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PARADIGM SHIFT IN CONSUMER CULTURE IN BANKING AND FINANCE

SECTOR: A STUDY ON CONSUMER PERCEPTION OF DIGITAL PAYMENTS AND
CASHLESS TRANSACTIONS WITH SPECIAL REFERENCE TO PAYTM AND G...

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 International Research Journal of
Management Sociology & Humanities

ISSN 2277 – 9809 (online)

ISSN 2348 - 9359 (Print)

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IRJMSH Vol 10 Issue 4 [Year 2019] ISSN 2277 – 9809 (0nline) 2348–9359 (Print)

Paradigm Shift in Consumer culture in Banking and Finance sector: A

study on consumer perception of digital payments and cashless
transactions with special reference to Paytm and Google-Pay
Dr. R. Prema.
Assistant Professor,
Department of Commerce with Computer Applications,
Dr.N.G.P. Arts and Science College (Autonomous),
Coimbatore.

M. Rajakrishnan,
Assistant Professor,
Department of Commerce with Computer Applications,
Dr.N.G.P. Arts and Science College (Autonomous),
Coimbatore.
Abstract:
Products either through internet banking or mobile banking using smart phone or card
payment are called as digital payment. The last decade has seen incredible growth in use of internet
and mobile phone in India. Growing use of net, mobile penetration and Indian government’s
initiative of Digital India is acting as catalyst which leads to exponential growth in use of digital
payment. Customers are being expedited by reducing their visits in banks and that they will do
their transactions via web or ATM Machines rather than in person visiting the branches. It enables
a Paradigm Shift in Consumer culture in Banking and Finance sector in India. Paytm and Google-
Pay are the major players in the country for digital payments.
Keywords: Consumer Culture, Digital payments, Google-pay, Paytm
Digital Payments – Definition
The Payment and Settlement Act, 2007i has defined Digital Payments. As per this any
“electronic funds transfer” means any transfer of funds which is initiated by a person by way of
instruction, authorization or order to a bank to debit or credit an account maintained with that bank
through electronic means and includes point of sale transfers; automated teller machine
transactions, direct deposits or withdrawal of funds, transfers initiated by telephone, internet and,
card payment.
New Modes of Digital Payments
In addition to UPI which was introduced recently, several other modes have been introduced by
NPCIii. They are listed below and their details are given in the Glossary.
 Bharat Bill Payment System (BBPS)
 Bharat Interface for Money (BHIM)
 Bharat Quick Response Code Solution (Bharat QR)
 Growth Drivers for Digital Payments
 In 2017-18, the Volume segment in Digital Payments is dominated by Debit Cards, PPIs
and IMPS. These, together constitute close to 50 % of the total volume of Digital
 Payments. Their combined share in 2011-12 was ~ 14%.

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 The Value segment in Digital Payments is dominated by RTGS and NEFT. These together
constitute ~ 53 % of the total value of Digital Payments, which is almost same as in 2011-
12.
The digital payment revolution in India
In the past two years, digital payment transactions have witnessed tremendous growth in
India. New payment modes have changed the digital payment network by increasing person-to-
person (P2P) as well as person-to-merchant (P2M) payments. Payment methods such as the Bharat
Interface for Money-Unified Payments Interface (BHIM-UPI), Aadhaar-Enabled Payment System
(AEPS) and the National Electronic Toll Collection (NETC) have helped to popularise the digital
payments and made payments easy to use and track.
The Unified Payment Interface was developed under the Government’s Digital India initiative and
is run by the RBI. The UPI is a system that rules several bank accounts into a single mobile
application (of any participating bank), integrating several banking features. The AEPS is a bank-
led model that facilitates online interoperable financial transactions at PoS (Point of Sale or micro
ATMs) with the business correspondent (BC) of any bank using Aadhaar authentication. Aadhaar
card is 12-digit unique identification numbers linked to a citizen’s basic demographic and
biometric data.
Transforming the digital payments landscape - Paytm:
Paytm is a Reserve Bank of India (RBI)-approved e-wallet, i.e., the user’s money is secured
under the Escrow account with a nationalized bank. The security feature and straightforward
interface build Paytm the foremost favored digital payment platform in India. Paytm uses Verisign-
certified SSL (Secure Sockets Layer) 128-bit coding technology. This ensures that the online
information of the user, i.e., the password and other financial details, is safe, thus providing greater
protection to users.
This on-line payment system isn't solely secure however additionally strong. One of Paytm
Success Story is it will handle around 5000 transactions per second. A high capability of
transactions has been created potential by the implementation of a really easy however effective
and safe payment methodology. Users will merely pay by either scanning a QR code of the search
or by getting into the mobile variety of the recipient. The Paytm wallet also has an option where a
user can either safely park his or her money in the application and pay from the money in the wallet
or pay directly from the bank via the applying. The combination of secure transactions and high
capability has created Paytm one in every of the foremost favored payment applications. More and
more number of people are now using Paytm to pay for their daily utilities and other expenses.
Google Pay:
Google Pay, formerly referred to as Google Tez is probably going to be one amongst the
foremost vital and helpful apps that the corporate has launched in recent years. This app is different
from the Google Pay app that is available in other parts of the world. The distinction here is that
Google pay money for India relies on Unified Payments Interface, a framework that was created
by Reserve Bank of India to make online payments easier between different banks. The app was
at first launched as Google Tez and later rebranded to Google Pay. According to a report, the app
has crossed the one hundred million installs on Google Play Store.
Digital transformation is the new normal in India
Businesses across the country have additionally created important investment in digital
technologies. The banking, monetary services and insurance (BFSI) sector is that the best example
of digital transformation in India. For example, banks earlier used to pride on the number of
branches they had, today banks like DBS have completely disrupted the sector. The conception of

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IRJMSH Vol 10 Issue 4 [Year 2019] ISSN 2277 – 9809 (0nline) 2348–9359 (Print)

a digital bank and virtual debit/credit cards is shortly changing into mainstream. Technology firms
are heavily finance in AI and Blockchain among alternative technologies.
Review of Literature:
Malhotra and Singh (2010)iii conduct an exploratory study and make effort to present the
current status of Internet banking in India and the extent of Internet banking services offered by
Internet banks. In addition, it seeks to examine the factors affecting the extent of Internet banking
services. The results reveals that the private and foreign Internet banks have performed well in
offering a wider range and more advanced services of Internet banking in comparison with public
sector banks. He also highlighted the determinants affecting the extent of Internet banking services,
size of the bank, experience of the bank in offering Internet banking, financing pattern and
ownership of the bank are found to be significant.
Research Methodology
This study is carried out to estimate the status, potential and importance cashless economy
in the country. The study focuses on extensive study based on secondary data. The data has been
collected with help of e-books magazines, newspapers, research article, research journal, e-
journals. The research will be conducted with objective to find out the extent towards cashless
transaction. This study is based on primary data, that have been collected through means of well-
structured questionnaire.
Research Objectives
 To study the acceptance level of Paytm and Google pay in India as an alternative to the
cash transactions
 To study the flexible services offered by the Paytm and Google pay
 To find out whether India going cashless has helped our citizens.
 To find out whether India will turn out to be a successful cashless society.
Findings
 In recent times, due to awareness programs, technical developments Govt. initiation and
promotional activities cashless transactions using Google pay and Paytm have been
increased.
 Now-a-days, it could be seen that the google pay and Paytm are being used widespread by
replacing cash transactions.
 Network down problem exists in some rural areas and people experience difficulties in
making transactions. The accessibility and sound telecom network is essential for this.
 Day by day thousands of cyber theft risks are happening because of the absence of
improved security layers in the system.
 Continuous investment in information technology is the need of the hour to improve
security and easiness of transaction.
 From cash to cashless transactions, certainty, easiness and security are considered as the
most important factors.
 It is very important to address the complications in shifting mind-set and perception of
people in moving online payments.
 India has a big consumer market, and the small retailers play a vital role. Digital payment
infrastructure is become possible with the help of Paytm and Google pay for them.
 Nearly 90 percent of the respondents who practice digital payment system felt it was easier
and quicker to use and transact their payments and the procedures are very simple.

International Research Journal of Management Sociology & Humanites ( IRJMSH )

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IRJMSH Vol 10 Issue 4 [Year 2019] ISSN 2277 – 9809 (0nline) 2348–9359 (Print)

 The study has found that only 2 percent of the respondents whose age above 50 feel that it
is tricky to follow the procedures and hence opine physical transactions are much better
than digital options and are more reliable and satisfying.
 8% of the respondents are no excited about the introduction of this method as it’s a not a
conventional theory but a concept that has finally evolved during the course of time.
 Majority of the respondents (i.e., 66 percent) feel that Google pay and Paytm will help
India for moving towards a successful digital economy.

Recommendations
Still many people, who don’t have any formal education are not aware how to engineer
digital payment system. Appropriate awareness may be created and it is necessary to educate the
possible areas to cashless payments. Continuous innovation in Information Technology enabled
digital payment system may undoubtedly compel the society’s accessibility to cashless payment.
Any policy that promotes cashless payment system will not affect the economy
immediately. So the effect of implementing digital payment on economic growth can only be
significantly observed in the long run. It is suggested that the use of biometric identity such as
finger prints and eye scan would be the very safe option and exceptionally hard to duplicate.
All bank account holders may be compelled to use the plastic money. The development of
digital distraction, whether led by government or not, crafts several important communal
challenges. The societal challenges created by digital disruption should be tackled with grouping
of managerial modesty and commercial fortitude.

Conclusion
It is evident from the above analysis that most of the respondents are moving towards
cashless economy and using Paytm and Google pay for making digital payments. But it should be
accepted that one biggest problem in the working of digital economy in India is cybercrime and
unlawful access to crucial records. Hence, it’s essential to make strong Internet Security from
protection against online fraud. Still many people in India are illiterate who live in rural villages.
For a better cashless system in India, Paytm and Google pay have to bring precision and
effectiveness in e-payment system, strategies used by Central Government and the Central Bank
to encourage cashless transactions by licensing payment banks, encouraging mobile wallets and
retreating service charge on cards and online payments. A fiscal literacy campaign may be
conducted periodically to prepare population aware of advantages of digital banking.

References:
i
Digital Payments Book Part 1 – NITI Aayog
ii
Digital Payments Book Part 1 – NITI Aayog
iii
Malhotra, P. and Singh, B. (2010). An analysis of Internet banking offerings and its determinants in India. Internet
Research Vol. 20 No. (1), 2010 pp. 87-106

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