Akshay Kumar R (Report 2020) New

CHAPTER 1
INTRODUCTION
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Abstract
The last decade has seen tremendous growth in use of internet and mobile phone in India.
Increasing use of internet, mobile penetration and government initiative such as Digital India
are acting as catalyst which leads to exponential growth in use of digital payment. Electronics
Consumer transaction made at point of sale (POS) for services and products either through
internet banking or mobile banking using smart phone or card payment are called as digital
payment. The consumer perception of digital payment has a significant and positive impact
on adoption of digital payment. The structured questionnaire was used as research tool for
understanding consumer perception of digital payment. Primary data was collected from 100
respondents in Bangalore. frequency analysis was used to analyze the responses. it indicate
that there is no significant variance in consumer perception based on the demographic factors
such as gender, age, profession and annual income of the patients. However, education was
found to significant influence for adoption of digital
INTRODUCTION
Commerce is going mobile. In 2014, smartphones became the dominant internet access tool
around the world, replacing desktop and laptop computers, and by 2020, there will be 2.6
billion connected smartphones in the world. 1 Metcalf’s law, the law that “the value of a
telecommunications network is proportional to the square of the number of connected users
of the system,” has never had a more powerful example than the growth of the smartphone.
With every new smartphone user, the potential for interconnectivity through chat apps such
as WeChat and social media such as Facebook and Snapchat increases exponentially, and it’s
changing the fabric of global society. Along with the social change enabled by mobile,
commerce is being impacted at the same pace. E-commerce is growing at a rate of 32%
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A large part of this growth originates from mobile commerce. In North America and Europe
combined, online sales initiated by mobile devices grew by 58% between 2014 and 2015,
compared to just 3% for desktop-initiated commerce.2 In emerging markets, the importance
of mobile commerce is even higher, as the mobile network is the primary infrastructure for
online commerce. While the growth of mobile online commerce has been rapid, use of a
smartphone for purchases at a physical point of sale (POS) is nascent, and the growth rate is
much slower than that of mobile online. This is logical, since the smartphone already “lives”
in the virtual world. Its transition into a device for POS usage is complicated by a lack of
accepting terminals, conflicting protocols, and limited distribution of payment-enabled
phones. All of these factors are changing quickly, however, and the growth rate for physical-
world payments is increasing. In Europe, for example, the acceptance and usage of
contactless card payments has quickly accelerated. Visa reported in May 2016 that one in five
in-person Visa-processed card payments is now contactless.3 MasterCard and Visa have set
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compliance dates for all POS terminals to accept contactless payments by January 2020 at the
latest. Mobile proximity payments use the same standards as contactless cards, using the
near-field communication (NFC) and EMV standards. As two in three phones will be NFC-
enabled by 2018, this means that acceptance for mobile proximity payments will become
ubiquitous in the near future.
DEFINING THE DIGITAL WALLET The digital wallet is the engine of mobile commerce.
Without a digital wallet, consumers need to enter a wealth of information into a form
constrained by the smartphone’s screen size. While the mobile wallet space for in-store
payments has only emerged with the launch of Apple Pay in the autumn of 2014 (soon
followed by Google’s Android Pay and Samsung Pay), the concept of a digital wallet has
been in-market since the early days of online commerce. PayPal created a digital wallet to
support the first major online marketplace, eBay. While PayPal attempted to broaden the
offering’s appeal outside of eBay for several years, the concept of storing payment
information with an online provider to enable purchases outside of eBay initially didn’t catch
on. Amazon 1-Click emerged in 2006, raising the bar in terms of user experience (UX) and
expanding merchant and customer vision of the digital wallet’s capabilities. Since then, other
digital and mobile wallets have emerged, and there is now a variety of different approaches to
online and mobile proximity payments, all falling under the general description of “digital
wallet.”
A digital wallet is a software application with the following base functionality:
 It offers secure enrollment of the user (application download, identity check) and secure
provisioning of credentials (e.g., user ID and password for wallet access).
 It offers the ability for the user to securely provision and store customer-identity
information (e.g., email address), payment information (e.g., credit card data), and shipping
address details. The user can preselect a payment method within the wallet application to
execute commerce transactions (i.e., pay merchants online, in-app, or in-store).
 The funding of the wallet payment may come from a debit or credit card, prepaid card,
bank account, e-money account, virtual currency, or any other store of value.
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ECONOMICS AND GROWTH POTENTIAL
In terms of economics, mobile wallets tend to be an enabler of commerce rather than a

standalone revenue generator for organizations that offer them. For retail financial
institutions, the value rests with the potential to increase transaction volume for their payment
cards by ensuring that the financial institution’s card is top of wallet within the mobile
offering. An additional benefit is the potential to increase customer retention by increasing
the connection between the customer and his or her financial institution. Depending upon the
ecosystem, wallet providers can generate revenue by taking a commission on sales made
through the wallet. For instance, in the United States, Apple Pay charges 0.15% of the
payment value to issuers for transactions handled through the wallet. Marketplace wallet
providers, such as Alipay, charge merchants an upfront fee to participate in the marketplace,
along with a commission on each sale. Others, such as Baidu Wallet, make their money
through search and display advertising on their platform.
With the growth rate of mobile and online commerce, the plethora of smartphones, and the
variety of approaches being taken to deliver a digital wallet, it’s clear that the space is going
to grow rapidly in virtually every corner of the globe.
THE EVOLUTION OF DIGITAL WALLETS
The combination of widespread internet access, increased bandwidth, and devices that can
capitalize on that bandwidth to deliver a new customer experience is driving the explosion in
wallet development and customer usage. And while physical-world mobile wallets and online
digital wallets are currently on separate but parallel development paths, it is inevitable that
the lines between the two will blur and hybrid payment tools using online and mobile will
emerge. It’s impossible to predict the path of development with certainty, but there are a few
signposts and landmarks that can guide the vision. The following is a discussion of the
possible evolutionary paths for different types of digital wallets.
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REDUCING F RICTION:
The evolutionary path for all wallet technologies will be driven by the desire to reduce
friction in the transaction to minimize cart abandonment and optimize customer satisfaction.
While online and mobile commerce sites will continue to offer a default account-on-file
payment mechanism, the trend will be toward variations on one-click buy, either through a
proprietary buy button in the app or on the site or through a third party, such as PayPal. In
either case, the digital wallet delivered is different from the traditional wallet model in which
the customer can choose from an array of payment alternatives. For buy buttons, only one
payment alternative is generally available so that the purchase process is simple, clean, and
fast. Some in-app alternatives, such as Uber’s app, offer a limited choice of payment types
(e.g., “business” or “personal”). But in general, simple is better.
Along with the continued simplification of digital wallets to reduce friction, the transaction
will become plumbing in many cases, whereby the payment is embedded in the overall
transaction. Uber is a good example of a transaction process in which the payment has
functionally vanished. Once the customer arrives at his or her destination, the Uber driver
closes out the trip and Uber sends the receipt for the trip to the customer via email or text.
The payment is handled automatically, requiring no effort from either the driver or the
customer, a huge reduction in the friction previously encountered in paying for a taxi with a
card, or even cash.
What’s really interesting is what happens to the customer experience once the payment piece
is integrated into other activities. With payments out of the way, the entire commerce process
and customer experience can be reimagined, resulting in very new and different ways to do
business.
REGIONAL D IFFERENCES
The digital wallet world is dividing along geographic lines based on the relative
sophistication of the payment ecosystem in different markets. Fully developed markets such
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as North America and Europe are moving to NFC and in-app capabilities that can be
supported by the consistent availability of 4G mobile bandwidth and sophisticated retail POS.
In China and India, the mobile wallet is mainly used online to shop on marketplaces like
Alipay, Tenpay, and Paytm.
In developing countries where very little payment infrastructure has been in place,
completely new payment platforms have been developed to capitalize on the ubiquity of basic
mobile devices that can use text-based payments. In many cases, these payment platforms
have been developed and are being managed by MNOs rather than traditional financial
institutions and payment processors. The best known example is M-Pesa, operated by
Vodafone and its subsidiaries. Vodafone’s M-Pesa mobile money transfer and payment
service is the leading mobile money product in the world. It has more than 20 million active
users across Africa, the Middle East, Asia, and (Eastern) Europe. With services like M-Pesa,
financial services become available to the 2.5 billion people that have limited access to
financial services.
WALLET ECONOMICS
Up to now, wallet business cases have been supportive of other economic value. For instance,
Apple Pay charges a nominal fee to issuers for each transaction, but its intent is not to make
money on the usage of Apple Pay. Instead, it wishes to add more value to the Apple product
offering and increase the likelihood that a customer will continue to purchase Apple hardware
and remain in the Apple ecosystem. Digital wallet providers generally charge merchants a
transaction fee, but they do not charge directly for the wallet itself.
In the online space, digital wallets help merchants to convert more customer digital shopping
carts to actual sales by providing a seamless checkout experience. As there are no extra costs
involved, online merchants have a clear economic case to use digital wallets.
Amazon has recognized that the loyalty of its customers can be valuable to other merchants.
With Amazon Payments, consumers can use their Amazon wallets to pay on merchant
websites that have contracted with Amazon Payments.
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For proximity payments, the business case depends on value added services. To make mobile
wallets attractive for consumers and merchants, they should offer value-added services like
rewards, coupons, and targeted advertisements.
Going forward, the business case for wallets will continue to be embedded in other aspects of
the provider’s business. It’s very difficult for a digital wallet to provide sufficient value to act
as a stand-alone profit center.
One exception is Paysafe Group, which reports separately on its digital wallet business.
Paysafe Group is a global provider of payment solutions in e-commerce, online gambling,
and online gaming verticals. The company’s Skrill and Neteller wallet offerings provide
merchants with more than 100 payment options and 40 currencies. In 2015, Paysafe’s Digital
Wallet business had reported revenue of US$159.1 million, 78% higher than 2014’s US$89.6
million; this growth was driven by the Skrill acquisition. On a pro forma constant currency
basis, digital wallets saw 17% year-on-year revenue growth. Digital Wallet contributed 29%
of Paysafe Group’s second-half 2015 pro forma fee revenue.
For companies such as Paysafe, PayPal, Alipay and others, digital wallets are core business.
With their comprehensive offering, they are able to support merchants dealing with the
complexities of doing business globally.
THE WAY FORWARD FOR DIGITAL WALLET PROVIDERS
FINANCIAL INSTITUTIONS
Mobile and digital wallets provide financial institutions with opportunities to deepen
customer relationships, improve customer retention, position their payment cards as top of
wallet, and protect their customers and the institution from fraud. Given the evolution of the
space, it is no longer a question of whether a financial institution has a wallet strategy but is
instead a matter of what the strategy incorporates and how that strategy is implemented. For
mobile wallets in the physical world, the alternatives are to offer one or more of the existing
OS/OEM wallets, Apple Pay, Android Pay, Samsung Pay, etc., offering a proprietary
financial-institution-branded wallet, or providing customers with both alternatives.
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Depending on the institution’s position, any of these alternatives could be appropriate. For
major financial institutions with very well-known brands, a branded wallet creates value for
their loyal customers and provides additional marketing opportunities, positioning the
institution as a leader in the technological evolution of the space. For smaller or regional
financial institutions, a proprietary wallet strategy should center on customer retention and
value proposition enhancement. The integration of the wallet into a financial institution’s
mobile banking app can enhance the UX by simplifying onboarding (the wallet can be
automatically provisioned by the financial institution) and by increasing messaging
opportunities with the customer. With any proprietary financial institution wallet, it is
essential that the UX at the point of sale is as frictionless as possible. Additional security
requirements or other processes that add friction to the transaction could result in customer
rejection of the wallet and migration to an alternative with less friction, possibly at another
institution.
Whether they decide to deliver a proprietary wallet or not, financial institutions should offer
customers the ability to use the third-party OS wallets (Apple Pay and Android Pay) and
possibly the OEM wallets (Samsung Pay, LG Pay, etc.). These wallets are already moving
toward critical mass and will be the preferred choice for a large segment of the customer
base. If the institution’s payment cards are well-positioned and are the customer’s first
payment choice, there is little risk that offering a payment card in a third-party wallet could
result in disintermediation.
For pure digital wallets, the space is almost entirely controlled by either the online merchants
or the third-party wallet providers such as PayPal or Amazon Payments. Financial institutions
should work to ensure that their payment card is top of wallet and the preferred card for
online use. Several new technologies are being introduced to help ensure the security of
online transactions, and offering a more secure online transaction could position an institution
well for the online payment space.
CARD NETWORKS
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The global card networks are rolling out several digital wallet initiatives. The first pillar of
their strategy is to enable card issuers to offer digital wallet services to their customers (in a
businessto-business-to consumer model). Examples follow:
 White labeling: Offer (smaller) banks that do not want to invest in their own wallet a
turnkey solution. Visa, for instance, recently announced its Visa Digital Commerce
App as a white-labeled solution. According to the company’s website, “issuers
provide their branding and select the specific features to deploy, including tokenized
contactless payments, fingerprint authentication, card controls, alerts, account
balance, transaction history and more.”4
 Acceptance: Connect issuer-branded wallets (via application program interface, or

API) to the acceptance network provided by the card networks. MasterCard’s API
Wallet strategy enables a bank-branded wallet to connect to the Masterpass
acceptance network and get access to checkout, fraud detection, authentication, and
other services.
 Digital enablement: Provide tokenization services to bank and third-party digital

wallets. The card’s primary account number is replaced with an alternate card number
called a token, and the token is then delivered to the mobile device through a process
called digitization.
The second pillar is the delivery of digital wallet services to consumers, to enable online
commerce. Examples are Visa Checkout, Masterpass, and Amex Express Checkout.
Visa Europe’s V.me wallet was retired from the market in 2015, to be replaced by Visa
Checkout (live in 16 countries and expanding to six more markets this year). Masterpass
launched in 2013 and is now available in 33 markets globally. Both wallets are brand-
agnostic and can contain cards from multiple brands.
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NEW ENTRANTS
The global rollout of contactless payments by the card networks is good news for Apple Pay,
Android Pay, and others. It can be expected that mobile proximity payment usage will
accelerate quickly.
However, the fastest growth for the “Pays” may come through a different channel: in-app
payments. Apple, for instance, reported that payment volume within apps more than doubled
in the second half of 2015 as compared to the first half of the year. Google announced at its
I/O developer conference in May 2016 that several major app players, such as Airbnb,
Ticketmaster, and Uber, have added Android Pay to the in-app checkout, and they have
recently begun aggressive U.S. marketing of the in-app capability.
The two channels, in-store and in-app, will reinforce each other in the use of mobile
payments. In-store payments provide the visibility of the payment method, making people
familiar with the brand and the payment experience. When shopping online, consumers will
recognize the brand and be more inclined to use one of the Pays than a competing payment
method.
The Pays’ wallets will enable merchants to integrate payments over online and offline mobile
channels. Consumers will be able to store all their receipts in one place, and receive and
redeem rewards, discounts, and other loyalty benefits.
The last step will be for the Pays to move to the browser environment. Apple will enable
Apple Pay for Safari in the fall of 2016, but that is a small segment of the overall desktop and
mobile browser market. Inclusion of all browsers will support merchants implementing an
omnichannel strategy
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MERCHANT STRATEGIES
Starbucks was an early adopter of digital wallets and mobile proximity payments, and it
proved that the proposition worked for its customers. With its strong brand and loyal
customer base, the coffee seller was successful in launching the star example of a mobile
payments implementation.
The question is if Starbucks would make the same decision today. There is a high probability
that the company would have chosen to add third-party wallets to its own app, enabling
payments but not developing its own payment application. Indeed, Starbucks in the U.K.
accepts Apple Pay and Android Pay.
Starbucks is a rare example of merchant success. Many retailer initiatives have failed to
deliver, as shown by the recent failure of MCX in the U.S. (CurrentC wallet).
There may be merchants that are able to launch their own digital wallet solutions and include
payment. Still, we believe that the vast majority of merchants will choose to implement
thirdparty wallets for payments.
It has been said that every disruption creates opportunities and one such disruption was the
announcement of demonetization by Prime Minister Mr. Narender Modi on 08 November
2016. Demonetization created huge growth opportunity for digital payment in India and the
digital wallet companies garbed the opportunities with both the hands to expand their market
share. Demonetization has presented a unique platform for adoption of digital payment, as an
alternative to cash for Indian consumers.
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Adoption of cashless transaction has been significantly pushed by Prime Minister Mr.
Narender Modi as part of government reforms after demonetization of high value currency of
Rs. 500 and 1000 (86% of cash circulation). The demonetization resulted in unprecedented
growth in digital payment. By February this year, digital wallet companies had shown a
growth of 271 percent for a total value of US$2.8 billion (Rs. 191 crores) [1], Indian
government and private sector companies such as Paytm, Freecharge and Mobikwik had been
aggressively pushing several digital payment applications, including the Aadhaar Payment
app, the UPI app, and the National Payments Corporation of India (NPCI) developed the
Bharat Interface for Money (BHIM) app. Digital transfers using apps has brought behavioral
change and helped in the adoption of digital payment. This has resulted in ease of transfer of
money in rural areas which was not touched earlier by the digital payment method. Now
many foreign investors want to invest in digital payment industry which is new attractive
destinations because of scope of tremendous expansion in India.
There are number of facilitators which are leading to the growth of digital payment and
transition from cash economy to less cash economy. These facilitators include penetration of
internet connectivity on smart phones, non-banking financial institution facilitating digital
payment, one touch payment, rise of financial technology sector and push by government
either by giving incentives or tax breaks. These all factors are creating positive atmosphere
for growth of digital payment in India.
Rationale for the Study
Doing payments via mobile phones has been in use for many years and is now set to explode.
Also mobiles are increasingly being used by consumers for making payments. “Digital
Wallet “has become a part of consumers which are nothing but smart phones which can
function as leather wallets. Digital wallet offered many benefits while transferring money
such as convenience, security and affordability. Growth in technology has opened many
modes of payments through which consumers can do transactions which are more
convenient, accessible and acceptable, consumers have an inclination towards mobile
payment apps usage. Offering various benefits such as flexi payment digital wallet brands are
providing extra convenience to consumers. Major factor in adoption of digital wallet is
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convenience in buying products online without physically going from one location to another
location. There has been many studies conducted in past on mobile payment application to
find consumer interest and they found consumer has positive inclination for the same. The
factors such as perceived ease of use, expressiveness and trust affect adoption of digital
wallet as payment method. These factors are termed as facilitators and plays crucial role in
adoption of digital payment solution. Usage of digital wallet among youth was found to be
associated with societal influence and usefulness, controllability and security, and need for
performance enhancement. Premium pricing, complexity, a lack of critical mass, and
perceived risks are the barriers to adoption of digital payment systems. Digital wallet
payments bring extra convenience to shoppers by offering flexible payment additions and
accelerating exchanges. Digital wallets offer the consumers the convenience of payments
without swiping their debit or credit cards. Instant Cash availability and renders seamless
mobility is also a unique feature of these digital apps, for instance the balance in your Paytm
wallet can be very easily transferred to your bank account as and when you want. The
percentage of cash for transactions has seen a rapid decline in the past few years in India. In
2010, the percentage of cash in all payments was 89% compared with 65% in 2017. This
rapid decline is a result of an increased adoption of non-cash instruments such as cards and
digital payments such as mobile wallets, electronic transfers, etc. Stored value instruments
like mobile wallets (Paytm, Mobikwik, Citrus, etc.) and prepaid and gift cards have made
payments though
internet devices convenient and easy. India represents one of the largest market opportunities
for digital payments. With a population of 1.25 billion, India accounts for roughly 18% of the
global population. The two key drivers of digital payments-mobile phones and internet users
are already well established in India. To date, India has about 1.0 billion mobile phone
subscribers and 300 million internet users, ranking 2nd on both metrics globally.
Statement of Problem As continuation of demonetization process, the digital wallet

transaction activities are implemented impact the significant changes in the behavior of
consumer. In India most of the consumers are heavily dependent only on the cash economy,
now the consumers have to switch from cash to cashless electronic transactions. There has
been a growth in consumers using more on digital wallet for purchase of products and service
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except few. Currently the government announced that all restrictions for the traditional cash
transaction and offers for electronic transfer push the consumers to adopt and implement
cashless transaction for their needs. In the context of the above, this study makes an attempt
to analyze and find out how the digital wallet transaction has caused to changes in the
behavior of consumers and level of awareness about the cashless transaction, faith of the
electronic transmission and problems of consumers while using digital wallet payment.
Solutions will then be proposed on how to enhance its services in order better to encourage
repeat patronage
and loyalty, and attract new customers.
Digital Payment Modes in India
There are several mode of digital payment available in India. These are:
Online or mobile wallets:

They are used via the internet and through smartphone applications. Money can be stored on
the app via recharge by debit or credit cards or net-banking. Consumer wallet limit is Rs.
20,000 per month and the merchant wallet limit is Rs. 50,000 per month after self-declaration
and Rs. 100,000 after KYC verification.
Prepaid credit cards:
Pre-loaded to individual’s bank account. It is similar to a gift card; customers can make
purchases using funds available on the card -and not on borrowed credit from the bank. Can
be recharged like a mobile phone recharge, up to a prescribed limit.
Debit/RuPay cards:
These are linked to an individual’s bank account. Can be used at shops, ATMs, online
wallets, micro-ATMs, and for e-commerce purchases. Debit cards have overtaken credit
cards in India. The number of debit cards in December 2015 increased to 630 million
compared to 22.75 in 2014.
AEPS:
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The Aadhaar Enabled Payment System uses the 12-digit unique Aadhaar identification
number to allow bank-to-bank transactions at PoS. AEPS services include balance enquiry,
cash withdrawal, cash deposit, and Aadhaar to Aadhaar fund transfers.
USSD:
Stands for Unstructured Supplementary Service Data based mobile banking. It is linked to
merchant’s bank account and used via mobile phone on GSM network for payments up to Rs.
5,000 per day per customer.
UPI:
The United Payments Interface (UPI) envisages being a system that powers multiple bank
accounts onto a single mobile application platform (of any participating bank). Merges
multiple banking features, ensures seamless fund routing, and merchant payments. It
facilitates P2P fund transfers.
Digital payments in India have been experiencing exponential growth and with growth of
internet and mobile penetration, in coming years the country is ready to witness a huge rush
in the adoption of digital payments. According to Ratan Watal , principal advisor Niti Aayog
and former finance secretary, digital payments grew 55% by volume and 24.2% by value in
2016-17 over the previous year. Data from the Reserve Bank of India (RBI) indicates that the
rate of adoption of digital payments had accelerated following demonetization last year but
has slowed in recent months of 2017. Total digital transactions in April 2017 of Rs109.58
trillion are 26.78 lower from Rs149.58 trillion in March 2017 .
The volume of digital transaction has witnessed exponential growth in volume and value
whether it is digital wallet, interbank transfer or transaction by debit or credit card. At
merchant places the number of card transaction at point of sale (PoS) terminal have witnessed
a huge serge which reflects that people have started making payment by debit card instead of
withdrawing cash from ATM to make payment. In January 2017 the number of transaction of
debit card increased to one billion from 817 million in previous year. It has been observed
that ATM transaction are more or less same at 700 million, the transaction at PoS terminal
has increased three times from 109million in January 2016 to 328 million in Jan 2017.
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According to Lokvir Kapoor, chief executive officer at PineLabs “the card transaction post
demonization saw huge growth because of infrastructure for the acceptance of card at
different merchant location.” PineLabs has helped this growth by deploying a significant
number of Pos at retailers across the country. Also the number of initiative such as cash back,
no transaction charge up to certain limit with further help in growth of digital transactions.
The government put pressure on banks to deploy one million addition Pos terminal in three
months boost the availability of PoS and by January 2017, their number rose to 2.52 million .
India is heading on the path of a major digital revolution. The future economy will be driven
by cashless transaction which will be possible only though digitalization of payment
mechanism at different location such as smart phone, internet banking, card transaction etc.
The focus of present study is to find how respondents are adopting digital payment. The study
collected response from 150 respondents and analyzed their perception, preferences and
satisfaction level of digital payment. It further identifies the barriers and challenges to the
adoption of digital payment. The Table 1 gives the top five mobile payment wallet of India.
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Table 1: Top five digital wallets in India.
Sl Wallet Name Key Features

no
Transferring money instantly to the bank from Paytm
1 Paytm account.
Paytm has launched an app password feature for Paytm
Wallet in order to ensure the money is safe even if the
customer lose or misplace his/her phone.
A customer can use Paytm even without a Smartphone.
2 Mobikwik Introduction of M-Wallet for easy storing and
transaction of money.
Instant recharge without sign-up.
Encrypted and highly secured transactions
User friendly mobile application.
3 Auto read of OTP.

PayUmoney Picking up the transaction where it dropped.
Risk monitoring
4 Citrus Fastest among all the digital wallets.
CitrusPay wallet offers and discounts,
5 Oxigen Send money to other mobile phones
Shows transaction history
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What Is An E-Wallet?
Think of a wallet in your pocket. You keep money in it and whenever you need to buy
something or pay for a service you received form someone else, you pull out wallet, take out
money and make payment. When you run out of money in your wallet, you refill your wallet.
E-wallet is your physical wallet completely turned in electronic form. There will be a wallet
where you will be able to keep cash and you can pay for goods and services. That is precisely
what an E-wallet is. So E-wallet is your wallet that has lost the physical form and taken
electronic form
In present world, smartphone has become essential part of daily life. Along with smartphone
production, a number of services have been generated to utilize the possible functions of
smartphones. Smartphones are used as communication devices, as socialized tool,
entertainment tool, internet access tool, and even payment tool. Due to technology, mobile
users can nowadays use their smartphones to make money transaction or payment by using
applications installed in the phone. Besides payment, people can also store receipts, coupons,
business cards, bills in their smartphones.
A mobile wallet is a much-advanced versatile application that includes elements of mobile

transactions, as well as other items one may find in a wallet, such as membership cards,
loyalty cards and travel cards. (Shin, 2016). Since last couple of years the utilization of digital
wallets has taken quite a leap. Digital wallets have been included as payment alternative by
many ebusiness players along with existing net banking or card based payment methods.
With smartphones becoming an inseparable part of one's life and hence a convenient way of
making digitalized payments, the adoption of digital wallets has been tremendously
increasing. Through digital wallets, the payment infrastructure with immense advancement in
technology has become highly consumer friendly. (Kunal Taheam, 2016). owever, the idea of
a digital wallet is not new. Indeed, Japan, America, Sweden and South Korea have already
rolled out cell phone-based digital wallet solutions. Consumers in those countries can use
their cell phones to pay for groceries, order drinks from a vending machine, and even identify
thdmselves at airline ticketing counters. (Rathore, 2016).
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E-Wallets in India
Considering the growing use of online shopping and online payments in India a handful of E-
wallet services have been started in India during last few years. Particularly during post
demonetization period, the use of E-wallets for online payments is growing at very high rate.
As per Reserve Bank of India guideline 'E-wallets' in India can be classified into three
categories.
Closed e-wallets:
These are wallets issued by an entity for facilitating the purchase of goods and services from
it. These instruments do not permit cash withdrawal or redemption. Hence, RBI approval is
not required for issuing them.
E.g. Cab services (Like Ola Cabs), e-commerce (like Jabong, First Cry, Flipkart) and mobile
companies create e-wallets for making payments towards purchase of products from them/for
usage of their services
Semi-Closed e-wallets:
These are wallets which can be used for purchase of goods and services, including financial
services at merdchant locations/establishments which have a specific contract with the issuer
to accept them. These wallets do not permit cfash withdrawal or redemption by the holder.
MobiKwik, PayU, PayTM, Citrus, and Airtel Money are the best examples under this
category of e-wallet.
Open e-wallets:
These are wallets which can be used for purchase of goods and services, including financial
services like funds transfer at any card accepting merchant locations [point of sale (POS)
terminals] and also permit cash withdrawal at ATMs/Banking Correspondents (BCs).
However, cash withdrawal at POS is permitted only upto a limit of Rs. 1000/- per day subject
to the same conditions as applicable to debit cards (for cash withdrawal at POS). E.g. M-Pesa
is an open wallet run by Vodafone in partnership with ICICI Bank. Airtel Money is a semi-
open wallet, which allows you to transact with merchants that have a contract with Airtel.
You can't withdraw cash or get it back. You'll have to spend what you load. Table 1 below
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provides details of popular E-wallets in India at a glance. These E-wallets are offered number
of players across various industries including private entrepreneurs which offers only and
only E-wallets and nothing else, banking industry players who have come up with E-wallets
to fight against the private players, and telecom industry players which have come with E-
wallets to leverage on their telecom infrastructure and customer base. Table 1 also provides
other details about given E-wallets like Promoter Company, availability of bank transfer
facility, availability of facility to send money on mobile, mobile platforms supported by E-
wallets and accessibility of Unified Payment Interface (UPI). UPI is a payment system that
allows money transfer between any two bank accounts by using a smartphone. It allows a
customer to pay directly from a bank account to different merchants both online and offline,
without the hassle of typing credit card details, IFSC code or net banking password
Top 15 Best Digital Wallets in India
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Do you know which are Top 15 Best Digital Wallets in India? If not, here is something
interesting for you. Here is a list of Top 15 Best Digital Wallets in India. Gone are days
where cash was required to perform any transaction. Now it is an era of digital money where
everything happens online with a click of a button. A need of physical wallet is nearly
removed, people are well acquainted with digital wallets. They use smartphones, smart
watches or tablet for making payment.
A digital wallet is a wallet where you can store money digitally. You can do online or offline
transactions using a digital wallet. A digital wallet is also known as mobile wallet or e-wallet.
Millions of people in India are doing a daily transaction using digital wallets. The primary
reason for using digital wallet is the ease of performing transaction and discount offers and
benefits provided by wallet service providers.
How to use Digital Wallets?

It is very easy to use Digital Wallet. Follow the steps given below to use e-wallet.
 Download the digital wallet app from the app store on the mobile device.
 Register using your email id & password. Some wallet also offers registration using a
mobile number.
 Once you are logging to your account you can select various payment options such as
credit/debit card, net banking transfer, ATM transfer, etc.
 After adding money, you can perform a transaction such as online shopping, mobile
recharge, DTH recharge, send/receive money etc.
Most of the online website offers integration with e-wallet. Most of the e-wallet offers
discount or cashback for making payment online.
Type of digital wallets in India

As per RBI guidelines, three types of digital wallets are available in India.
Closed Wallet – Closed wallet does not support withdrawal of cash or redemption. This
types of wallets are used for specific goods, product, and services of specific companies. Few
examples are MakeMyTrip, Jabong wallet etc.
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Open Wallet – The wallet that allows users to withdraw as well as redeem cash are known as
open wallets. Vodafone Powered M-Pesa, SBI buddy and HDFC chillar are examples of open
wallet.
Semi-Closed Wallet – Semi Closed Wallet are like closed wallet only. You cannot withdraw
or redeem cash from these wallets. However, these wallets allowed purchase of goods and
services at multiple companies. Few famous wallets in this category are Paytm, PayUMoney,
MobiKwik, Oxigen etc.
Advantages of using Digital Wallet

 Instant cashless payment, no need to swipe a credit card or debit card.
 No need to access your bank account for making e-payment.
 As e-wallet is prepaid account no chance of declining payment.
 Get extra cashbacks for every amount spent using wallet.
 Get reward and discount offers on every purchase using wallet.
 The money will be refunded in case of failure in the transaction.
 Wallet to wallet money transfer benefit
Drawbacks of using Digital Wallet

 You cannot redeem your money back from the wallet you need to make purchase to
use this money.
 If you lose your mobile your wallet is lost.
 You can use wallet till your mobile battery lasts.
 It may be possible that you will end up spending more money using wallet.
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Top 15 Best Digital Wallets in India
#1 PayTm
PayTm is one of the most popular and best digital wallets in India. It is very easy to
download and use PayTm wallet. It is semi closed wallet. Best part of PayTm is it offers
multiple cashback and discount. Paytm is user friendly application. You can do e-commerce
transactions using Paytm for mobile recharge, bill payment, transferring money and much
more.
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#2 Mobikwik
Mobikwik is one of the oldest mobile wallet in India. It is a semi closed wallet which allows
user to load money using debit card, credit cards and mobile banking. This wallet is famous
for doing utility payment and mobile recharge. You can also use this wallet for transferring
money from one wallet to other.
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#3 PhonePe
PhonePe is mobile wallet app by Flipkart. PhonePe is semi closed wallet which support
multiple merchant payment. It is UPI based app. It also allows you to make payment using
QR code. It offers multiple mode of payment including debit card, credit card and wallet.
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#4 Airtel Money
Airtel Money is next in the list of best digital wallet. Airtel money provide best online
experience. You can earn cashback & discount on movies, bus, flight ticket and hotel
bookings. Airtel money allows you to send money to bank, friends or relatives.
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#5 Jio Money
Jio Money is latest edition in mobile wallets. Jio Money is semi closed app. Jio Money allows
transaction to some fixed set of merchants. You can get multiple cashback benefit on using
this wallet.
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#6 Payzapp
Payzapp is mobile wallet by HDFC Bank. It is complete wallet. It allows you to do online
shopping, recharge, buy movie tickets, grocery purchase and many more things. You need to
link your debit card or credit card for using Payzapp.
#7 Amazon Pay
Amazon Pay is semi closed wallet. Amazon Pay is primarily designed for Amazon online
purchase. However, now amazon pay allows transaction to selected merchants. Amazon pay
offers multiple benefits such as cashback and discount. It is best wallet for Amazon Online
Shopping lovers.
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#8 Freecharge
Freecharge is one of the best mobile wallet in India. Freecharge allows you to make prepaid,
post-paid, DTH, bill payment and many more things in one click. You can also donate money
using frecharge. You can use credit card, debit card or net banking for loading money on this
wallet.
#9 Oxigen
Oxigen is one of the most preferred wallet for online shopping. Oxigen is one of the most
secured mobile wallet. Oxigen allows transfer of money from wallet to bank account. Oxigen
has tie up with all popular online merchants like ebay, shopclues, jabong etc.
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#10 SBI Buddy
SBI Buddy is open digital wallet. You can add money to SBI buddy by debit card, net
banking or IMPS. You can send money, ask money, recharge mobile, pay bill, book movie
ticket and perform many other things. If you are SBI customer you should use this wallet.
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#11 PayU Money
PayU Money offers mobile wallet services in India. This mobile wallet offers rewards point
on every transaction. The best thing about this wallet, it gives PayUMoney Buyer Protection.
#12 Vodafone M-Pesa

Vodafone M-Pesa is next in the list of best digital wallet. It is open wallet. This wallet
permits redemption or cash withdrawal by its users. It is easy to use and user friendly mobile
wallet.
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#13 ICICI Pockets
ICICI Pocket is mobile wallet by ICICI bank. Using Pockets, one can send/receive money,
make online recharge, book tickets, shop and pay online, and share gifts with friends. It offers
fast, convenient and secure mobile transaction.
#14 LIME
LIME is mobile wallet by Axis Bank. LIME is wallet that provides banking and online
shopping facility on the move. You can pay your shopping bills, mobile recharge, buy movie
tickets and many more things using LIME.
#15 Chiller
Chillar is one of the best mobile wallet. Chiller is launched by HDFC Bank. Chiller has tie up
with multiple banks. You can manage your all account at one place using this wallet. You can
do mobile recharge, send/receive money, book flight, hotels at discounted rate using Chiller.
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5 trends driving growth of digital wallets
Merchant holdouts are finally warming to the likes of Apple Pay, years after the mobile
wallet's launch. Competitive offerings have also flourished from mobile operating systems
and phone providers like Google and Samsung, alternative payments providers such as
China’s Alipay and even the enablement of P2P wallet providers such as Venmo to be used in
apps such as Uber.
The major change Apple Pay brought was widespread industry support from financial
institutions to allow their cards to be used in a third-party app, as well as using Apple's clout
to get merchants to install NFC readers that would accept mobile wallets in-stores. As mobile
wallet usage has grown, along with increased smartphone penetration levels, more use cases
are coming to market, such as bill pay and transit fare.
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CHAPTER 2
REVIEW OF LITERATURE AND RESEARCH
DESIGN
Page 35
LITERATURE REVIEW
Several theories have been developed to understand the intention of the consumer to use an
IS technology. TAM model have been studied extensively in several literature (Davis, 1989)
and it is in fact the theory of information services that model how users adopt and use a
particular technology (Dauda , et al., 2015). Number of researchers have extended the TAM
model and applied it to many different technologies including e-learning (Cheung and Vogel,
2013; Al-Maroof and Al-Emran, 2018), m-commerce (Barry, et al., 2018) and short message
service (Muk, et al., 2015). According to Vijayasarathy (2004), TAM variables are best suited
for a decision regarding to accept new technology. To study the acceptance and usage
intention of new technology, TAM is considered as well-recognized extensions in academic
research (Aydin , et al., 2016). However, the original TAM variables may not sufficiently
capture core beliefs that affect the attitude of consumers towards eshopping. In order to
strengthen the model it is further advised to include few additional variables to examine the
appropriateness of the TAM (Jaradat, 2013). Privacy and security is one of the extended
variable that was found to be positive on behavioral intention to use new technology (Barry,
et al., 2018). Based on the above statements, this study includes privacy and security as one
of the extended variables (Barry, et al., 2018) to examine the behavioral intention to use e-
wallet. Other two variables are perceived usefulness and perceived ease of use.
use E-wallet is as an application that allows an individual to make any e-commerce
transactions by storing their credit card information. Payment through e-wallet is considered
as one of the most prominent transaction method at present because an electronic transaction
using a digital wallet has the advantage of ease, flexibility and protection (Uddin , et al.,
2014). Mobile wallet is also recognized for its innovative benefits such as customization and
instant communication (Osakwe, et al., 2016). As the number of e-payment systems is
increasing e-wallet has already gain fame by providing its vast number of services in riding
sector, food delivery and bill payments (Rosnidah et al., 2019). It is not only advantageous
for buyers; traders are accepting e-wallet as a payment method because of its fastest
transaction process, efficient cash management and less cost of labor (Hayashi , et al., 2014).
These types of transactions are commonly being done in physical stores where customers
scan the (QR) code by using their mobile device to confirm the payment (Lu, 2018). In
physical stores, NFC-supported devices (Near Field Communications) are being placed near
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to the payment terminal to make the transaction easier (Taylor , 2016). Based on the above
literature, it can be described that the use of e-wallet among young adults is mainly because
of its compatibility, flexibility and user friendly transactions that is done using smart devices.
Intention can be defined as a course of action that an individual aims to achieve (Zhao, et al.,
2010). Behavioral intention is a person’s subjective probability that is intended to be attained
within a time period (Ajzen , 1988). It refers to the way a person will act in the future
(Fishbein, et al., 1975). Ewallet is a new form of payment systems that is widely accepted. In
future it is expected to have a great expansion of e-wallet in Malaysia (Nizam et al., 2018).
Many scholars found positive and significant relationship between behavioral intention (BI)
and new technology use (Barry and Jan , 2018; Faqih and Jaradat , 2015; Jaradat, 2013).
According to Mun and Hwang (2003), behavioral intention (BI) has positively and
significantly affects actual use (AU). (Venkatesh et al., 2003) Postulates an extended
Technology Acceptance Model with four variables; findings from the model reveals that
behavioral intention to use has a significant and positive influence on usage behavior. Based
on the statements above, the following hypothesis is formed:
H1: Behavioral intention to use e-wallet will have positive influence on e-wallet use.
Perceived usefulness refers to a degree to which an individual believes that using a particular
information system will lengthen their productivity (Davis, 1989). In TAM framework,
perceived usefulness is hypothesized to predict the direct relationship with behavioral
intention to use the technology (Park et al., 2014). Perceived usefulness also prescribed as a
degree to which a person believes using a particular system will enhance his or her job
performance. Perceived usefulness is a strongest factor of TAM that has a significant
influence on behavioral intention (Davis, Bagozzi & Warshaw, 1989). Using TAM model Al-
Maroof and Al-Emran (2018) found the significant relationship between perceived usefulness
and behavioral intention to use particular technology.
H2: perceived usefulness of e-wallet will have positive influence on behavioral intention to
use ewallet.
The term perceived ease of use signifies to “the extent to which using a particular system will
be free from effort” (Davis, 1989). Behavioral intention to use technology is positively and
significantly influenced by perceived ease of use (Jackson, Chow & Leitch, 1997). A study of
Venkatesh et al. (2002) reveals that perceived ease of use and behavioral intention to use are
Page 37
positively and significantly associated. Similarly, behavioral intention to use information
system is predicted by perceived ease of use (Eze, Ten & Poong , 2011). The study of Barry
and Jan (2018) found positive and significant effect of perceived ease of use on perceived
usefulness and perceived use of use on behavioral intention to use particular system. Four
longitudinal field of TAM extended by (Venkatesh, et al., 2000) reveals that perceived ease
of use is positively influence perceived usefulness and behavioral intention to use. Al-Maroof
and Al-Emran (2018) conducted a study on undergraduate students who perceive that using
web service technology is easy and user-friendly thus, it has positive influence on perceived
usefulness and behavioral intention. Mun and Hwang (2003) posited that there is a significant
relationship between perceived ease of use and behavioral intention to use information
system. Based on the above statements the following hypothesis id
H3a: perceived ease of use will have positive influence on perceived usefulness of e-wallet.
H3b: Perceived ease of use will have positive influence on behavioral intention to use e-
wallet.
Privacy is described as an individual's ability to personally monitor self-relevant information
(Cliquet et al., 2015). It is an important feature that everyone is aware off. Based on the study
of (Soodan , et al., 2020), one of the factors that affect the use of e-wallet is privacy and
security which is found to be more suggestive. Lack of security and privacy is one of the
issues that keep customers away from purchasing goods unless it is protected (Milberg, Smith
& Bruke, 2000). However, payment through e-wallet without security feature may lead an
unauthorized access of personal information and a lucrative opportunity for cybercriminals to
breach the data (Kaur et al., 2018). According to Marimuthu and Roseline (2020) the e-wallet
has gain its popularity due to have effortless transactions but still lack of knowledge and
awareness among people and fear to make transaction due to have security issues are the
major factors that should thought. Customer may not trust the information system provider
and they will deny making any transaction through e-payment unless the privacy and security
features are involved (Gitau , et al., 2014). Customer with no experience in the field of using
technology may have concern regarding security and privacy. Because the rapid increase of
technology and its security issues are a matter of serious concern among customer who uses
smart technology for transactions. Ahmad et al. (2010) posits that due to the rapid evolution
of technology, users have become much more concerned about privacy and security matters
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and this has contributed to their refusal to disclose their financial information (i.e. debit or
credit card details) over internet and e-commerce sites. Based on the abovementioned
literature, the following hypothesis is formed:
H4: Privacy and security will have positive influence on behavioral intention to use e-wallet.
Proposed Model for this Study
Perceived
Usefulness
of e-wallet
Behavioral
Perceived E-wallet
Intention to
ease of use use
use e-wallet
Privacy and
Security of
e-wallet
Bamasak carried out study in Saudi Arabia found that there is a bright future for m-payment.
Security of mobile payment transactions and the unauthorized use of mobile phones to make
a payment were found to be of great concerns to the mobile phone users. Security and privacy
were the major concerns for the consumers which affect the adoption of digital payment
solutions . Doan illustrated the adoption of mobile wallet among consumers in Finland as
only at the beginning stages of the Innovation-Decision Process.
Doing payments via mobile phones has been in use for many years and is now set to explode.
Also mobiles are increasingly being used by consumers for making payments. “Digital
Wallet “has become a part of consumers which are nothing but smart phones which can
function as leather wallets . Digital wallet offered many benefits while transferring money
such as convenience, security and affordability . Growth in technology has opened many
modes of payments through which consumers can do transactions which are more
convenient, accessible and acceptable , consumers have an inclination towards mobile
payment apps usage . Offering various benefits such as flexi payment digital wallet brands
are providing extra convenience to consumers . Major factor in adoption of digital wallet is
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convenience in buying products online without physically going from one location to another
location . There has been many studies conducted in past on mobile payment application to
find consumer interest and they found consumer has positive inclination for the same .
The factors such as perceived ease of use, expressiveness and trust affect adoption of digital
wallet as payment method. These factors are termed as facilitators and plays crucial role in
adoption of digital payment solution . Usage of digital wallet among youth in the state of
Punjab was found to be associated with societal influence and usefulness, controllability and
security, and need for performance enhancement. Premium pricing, complexity, a lack of
critical mass, and perceived risks are the barriers to adoption of digital payment systems.
A comprehensive model ‘Payment Mode Influencing Consumer Purchase Model’ was
proposed by Braga and Mazzon. This model considered factors such as temporal orientation
and separation, self-control and pain of payment constructs for digital wallet as a new
payment mode. Consumer perspective of mobile payments and mobile payment technologies
are two most important factors of mobile payments research . Mallat studied consumer
adoption of mobile payments in Finland. Study found that mobile payment is dynamic and its
adoption depends on lack of other payments methods and certain situational factors.
Digital wallet payments bring extra convenience to shoppers by offering flexible payment
additions and accelerating exchanges . Shin and Ziderman tested a comprehensive model of
consumer acceptance in the context of mobile payment. It used the unified theory of
acceptance and use of technology (UTAUT) model with constructs of security, trust, social
influence, and self-efficacy. The model confirmed the classical role of technology acceptance
factors (i.e., perceived to users’ attitude), the results also showed that users’ attitudes and
intentions are influenced by perceived security and trust. In the extended model, the
moderating effects of demographics on the relations among the variables were found to be
significant. Digital wallets offer the consumers the convenience of payments without swiping
their debit or credit cards. Instant Cash availability and renders seamless mobility is also a
unique feature of these digital apps, for instance the balance in your Paytm wallet can be very
easily transferred to your bank account as and when you want. Following are some other
advantages of making transactions through e wallets:
Saves time: digital wallets hold the amount in the electronic form so as to ease the payment
process where users can make online payments without entering any card details.
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Ease of use: As digital wallet is like one click pay without filling details about card viz card
number and passwords every time, It allows user to link digital wallet to accounts and pay
right away so that the consumers face no issues to enter the details every time a transaction
happen.
Security: There is a good amount of security when payments are made through e wallets
since the wallet does not pass the payment card details to the website. These virtual wallets
allow users to lock their wallet.
Convenient and information stored under one roof: As digital wallets helps to eliminate
need to carry the physical wallet they are highly convenient. Also a better management is
possible as there is synchronization of data from multiple platforms like bank accounts, credit
and debit cards, mobile accounts and billing portals.
Attractive discount: Cash back and discounts are being offered by most of the players along
with providing offline wallet balance top up known as 'Cash Pickup' service. This service is
being offered by Mobikwik that will facilitate cash to be directly added to MobiKwik wallet
where consumers of even smaller towns can be benefited.
As per Ministry of Finance Report (December 2016) on Digital payment, financial inclusion
is one of the foremost challenge facing India. 53 percent of India population had access to
formal financial services. In this context, digital payment can act as accelerator to financial
inclusion . Increasing availability of mobile phone, availability of data network infrastructure,
rollout of 3G and 4G networks and large merchant eco system are the critical enablers of
digital payment in India. It is further supported by the coordinated efforts of industry,
regulator and government. As per RBI’s report ‘Vision 2018’ four pronged strategy focusing
on regulation, robust infrastructure, effective supervisory mechanism and customer centricity
has been adopted to push adoption of digital payment in India .
The percentage of cash for transactions has seen a rapid decline in the past few years in India.
In 2010, the percentage of cash in all payments was 89% compared with 78% in 2015. This
rapid decline is a result of an increased adoption of non-cash instruments such as cards and
digital payments such as mobile wallets, electronic transfers, etc. Stored value instruments
like mobile wallets (Paytm, Mobikwik, Citrus, etc.) and prepaid and gift cards have made
payments though internet devices convenient and easy. India represents one of the largest
market opportunities for digital payments. With a population of 1.25 billion, India accounts
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for roughly 18% of the global population. The two key drivers of digital payments-mobile
phones and internet users are already well established in India. To date, India has about 1.0
billion mobile phone subscribers and 300 million internet users, ranking 2nd on both metrics
globally.
SINGAL, NIDH (2016) the article discusses the mobile wallet that loads money for payment
of bills which is hassle free and saves time. topics mentioned include the high success rate on
making payments with transactions in less than 10 seconds, the loading of money which does
not risk the credit card and bank account limit, and the offered services by electronic
commerce company including buying tickets, institutions fees payment, and money transfers.
KORZENIOWSKI, PAUL (2014) the article discusses the emergence of mobile wallets and
how it changed customer experience in payment process. Topics include the appeal of mobile
commerce functions in smartphones to consumers, the use of more personalized shopping

experiences, and the near field communication (NFC) system. Also mentioned is information
on the role of PayPal, the formation of payment infrastructure company Merchant Customer
Exchange (MCX), and the selection of an open or close loop design in transactions.
Holmes, Tamara E. (2012) the article offers advice on how to protect one's financial
information in digital wallets from getting into the wrong hands. It warns of spoofed invoices
which look legitimate and request payments through wire transfer or direct bank transfer. It
also advises against clicking on links in e-mails and to avoid providing personal information
such as Social Security number. It suggests setting a passcode on smartphones to avoid
becoming a victim of identity fraud.
Adams, John (2012) the article discusses the outlook for electronic wallet payment systems
from the perspective that the U.S. banking industry has to attract users in the mobile wallet
market and understand the mobile wallet market's ecosystem.
Bell, Stephanie (2011) the article presents information about a deal between Littlewoods
Europe company and Optimal Payments PLC for Optimal's Neteller electronic wallet and
discusses how the virtual payment method works for online shopping. Quittner, Jeremy
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(2012) the article focuses on a security problem in Google Inc.'s digital wallet, which is
linked to prepaid accounts where users store funds. The research firm Zvelo Inc. found the
PIN (personal identification number) code used for authentication and other user information
in Google's Wallet application can be extracted by a computer hacker
Methodology
Research Design
➢ The study is based on descriptive nature, primary source of data were used. The primary
source of data collected through self-constructed questionnaire. A sample of 100

respondents from different socio-economic characteristics was selected from bangalore city
was taken for the study. The study based on Simple random sampling method.
Limitation of the Study
➢ The study was confined only in Mumbai city only and the results of the study cannot be
generalized.
OBJECTIVES
 To identify the factors influencing use of digital wallets

 To analyse the demographic profile of the users of digital wallets
 To understand the consumers perception of digital wallets
 To analyse the satisfaction level of consumers on usage of digital wallet
RESEARCH METHODOLOGY
The current study is based on primary data collected from 100 respondents from the different
parts of Bangalore. A well-structured questionnaire was designed to collect the information
from the respondents the questionnaire was designed to study perception of customer towards
adoption of digital payment mode. Likert five point scales were used for obtaining responses.
The responses have been collected by means of face-to-face interviews by authors.
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Sampling Plan
Sampling unit: This call is for defining the target population to be surveyed. In this research
the sampling unit was the customers who have been using the digital wallet.
Sample size: In this survey the sample size decided was 100.
Sampling procedure: We adopted questionnaire for collection of primary data, as it is not

possible to take appointment from a large number of respondents. Purpose of this research
was told to respondents and questions were explained to them in case there was any need for
understanding any particular question. There had been no personal bias or distortions were
allowed while recording the responses.
Limitations of the Study
Although usage of E-Wallets is increasing by manifold but there is still a portion of crowd
who is untouched from the simplicity or complexity of E-Wallets. This study drew inference
on the basis of data collected from selected cities of central India only hence the results may
largely vary if the geographical boundaries of respondents changed. For a researcher who
wants to tap a larger area with varied demographics this study may not be sufficient. The
study revolves around the lives and preference of consumer in terms of their purpose of E-
wallet usage and selection of digital Wallet service providers. The sample comprises of 50
percent of young consumers falling in 21 years to 34 years of age group. This age group is
tech-savvy and is relieved, if not to the fullest, from orthodox thinking and is always ready to
welcome new ways of doing same things. While almost every care is taken during this study
in order to cover maximum possible demographics, there is a little homogeneity in the data as
to demographics which might have affected the data and inferences.
Page 44
CHAPTER 3
DATA ANALYSIS AND INTERPRETATION
Page 45
Factors influencing use of digital wallets
Results of the factor “Perceived Benefits”

Table 2
Factors Percentage
As compared to traditional modes of payment, 25
less efforts are required for payments done
through digital Wallets
Learning to use digital Wallets is easy 20
Digital Wallets minimizes the time spent on 26
payments
Using digital Wallets is beneficial 9
It is easy to conduct most financial 13
transactions using digital Wallets.
Digital Wallets keeps a record of spending 7
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Perceived Benefits
As compared to traditional modes of

payment, less efforts are required for
payments done through digital Wallets
Learning to use digital Wallets is easy
7%
13% 25%
Digital Wallets minimizes the time spent
on payments
9%
20%
26% Using digital Wallets is beneficial
It is easy to conduct most financial

transactions using digital Wallets.
Digital Wallets keeps a record of spending
Page 47
Results of the factor “Perceived Security”
Table 4
Factors Percentage
E-Wallets removes the burden of carrying cash 28
Coupons/reward points/discounts attract 13
people towards E-Wallets
E-Wallets maintains the privacy of personal 19
information against unauthorized access
E-Wallets provide multilevel securities like 40
one time password, transaction passwords, etc.
Perceived Security
E-Wallets removes the burden of

carrying cash
28% Coupons/reward points/discounts
attract people towards E-Wallets
40%
E-Wallets maintains the privacy of
personal information against
unauthorized access
E-Wallets provide multilevel
13% securities like one time password,
transaction passwords, etc.
19%
Table showing result of factor “Perceived Accessibility”
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Table 5
Factors Percentage
E-Wallet system provides proper receipts 38
after making payments
E-Wallet system can be accessible from 12
any location.
E-Wallets promotes paperless transactions 30
E-Wallets are acceptable for wide range of 20
the services.
Perceived Accessibility
20% E-Wallet system provides proper

receipts after making payments
38% E-Wallet system can be accessible
from any location.
E-Wallets promotes paperless
transactions
E-Wallets are acceptable for wide
30% range of the services.
12%
Profile of Respondents
The respondent profile as displayed in Table 2 replicate the population generally engaged in
use of digital payment. Most of the respondents are male (56%), employed ans most of the
Page 49
respondent are self-employed are either graduate. And the people who are familiar with
digital wallet are comes under the age group of 21-34 and with the family income of over
20k-40k and less than 20k under this maximum are having 1 to 2 year of experience in the
use of digital wallet.
Table 6: Respondents Demographic Profile.
Frequency Percentage
Variable Characteristics
Gender Male 56 56
Female 44 44
Age group Under 20 16 16
21-34 51 51
35-49 27 27
50-64 6 6
Education SSLC 21 21
PUC 23 23
UG 18 18
PG 23 23
DIPLOMA 15 15
Profession Student 26 26
Others 74 74
Family income Less than 20k 37 37.4
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20k to 40k 38 37.4
40k to 100000 17 17.2
100000 and above 8 8.1

Marital status Married 65 65
Single 27 27
Divorced 8 8
Family type Nuclear 56 56.1
Joint 43 43.9
Living region Urban 30 30.3
Semi urban 36 36.4
Rural 34 33.3
Hour spend on mobile Less than an hour 12 12.2
1 to 2 hours 50 50
More than 2 hours 37 37.8

Experience in wallet Less than a year 24 24.2
payment
1 to 2 year 44 44.4
More than 2 year 31 31.3
Analysis:
From the above TABLE 6 it determines the demographic profile of a consumer

and out of 100 respondent 56% respondent are male respondent and remaining 44% are
female respondents
Page 51
Interpretation:
From the above chart it shows that majority males are using digital wallet compare
to female
Analysis:
From the above TABLE 6 it determines the demographic profile of a consumer and out of
100 respondent’s majority people who responded are comes under the age group between 21-
34 compare to other age group
Page 52
Interpretation:
From the above chart it shows that majority people who are using digital wallet are
comes under the age group of 21-34
Analysis:
100 respondents’ most of them are graduated
Page 53
Interpretation:
well educated
Analysis:
100 98 are responded and in that majority were students
Page 54
Chart Title
26%
Student
Others
74%
Interpretation:
well students and who are in other proffession
Analysis:
From the above TABLE 6 it determines the demographic profile of a consumer out of 100
people 99 people were responded that most of them are having a family income between 20k-
40k and less than 20k
Page 55
Interpretation:
having the income between 20k-40k and below 20k
Analysis:
100 respondent’s 65% people are unmarried or single
Page 56
Interpretation:
From the above chart it shows that majority people who are using digital wallet there
marital status is single
Analysis:
100 respondent’s 98 people were responded to this question where majority are from nuclear
family
Page 57
Interpretation:
From the above chart it shows that majority people who are using digital wallet were
from nuclear family
Analysis:
100 respondent’s 99 were responded that they are from semi urban background
Page 58
Interpretation:
from semi urban background
Analysis:
100 respondent’s 98 people were responded to this question that majority they spent 1 to 2
hour on mobile
Page 59
Interpretation:
spends time on mobile for at least 1 to 2 hour per day
Analysis:
Page 60
100 respondent’s 99 were responded that they are having at least 1 to 2 years of experience in
the use of digital wallet
Interpretation:
having at least 1 to 2 years of experience over it.
Frequency Analysis
Page 61
In order to find out respondent’s perception and the overall satisfaction, frequency analysis
has been carried. The result is presented in the Tables 7 and 8. Highly important and
important responses are agreement to the statement which lead to positive perception and
slightly respondents and not important is negative agreement which indicate negative
perception. Strongly agree and agree responses are the supporting responses of the statement
related to a particular attribute of digital payment and indicates satisfaction of respondents
whereas disagree and strongly disagree responses are those which do not support the
statement related to particular attribute and indicate no satisfaction . Neutral responses neither
support nor oppose the attribute.
Consumers perception of digital wallets

Table 7:
Statement Highly Important Moderately Slightly Not
important Important Important important
Brand 21 57 7 6 8
loyalty
Continence 47 33 8 7 2
In usage
Secured 38 44 10 2 4
transaction
Time 49 35 7 5 1
saving
through
digital
payment
mode
Acceptance 38 40 13 5 2
wallet or
digital
Page 62
payment
mode
Price of 47 31 15 5 2
using
digital
payment
mode
Analysis:
From the above TABLE 7 it determines the consumer perception of digital wallet of a
consumer and out of 100 respondent ‘majority gave importance to brand loyalty (57) and (47)
people gave highly importance to continence in usage and also people gave equal importance
to secured transaction and 49 people responded that its time saving
Page 63
Interpretation:
having good perception towards the use of digital wallet
Satisfaction level of consumers on the usage of digital wallet
Customer satisfaction is the outcome felt by buyers who have expectation. Customers are
satisfied when their expectation are met and delighted when their expectations are
exceeded. Satisfied customers remain loyal longer, buy more, and are less sensitive and talk
favorable about the company. From this it is clear that the satisfied customer will be less
sensitive towards the fluctuating price and offensive marketing typically cost more than
Page 64
defensive marketing, because it requires much effort and cost to induce satisfied customers
to switch away from their current suppliers. We should also consider the fact that "the cost
of attracting a new customer may be five times the cost of keeping the current customer
happy." Therefore the companies are intending in developing stronger bones and loyalty
with their customers.
Table 8:
Attributes Strongly Agree Moderate Disagree Strongly

agree disagree
Digital 48 42 8 3 0
wallets are
capable of
providing
benefits to
individual
for purchase
of product.
Using the 37 37 15 6 5
digital wallet
improves the
quality of
my decision
making for
buying
products
Believe 26 52 15 6 2
digital
wallets are
useful in
buying
products
than the
Page 65
traditional
methods.
Think that 33 37 16 12 1
using online
wallets can
offer me a
wider range
of banking
services and
Payment
options
Trust the 35 46 5 10 4
service
providers of
digital
wallet
Analysis:
From the above TABLE 8 it determines the Satisfaction level of consumers on the usage
of digital wallet
Page 66

Interpretation:
Majority of respondent said it is important or highly important to associate with brand,

convenient in use, secured transactions, save time, acceptance of digital wallets at different
stores and pricing of transaction (transaction cost, service fee etc.)
Majority of the respondents agree that mobile wallet/digital payment provides benefits to
individual for purchase of products, improve the quality of decision, helpful in buying
products as compared to traditional methods, they offer a wide range of banking services and
payment options. They also agree that interaction with mobile wallet is helpful and that they
trust the service providers.
Page 67
Chapter 5
Summary of Findings, Conclusions
Summary of Findings:
 Over 90-100% of population use digital wallet because of “Perceived Benefits” as

follows
Page 68
a) As compared to traditional modes of payment, less efforts are required for
payments done through digital Wallets (25% responded that they are
influenced by this factor)
b) Over 20% of responded that using digital wallet is easy and user friendly
 Many people are using digital wallet as a Results of r “Perceived Security” as follows
a) over 28% people accepted that they are using E-Wallets to burden of carrying
cash
b) over 40% people accepted that they are using E-Wallets because it provide
multilevel securities like one-time password, transaction passwords, etc.
 many of the respondent are using digital as a factors of “Perceived Accessibility” as
follows
a) more than 30% people responded that E-Wallet system provides them a
proper receipts after making payments
b) Over 30% people responded that they are using E-Wallets to promotes
paperless transactions
 Over 90% population use digital wallet as a Results of “Perceived Security”
 Over 60% males are using digital wallet compare to female.
 Over 51% population using digital wallet are comes under the age group of 21-34
 Over 90% people who are using digital wallet are well educated
 More than 50% people who are using digital wallet were spends time on mobile for at
least 1 to 2 hour per day
 More than 80-90% who are using digital wallet are having good perception towards
the use of digital wallet
 Majority of respondent said it is important or highly important to associate with
brand, convenient in use, secured transactions, save time, acceptance of digital wallets
at different stores and pricing of transaction (transaction cost, service fee etc.)
 Majority of the respondents agree that mobile wallet/digital payment provides benefits
to individual for purchase of products, improve the quality of decision, helpful in
Page 69
buying products as compared to traditional methods, they offer a wide range of
banking services and payment options. They also agree that interaction with mobile
wallet is helpful and that they trust the service providers.
Conclusions
Present study has made an attempt to understand customer perception regarding digital
payment. It was found that demographic factor except education does not have much impact
Page 70
on the adoption of the digital payment. finding as there was no signification difference is
perceived by the respondents on the basis of gender age, profession and annual income. It
was only education level of the respondents where signification difference is perceived by the
respondents. It indicates that adoption of digital payment is influenced by the education level
of the customer. If a person has studied beyond matriculation and internet savvy, he or she
will be inclined to use the digital payment mode. It was also found that in the areas/region
where education level is high such as Bangalore NCR and other metropolitan area, the
possibility of acceptance of digital payment is much higher. The growth of users of
Smartphone and internet penetration in such area also facilitated the adoption of digital
payment.
Bibliography (System of Referencing)
Books
Payments Cards & Mobile Magazine
Page 71
Our flagship publication, Payments, Cards & Mobile magazine is published six times a year in
hard copy and online. We dig deep into stories and research key issues to bring our
subscribers content of unmatched quality, detail and depth.
We avoid the noise created by ‘burn and churn’ journalism; bringing you only the best hand-
picked headline stories, valuable research and practical analysis on the issues shaping the
future of payments.
Journals
 Bamasak O (2011) Exploring consumers acceptance of mobile payments-an

empirical Study. International Journal of Information Technology,
Communications and Convergence 1: 173-185.
 Dahlberg T, Mallat N, Oorni A (2003) Consumer Acceptance of Mobile Payment
Solutions-Ease of Use, Usefulness and Trust. The Second International
Conference on Mobile Business, Vienna, Austria, pp: 17-25.
 Wamuyu PK (2014) The role of contextual factors in the uptake and continuance
of Mobile money usage in Kenya. The Electronic Journal of Information Systems
in Developing Countries.
 Soman D (2001) Effects of payment mechanism on spending behavior: the role of
rehearsal and immediacy of payments. Journal of Consumer Research 27: 460-
474.
 Soman D (2003) The effect of payment transparency on consumption: quasi-
experiments from the field. Marketing Letters 14: 173-183.
 Soman D (2003) The effect of payment transparency on consumption: quasi-
experiments from the field. Marketing Letters 14: 173-183.
 Srivastava J, Raghubir P (2008) Monopoly Money: the effect of payment coupling
and form on spending behavior. Journal of Experiental Psycology Applied 14:
213-225.
Page 72
 Dewan SG, Chen LD (2005) Mobile payment adoption in the USA: a cross-
industry, cross-platform solution. Journal of Information Privacy and Security 1:
4-28.
 Liu S, Zhuo Y, Soman D, Zhao M (2012) The consumer implications of the use of
electronic and mobile payment systems. Rotman School of Management,
University of Toronto.
 Rathore HS (2016) Adoption of Digital Wallet by Consumers. BVIMSR’s Journal of
Management Research 8: 69.
 Padashetty S, Kishore KS (2013) An Empirical Study on Consumer Adoption of
Mobile Payments in Bangalore City-A Case Study. Researchers World 4: 83.
 Taheam K, Sharma R, Goswami S (2016) Drivers of Digital Wallet Usage:
Implications for Leveraging Digital Marketing. International Journal of Economic
Research 13: 175-186.
 Mallat N (2004) Theoretical Constructs of Mobile Payment Adoption. 27th
Information Systems Research Seminar, Scandinavia (IRIS), Falkenberg, Sweden,
pp: 34-46.
Newspapers and Magazines
Fortune India-January 2016 Magazine - Get your Digital Subscription

https://www.magzter.com/IN/Business-Media-Pvt-Ltd/Fortune.../144921
Websites
 Dezan Shira and Associates (2017) Growth of Digital Payments Systems in

India. http://www.india-briefing.com/news/growth-of-digital-payments-systems-in-
india-14797.html/.
 Watal R (2017) Digital payments surge 55% in 2016-
17. http://www.livemint.com/Industry/hF8D3D6bWBie6IoJzWtdZO/Digital-
payments-surge-55-in-FY17-Niti-Aayog.html
 Pratik B (2017) Demonetization effect: Digital payments India's new currency; debit
card transactions surge to over 1
Page 73
billion. http://economictimes.indiatimes.com/industry/banking/finance/banking/digi
tal-payments-indias-new-currency-debit-card-transactions-surge-to-over-1-
billion/articleshow/58863652.cms
 Doan N (2014) Consumer adoption in mobile wallet: a study of consumers in
Finland. http://theseus.fi/bitstream/handle/10024/86343/Ngoc_Doan.pdf?
sequence=1.
Page 74

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CHAPTER 1

A digital wallet is a software application with the following base functionality:

In terms of economics, mobile wallets tend to be an enabler of commerce rather than a

THE EVOLUTION OF DIGITAL WALLETS

THE WAY FORWARD FOR DIGITAL WALLET PROVIDERS

 Acceptance: Connect issuer-branded wallets (via application program interface, or

 Digital enablement: Provide tokenization services to bank and third-party digital

Rationale for the Study

Statement of Problem As continuation of demonetization process, the digital wallet

and loyalty, and attract new customers.

Digital Payment Modes in India

Online or mobile wallets:

Sl Wallet Name Key Features

3 Auto read of OTP.

A mobile wallet is a much-advanced versatile application that includes elements of mobile

Top 15 Best Digital Wallets in India

How to use Digital Wallets?

Type of digital wallets in India

Advantages of using Digital Wallet

Drawbacks of using Digital Wallet

#12 Vodafone M-Pesa

Proposed Model for this Study

commerce functions in smartphones to consumers, the use of more personalized shopping

source of data collected through self-constructed questionnaire. A sample of 100

Limitation of the Study

 To identify the factors influencing use of digital wallets

Sampling procedure: We adopted questionnaire for collection of primary data, as it is not

Limitations of the Study

DATA ANALYSIS AND INTERPRETATION

Results of the factor “Perceived Benefits”

As compared to traditional modes of

Learning to use digital Wallets is easy

It is easy to conduct most financial

Digital Wallets keeps a record of spending

E-Wallets removes the burden of

Table showing result of factor “Perceived Accessibility”

20% E-Wallet system provides proper

Table 6: Respondents Demographic Profile.

40k to 100000 17 17.2

100000 and above 8 8.1

Semi urban 36 36.4

More than 2 hours 37 37.8

More than 2 year 31 31.3

From the above TABLE 6 it determines the demographic profile of a consumer

Consumers perception of digital wallets

Satisfaction level of consumers on the usage of digital wallet

Attributes Strongly Agree Moderate Disagree Strongly

Majority of respondent said it is important or highly important to associate with brand,

 Over 90-100% of population use digital wallet because of “Perceived Benefits” as

 Over 90% population use digital wallet as a Results of “Perceived Security”

 Over 60% males are using digital wallet compare to female.

Bibliography (System of Referencing)

Payments Cards & Mobile Magazine

 Bamasak O (2011) Exploring consumers acceptance of mobile payments-an

Newspapers and Magazines

Fortune India-January 2016 Magazine - Get your Digital Subscription

 Dezan Shira and Associates (2017) Growth of Digital Payments Systems in

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