fintech payment services are highly regarded for their preferences and challenges related to fintech payment
convenience, simplicity, and their ability to streamline applications. They emphasize the importance of addressing
everyday life. Users appreciate the reduced transaction technical issues, improving transaction reliability, and
costs and the incentives such as cashback and rewards, building trust among users to further promote the adoption
which further motivate them to adopt fintech payment of these services. Additionally, understanding the influence
applications. of gender and age on adoption can guide marketing
 Customers encounter certain challenges while using strategies and help fintech companies tailor their offerings to
fintech payment services. Technical issues, transaction different customer segments.
errors, and perceived risks were identified as the main
problems faced by users. Addressing these concerns can
contribute to enhancing the overall user experience.

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VII. SUGGESTIONS essential for fostering the development of fintech

companies. Moreover, the dynamic nature of these sectors
 In order to promote the adoption of fintech payment necessitates the establishment of a continuous monitoring
services and facilitate the transition to a cashless system to regulate their operations effectively. Such
economy, it is crucial to address the existing barriers initiatives not only encourage a larger customer base to
and implement appropriate measures. Here are some adopt fintech services but also enable financial services to
elaborate suggestions to consider: reach previously underserved segments of the population.
Overall, the study underscores the need for ongoing efforts
 Fintech companies should enhance the user experience to enhance the adoption of fintech solutions, ensuring a
of their payment applications by reducing transaction more inclusive and accessible financial ecosystem for all.
errors, implementing regular testing, and enhancing
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