digitalwallet applications: ushering the digital …

DIGITALWALLET APPLICATIONS:

USHERING THE DIGITAL PAYMENTS

*Dr. B.Percy Bose Associate Professor and Head,

Department of MBA,

JyotiNivas College Autonomous,

Bangalore

Ph. 7639261015

Mail Id: [email protected]

**Dr. Jahnavi M. Assistant Professor and Head,

Department of M.Com(FA)

JyotiNivas College Autonomous,

Bangalore

Ph. 9353939778

Mail Id: [email protected] ABSTRACT

Whenever a new innovation was released for public consumption, it was consumed without much

questions being asked as they were tired of older alternatives. The rapid adoption of smart phones over

the last decade has improved telecom connectivity and also with the declining handset prices, more

consumers are ready to try out new technological changes. As commerce is moving to mobile payments,

mobile has become the primary device around which our daily lives revolve and it is shaping how

consumers search, purchase and pay for goods and services. Service like e-wallet is innovation

facilitating easier payments at the time of requirement. The capability to store and process payments has

further allowed companies to create a seamless delivery and payments experience for their users. The

payments landscape in India is undergoing a transformation as, traditionally a cash-based economy, has

seen an increase in card-based and mobile transactions. The value of physical currency in circulation in

the country is one of the highest among other emerging economies. The primary purpose of this study is

to obtain a picture of the Consumer Behavior towards Digital Wallet, a technological innovation as a

mode for settling bills and making payments. In addition the report will inform about the choice of the

preferred Mobile Wallet by the consumer and the various challenges which they have come across while

using the Mobile Wallet. The study will throw light on views which has been understood by going through

various sources of primary and secondary data.

Keywords: Digital wallet, Mobile Wallet, Consumer Behavior, Mobile payments, Technological

innovation.

Journal of Interdisciplinary Cycle Research

Volume XII, Issue II, February/2020

ISSN NO: 0022-1945

Page No:1051

1) INTRODUCTION

In the current era of intense competition among different companies where customer is the king, success

depends a lot on the efficiency of the managers in delivering what they have promised to the customers and

the responsibility lies on the organizations to develop such a culture where business ethics are followed,

value for the services is provided and quality services are offered to achieve higher level of customer

satisfaction. For achieving customer satisfaction understanding dynamic consumer behavior is essential.The

entire world revolves around cash transactions. 85% of transactions are in cash across the world. This trend

can be attributed to few apparent reasons, viz. Opaqueness of cash related transactions, inability to trace the

source of its origin and a sense of security for the holder (Mazzotta, B. C. 2017, October 05)

The disadvantages of cash-based system have lead many countries to adopt digital payment modes; which in

entirety is called as cashless economy. A cashless economy is one in which all the transactions are done

through electronic channels such as debit/credit cards, Immediate Payment Service (IMPS), National

Electronic Funds Transfer (NEFT) and Real Time Gross Settlement (RTGS) (Garg, Preeti, and Manvi Panchal

2016).

The benefits of cashless economy are eradication of black money or unaccounted money and an elimination

of all the disadvantages of cash based economy. Cash based economy increases corruption, as cash economies

have high liquidity leading to increased money supply in the financial system. This makes the system less

reliable and less accountable. There are issues related to the transparency of these transactions which renders

it practically difficult to shift and locate the fraudulent activities. The less accountability of the transactions,

results in loss of revenue to the government.The chart apparently depicts the immediate effect of

demonetization.

Table: Status of Mobile payments in India

Mobile payments( Billion transactions) 1.0

Mobile payments value (Trillion USD) 0.2

Mobile payment percentage of overall non cash 5.0%

Mobile payment percentage of overall non cash 0.2%

Source: (KPMG India 2016).

However the good effect of demonetization is that it has lead to a surge in the usage of fintech by the

urbanites. The major investors who have invested in fintech in India are Paytm, Billdesk, Freecharge,



ISSN NO: 0022-1945

Page No:1052

Mobikwik, Policybazaar. The major business categories/ areas wherefintech is popular are payment gateways,

wallets, mobile wallets and insurance (KPMG India 2016).

(in percentage)

Fig.1 Comparison between cash & non-cash transactions in India projected till 2025.

Source: http://www.dnaindia.com/analysis/column-cashless-but-not-moneyless-2275390

From the above chart it is evident that over the years India’s non-cash usage is going to be almost equal to

cash usage and this is possible only through digital payments

Customer: The term “customer” is typically used to refer to one who regularly purchase from a particular

store or company for personal use. Studying consumers provides clues for improving or introducing products

or services, setting prices, devising channels, crafting messages, and developing other marketing activities by

Kotler, 2008.

Consumer Behavior:

Consumer Behavior is the study of how people buy, what they buy, when they buy and why they

buy.Consumer Behavior is the study of how individual customers, groups or organizations select, buy, use,

and dispose ideas, goods, and services to satisfy their needs and wants. It refers to the actions of the

consumers in the marketplace and the underlying motives for those actions.



ISSN NO: 0022-1945

Page No:1053

With advancement in technology, things around have changed drastically. Technology caters to man’s

comfort and convenience. Smart phones are not just useful as communication devices, socializing tool, or

only for internet access, but they have now become an important part of the consumer’s day to day

activities for making money transaction or payments. When smart phones can function as leather wallets, it

is called “Digital Wallet” or widely known as “Mobile Wallet”. Digital wallets include the following two

concepts. They are:

MOBILE WALLET E- WALLET

What is Mobile wallet?

A mobile wallet is a way to carry credit card or debit card information in a digital form on mobile device.

Instead of using physical plastic card to make purchases, consumers can pay with their smart phone, tablet,

or smart watch.

What is E- wallet?

E -wallet is an online prepaid account where one can stock money, to be used when required. As it is a pre-

loaded facility, consumers can buy a range of products from airline tickets to grocery without swiping a debit

or credit card, provided their wallet is filled with sufficient amount required for payment.

2) RESEARCH METHODOLOGY

2.1 Statement of the Problem

Consumer behavior research is the scientific study of the processes consumers use to select, secure, use and

dispose of products and services that satisfy their needs. Knowledge of consumer behavior directly affects

marketing strategy.Information technology is a booming sector and the consumers now are widely accepting

the technological changes in the country and worldwide. The digital payment industry is one among which is

seen a continuous growth in the market. Payment systems have witnessed the introduction, acceptance and

wide scale deployment of electronic payment systems. The payment ecosystem has now witnessed the

introduction of mobile payment systems and their associated services.



ISSN NO: 0022-1945

Page No:1054

The discussion of the study is to understand the consumer behavior towards Digital Wallets and to find out the

reasons for the same as a considerable change has been witnessed on consumer adoption toward Digital

Wallet. As the mode of payment preferred by the consumers change, it brings with it the various challenges

and risk faced by the users of the mobile wallet applications. The study will help to understand how

consumers are willing to adapt to the changing technology and implement them in their day- to- day activities.

The study will also help to throw light on the kind of services preferred by the users or consumers which are

provided by the Digital Wallet payment service providers.

2.2 Objectives of the Study

To understand the consumer awareness towards Digital Wallets

To study the parameters that influence consumers’ behavior in adoption of Digital wallet.

To understand consumer convenience towards Digital Wallet

To study the risk and problems faced by consumer in use of Digital Wallet.

To find out the preferences of the users towards Digital Wallet

2.3 Type of Research

Descriptive research is used to describe characteristics of a population or phenomenon being studied. This

type of research attempts to describe, explain and interpret conditions of the present. The major purpose of

descriptive research is description of state of affairs as it exists at the present. In this method the researcher

has no control over the existing situation. The technique of structured questionnaire was used to conduct

the study.

2.4 Limitation of the Study

The study was restricted to Bangalore City only.

The sample size used for the study is limited to 50only.

Not many use digital wallet.

The respondents may be subjected to bias.

The time limitation is one of the factors which influence the study.

Consumer’s perception change from time to time with the change in technology.



ISSN NO: 0022-1945

Page No:1055

3) ANALYSES AND INTERPREATION

Table no. 3.1

Showing respondents’ awareness of mobile wallet applications.

Graph no.3.1: showing respondent’s awareness of mobile wallet applications.

The above table and graph depicts that majority of the respondents are aware of mobile wallet applications.

Least percentage (14%) of the respondents are not aware of mobile wallet applications.

Table no. 3.2 Showing consumer’s awareness of various mobile wallet applications.

Graph no.3.2 showing consumer’s awareness of various mobile wallet applications.

86.00%

14.00%

0.00% 20.00% 40.00% 60.00% 80.00% 100.00%

Yes

No

Awareness of mobile wallet apps

percentage

Options Number of Respondents Percentage

Yes 43 86%

No 7 14%

TOTAL 50 100%


Pay tm 48 96%

PayPal 20 40%

Free Charge 31 62%

MobiKwik 25 50%

Citrus 6 12%

Others 6 12%



ISSN NO: 0022-1945

Page No:1056

The above table and pie diagram depicts that majority the respondents are aware of Paytm followed by

Free Charge and MobiKwik. Least percentage of the population is aware of Citrus.

Table no. 3.3

Showing respondents think demonetization has led to increased use of digital payments applications.


Strongly agree 18 36%

Agree 23 46%

Neutral 7 14%

Disagree 2 4%

Strongly disagree 0 0%

TOTAL 50 100%

Paytm96%

Paypal 40% , freecharge 62%

Mobikwik

50%,

citrus 12%others 12%

CONSUMER AWARENESS



ISSN NO: 0022-1945

Page No:1057

Graph no. 3.3: showing respondents think demonetization has led to increased use of digital payments

applications.

From the graph above it can be inferred that majority of the respondents agree that demonetization have

led to increased use of digital payments applications, whereas none of the respondents strongly disagree

that demonetization have led to increased use of digital payments applications which is least from the

population.

Table no.3.4

Showing factors that influenced respondents to adapt to mobile-wallet.


Security 2 4%

Retailers widely accept

payments by mobile wallet 3 6%

I like to try new technologies 6 12%

Access to coupons / rewards

/discounts 7 14%

Easy and quick cashless

transactions 27 54%

Others 5 10%

TOTAL 50 100%

36.00%

46.00%

14.00%

4.00%0%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

Demonetisation leading to use of Digital Wallet

Strongly agree

Agree

Neutral

Disagree

Strongly disagree



ISSN NO: 0022-1945

Page No:1058

Graph no.3.4: showing factors that influenced respondents to adapt to mobile-wallet.

The bar graph above depicts that for majority of the respondents’ easy and quick cashless transactions is the

factor that influenced them to adopt mobile wallet. Security is the factor for a least percentage of the

respondents to adopt mobile wallet.

4) FINDINGS

1. The majority of the respondents prefer cash as their preferred mode of payment than any other mode.

2. The report presents that most of the respondents are aware of Digital Wallet applications.

3. From the analysis presented it is found that Paytm is the Mobile wallet application which is the most popular

among the respondents than various other Mobile Wallet Applications in the market.

4. Majority of the respondents wants their transactions to be Digitalized and cashless in future.

5. The report shows that a majority percentage of the population load 500/- to 1000/- on their Digital Wallet.

6. Most of the respondents agree that Demonetization has led to the increasing use of Digital Wallet.

7. Online shopping is the purpose of using Mobile Wallet for majority of the respondents.

8. Easy and quick cashless transaction is the major factor which influenced respondents to adopt Mobile Wallet

Applications.

4.00%6.00%

12.00%14.00%

54.00%

10.00%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

Security Retailers

widely accept

payments

bymobile

wallet

I like to try

new

technologies

Access to

coupons /

rewards

/discounts

Easy and

quick cashless

transactions

Others

Consumers adoption towards Mobile Wallet



ISSN NO: 0022-1945

Page No:1059

9. Security concerns are the major drawbacks of M-Wallets applications according to majority of the

respondents.

5) SUGGESTIONS

1. The study shows that majority of the respondents are still continuing with cash as a mode of payment. The

company must showcase the various benefits of using Mobile Wallets and influence the target consumers as

most of the respondents are already aware of Mobile Wallet concept.

2. Paytm is the most popular brand of Mobile Wallet application in the market at present; hence all the Wallet

application should try to come up with various strategies to match up with the top competitors.

3. The company must try to come up with various discount offers to attract more customers to use wallet

application, as the study shows that majority of the respondent’s load 500/- to 1000/- in their preferred Mobile

Wallet and use them on a weekly basis.

4. As the respondents want Mobile Wallet to be widely available in India this gives the wallet application to

widen its boundaries to various other states than just concentrating in Bangalore, Karnataka.

5. There is a great scope to extend its operations to the online shopping business by introducing the application

to be used in for selling various cosmetic products related to spa/ salons.

6. Wallet application must ensure to provide a secure mode of payment as the respondents find this factor as a

major drawback of any M- Wallet application.

7. Wallet application gives extra bonus to every transaction done, but would also be recommended to increase

discounts and offers to users to use the application on a regular basis.

8. Consumers find their information are not being confidential to be the major drawback of M- Wallets and this

reduces the depressing adoption of using M-Wallet. The company must take up major steps like educating the

users to use their biometric to login to their accounts, or a retina scan etc. which will ensure users a safe

transaction.

6) CONCLUSION

Digital wallets are quickly becoming mainstream mode of online payment. Consumers are adopting digital

wallets at an incredibly rapid pace, largely due to convenience and ease of use.The report concludes the

Consumers Behavior towards Digital Mobile Wallet applications which includes consumers awareness,

factors influenced to adopt Mobile Wallets, preferences of payments and applications, risk and challenges

faced by the respondents and the reasons for using the various applications.



ISSN NO: 0022-1945

Page No:1060

From the study conducted it can be concluded that consumers are willing to adapt to the current technological

advancements in the country. The report shows that Pay tm is the most used Mobile Wallet application among

all other wallets. The results indicate that there exists an untapped market for digital wallets both in terms of

increasing awareness as well as its usage. Online shopping emerged as the prime purpose for usage of digital

wallets. The study observed that respondents prefer using wallets because they save time and are easy to use

and access. However, safety of money transacted remains their major concern for the respondents. Security

issues in terms of fear of cash loss are the prime barriers to the adoption of Mobile Wallet. The researcher can

understand that there is a growing demands for Mobile Wallet applications hence, widening the scope of

Mobile payment Industry.

REFERENCES

Asongu, Simplice A., and Jacinta C. Nwachukwu, “Recent Finance Advances in Information Technology for

Inclusive Development: A Survey.” African Governance and Development Institute, 2017

Chiu, Iris H-Y, The Disruptive Implications of Fintech-Policy Themes for Financial Regulators (July 21,

2016). Journal of Technology Law & Policy, Vol. 21, No. 1, 2017.

Dorfleitner, G., Hornuf, L., Schmitt, M., & Weber, M. (2017). Definition of FinTech and Description of the

FinTech Industry. FinTech in Germany, 5-10. doi:10.1007/978-3-319-54666-7_2

Garg, P., & Panchal, M. (2017, 04). Study on Introduction of Cashless Economy in India 2016: Benefits &

Challenge’s. IOSR Journal of Business and Management,19(04), 116-120. doi:10.9790/487x-190402116120

Guild, J. (2017, 08). Fintech and the Future of Finance. Asian Journal of Public Affairs,10(1).

doi:10.18003/ajpa.201710

Mazzotta, B. C. (2017, October 05). The Countries That Would Profit Most from a Cashless World.

Michael Zucarro, L. B. (2016). Financial Inclusion and the Payments Industry. Competition Forum; Indiana,

14 (2), 237-242.

Pollari, I. (2016). THE RISE OF FINTECH: opportunities and challenges. JASSA TheFinsia Journal of

Applied Finance: Sydney (3), 15-21.

Skinner, C. M. (2016, December 18). The best FinTech research of 2016.

Soule, M. (2016). Is Fintech Eating the World of Financial Services, One API After Another?

Communications & Strategies; Montpellier (103), 177-184, 215.



ISSN NO: 0022-1945

Page No:1061

Philip Kotler- Marketing Management

Michale R. Solomon- Consumer Behaviour

Leon G. Schiffman, joseph Wisenblit- Consumer

Websites:

https://www.slideshare.net

www.wikepedia.com

http://www.scielo.cl/pdf/jtaer/v7n1/art08.pdf

http://www.iresearchservices.com

www.ziadaa.in s

www.trisysit.com

*************************



ISSN NO: 0022-1945

Page No:1062

digitalwallet applications: ushering the digital …

Documents