International Journal of Advanced Research in Engineering and Technology (IJARET)

Volume 11, Issue 5, May 2020, pp.1256-1263, Article ID: IJARET_11_05_137

Available online at https://iaeme.com/Home/issue/IJARET?Volume=11&Issue=5
ISSN Print: 0976-6480 and ISSN Online: 0976-6499
DOI: 10.34218/IJARET.11.5.2020.137

© IAEME Publication Scopus Indexed

A STUDY OF THE CONSUMER PERCEPTION

ON PAYMENT METHODS
Dr. K. Kalaichelvi
Assistant professor and Head, P.G. & Research Department of Commerce,
Government Arts and Science College for Women, Orathanadu, Tamil Nadu, India

ABSTRACT
A "cashless economy" is one in which all transactions take place electronically
through means such as direct debit, credit cards, debit cards, electronic clearing, and
payment systems like India's Immediate Payment Service (IMPS), National Electronic
Funds Transfer (NEFT), and Real Time Gross Settlement (RTGS). The study finds that
most respondents use electronic payments as a highly convenient option. E-payments
services aid clients by offering services that may be used anywhere and in safety. E-
payment services are crucial in the choice of a certain bank card. This study is being
presented in the hopes that it will alert borrowing authorities to the varied features of
e-banking services.
Key words: Cashless Economy, Money, Customer and Satisfaction
Cite this Article: K. Kalaichelvi, A Study of The Consumer Perception on Payment
Methods, International Journal of Advanced Research in Engineering and Technology
(IJARET), 11(5), 2020, pp. 1256-1263.
https://iaeme.com/Home/issue/IJARET?Volume=11&Issue=5

1. INTRODUCTION
A "cashless economy" is one in which all transactions take place electronically through means
such as direct debit, credit cards, debit cards, electronic clearing, and payment systems like
India's Immediate Payment Service (IMPS), National Electronic Funds Transfer (NEFT), and
Real Time Gross Settlement (RTGS).

2. STATEMENT OF PROBLEM
Customers of banks in the State of Tamil Nadu today care less about the security of their money
and more about maximising returns on their investments. Customers need services that are
effective, quick, and convenient. Customers desire a bank to provide services that will cater to
their individual needs and advance their professional objectives, such as businessmen who want
to travel without carrying cash for security concerns. They want to be able to transfer money
between accounts, view their balance online, and download transaction history to their personal
computer at home or at work. Customers want their preferred bank to give them special service
and undivided attention. All of these are only possible through electronic banking, which is

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 K. Kalaichelvi

based on the Central Bank of India's cashless policy. Therefore, the cashless policy and
consumer satisfaction are examined in this study. The Reserve Bank of India launched the
cashless policy.
The cashless policy has been the subject of numerous studies, but nothing has been done to
examine how customers feel about it. This study therefore aims to fill the research vacuum in
the area of consumer satisfaction with regard to cashless policy.

3. OBJECTIVE OF THE STUDY

• To understand the perception of cashless, ATM cards, e-banking and other online
payments methods in the study area;
• To study the effect of cashless policy on customers' satisfaction in Tiruchirappalli city;
• To offer suitable suggestions for improving the awareness and e-payments methods in
the study area.

4. METHODOLOGY
Respondents who worked in Trichy city areas participated in the survey. The chosen
respondents include residents of Trichy, including Chatram, Palakarai, the Central Bus Station,
Woraiyur, and Adavathur. The core data that form the foundation of this study. The cashless
society and consumer impression of payment systems for the fiscal year from April 2019 to
March 2020 are the subjects of this study.
Customers were contacted for the study's aim in order to gather data using a practical sample
strategy. Customers of SBI, Canara Bank, Indian Overseas Bank, Syndicate Bank, UTI Bank,
Tamil Nadu Mercantile Bank, and ICICI Bank were approached by the researcher. It was so
determined to conduct for 120 clients. The samples came from a variety of sources, including
government workers, businesspeople, professionals, and others. Chi-quire and five point scale
approaches are used to analyse the date percentage method.

5. RESULT AND DISCUSSION

5.1 Frequency of E-Payments
According to Table 1, 16.67% of respondents use e-cards once per week, 26.67% use them
regularly, and the remaining 13.33% use them on a monthly basis. Of those who responded,
43.33 % utilise them based on needs.

Table 1 Frequency of E-Payments

Frequency No. of Respondents Percentage
Based on needs 65 43.33
Frequently 40 26.67
Weekly 25 16.67
Monthly 20 13.33
Total 150 100

5.2 Type of Goods Purchased

According to Table 2, only 12.3% of respondents use online payments for expensive goods,
9.33% of respondents only buy expensive goods, 78.67% of respondents use online payments
for all types of goods, and 9.33% of respondents only buy expensive goods. The researchers
deduced from the data that respondents use online payments for all kinds of goods transactions.

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 A Study of The Consumer Perception on Payment Methods

Table 2 Type of Goods Purchased

Type of Goods No. of Respondents Percentage
Costly Goods 14 9.33
Rare Goods 18 12.00
All Goods 118 78.67
Total 150 100

5.3 Shopping Method in Online

A system for electronic payments in e-commerce makes it easier to take payments online. E-
commerce payment systems, also referred to as an example of Electronic Data Interchange
(EDI), are becoming more and more well-liked as a result of the extensive usage of online
banking and shopping. The online shopping process is depicted in the following table.

Table 3 Shopping Method in Online

Online Method No of Respondents Percentage
ATM/ Debit Card 31 20.67
E-banking (online) 18 12.00
Regular Bank Transfer 17 11.33
Credit Card 21 14.00
Mobile Banking (Swipp) 46 30.67
Net Banking 17 11.33
Total 150 100
The Table 3 shows that mobile banking (Swipp) has drawn customers because it is a simple
method for e-payment and has a market share of 30.67%, followed by ATM/Debit cards
(20.67%), credit cards (14%), e-banking (12%), and net banking (11.33%).

5.4 Choice of E-payments

The choice of e-payments is the cardholders' key specific viewpoint. The following table lists
the numerous e-payment selection criteria.

Table 4 Choice of E-payments

Statements Mean Rank
Score
I prefer to use cash when dealing with smaller amounts of money 3.65 VI
I prefer to store money in a bank account and use electronic payments 4.22 IV
when dealing with larger amount of money
My choice of payment method is influenced by my habits 4.38 III
My choice of payment method is influenced by the trust I have in the 2.94 VII
retailer.
My choice of payment method is influenced by my income level. 4.55 II
I generally trust the bank system in my country. 1.95 X
I believe that using cash stimulates the black economy sector (tax evasion, 3.66 V
corruption, etc.)
I think that using electronic payment methods makes/can make my life 4.75 I
easier.
I feel confident enough when doing electronic 2.84 VIII
payments.
I find it easier to control how much I spend when I use cash 2.41 IX

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 K. Kalaichelvi

It is evident from Table 4 above that "I think using electronic payment methods makes/can
make my life easier" holds the top spot with a mean score of 4.75, followed by "My choice of
payment method is influenced by my income level" at 4.55 and "My choice of payment method
is influenced by my habits" at 4.38. In fourth place with a score of 4.22 points is "I prefer to
keep money in a bank account and use electronic payments when dealing with larger amounts
of money," while in fifth place with a score of 3.66 points is "I believe that using cash stimulates
the black economy sector" (tax evasion, corruption, etc.). I normally trust the banking system
in my country, which received 1.95 points, is in bottom place. The researcher comes to the
conclusion that the crucial decision when choosing e-payments is "I think that using electronic
payment methods makes/can make my life easier.

5.5 Services Provided by E-banking

The respondents are asked to rank the elements that have been linked to e-payments services.
Using a 5-point scale, the most impacting elements are identified.

Table 5 Services Provided by E-banking

Statements Mean Rank
Score
Checking the balance of your bank account 4.42 I
Monitoring recent transactions 3.60 III
Executing transactions 4.32 II
Managing personal finance 3.18 IV
Table 5 makes it evident that each bank offers a different range of services. For the research
area, "checking the balance of your bank account" plays a critical function in the e-banking
service. This criteria received the top ranking for the e-payment service. The second-ranked
variable for this category, "Executing transactions," likewise has a big impact on e-payments.
‘Another element that has a significant impact on the services offered by e-payments is
monitoring recent transactions. It has earned the third position. There are multiple chores you
complete at once. Personal financial management is a key component of e-payments.

5.6 Technological Challenges

The technological difficulties with e-payments are a significant additional factor. The
technological difficulties are described in the following table.

Table 6 Technological Challenges

Statements Mean Rank
Score
Cannot pay with my bank card 4.12 III
Cannot pay with a bank card at all 3.23 V
Cannot pay because the system is down 2.78 VI
Cannot pay because of a system error 4.14 II
Cannot pay because I feel confused by the system 4.35 I
Cannot pay because I am not familiar how the system works 3.89 IV

From Table 6, it can be deduced that the largest technological barrier is "Cannot pay because
I feel puzzled by the system," which has earned the top spot with 4.35 points. With 4.14 points,
the second limiting reason is "Cannot pay due to a system issue." Can't use my bank card to

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 A Study of The Consumer Perception on Payment Methods

make a purchase is the third reason, scoring 4.12 points. The fourth (3.89), fifth (3.23), and
sixth (2.78) in the list are "Cannot pay because I don't know how the system works," "Cannot
pay with a bank card at all," and "Cannot pay because the system is down”.

5.7 Opinion about Cashless Economy

The opinions of the respondents towards the cashless economy are shown in the following table.

Table 7 Opinion about Cashless Economy

Opinion No. of Respondents Percentage
Highly Agreed 21 14.00
Agreed 59 39.33
Neutral 14 9.33
Disagreed 24 16.00
Highly Disagreed 32 21.33
Total 150 100
Table 7 shows that 39.33 percent of respondents, or the majority, support a cashless society.
In contrast to 9.33 percent of respondents who are neutral on the cashless economy, 14% of
respondents are strongly in favour of it. A little over 37.33% of customers dislike with the
cashless system.

5.8 Services and E-payments Preference

Services play a critical role in encouraging and persuading the consumer to purchase a specific
bank's e-payment card and bringing cards into that bank. The effect of services on choosing a
certain bank e-card is shown in Table 8.

Table 8 Services and E-payments Preference

Impact of Services No. of Respondent Percentage
Motivated 100 66.67
Not Motivated 50 33.33
Total 150 100.00
Out of the 150 sample respondents, 100 respondents (66.67%) were driven to choose a
particular bank e-card based on services, while only 50 respondents (33.33%) were not
compelled to purchase a particular banks e-card, according to the above table.

5.9 Educational Qualification of the Respondents and Impact of E-card Selection

Table 9 lists the respondents' educational backgrounds and indicates whether they were inspired
or not after viewing the e-payment services.

Table 9 Educational Qualification of the Respondents and Impact of E-card Selection

Educational Motivated Not Motivated Total
Qualification
Graduate 14 10 24
Post Graduate 27 11 38
Secondary 44 11 55
Middle 13 10 23
Illiterates 2 8 10
Total 100 50 150

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 K. Kalaichelvi

According to the above table, out of 100 respondents who were inspired to purchase a
specific bank e-card after seeing the e-payment services, 14 are undergraduates, 44 have
completed their secondary education, 27 have completed their postgraduate degrees, 13 have
completed their middle education, and two are illiterate. Out of the 50 respondents who were
not persuaded to buy a certain bank e-card after witnessing the e-payment services, 10 are
undergrads, 11 are graduates, 11 had only completed their secondary education, 10 had only
completed their intermediate education, and eight were illiterates.
The premise that "There exists no association between the respondents' educational level
and the influence of e-card selection" is put to the test using the chi-square test.
Value calculated at 4 df = 1.454. At a significance level of 5%, the table value for df 4 is
9.49. The null hypothesis is accepted since the calculated value, 1.454, is smaller than the table
value at the 5% level of significance. As a result, the researcher came to the conclusion that
there is no correlation between the respondents' education level and the influence of their choice
of e-card.

5.10 Occupation of the Respondents and Impact of E-card Selection

Table 10 lists the occupations of respondents who saw the e-payment services and were
motivated to use them and respondents who saw the services but were unmotivated.

Table 10 Occupation of the Respondents and Impact of E-card Selection

Occupation Motivated Not Motivated Total
Businessman 42 15 57
Salaried People 35 10 45
Agriculturist 14 12 26
House wife 9 13 22
Total 100 50 150
Out of the 100 respondents who were inspired to purchase certain bank e-cards after viewing
the services, 42 are businessmen, 35 are salaried individuals, 14 are farmers, and 9 are stay-at-
home mothers. Out of the 50 respondents who had seen the services but were unmotivated, 15
are businessmen, 10 are salaried workers, 12 are farmers, and the remaining 13 are housewives.
The e-card selection process has no link with the respondents' occupations, according to the
chi-square test, which is used to test this claim”.
Value calculated at 4 df = 12.259. At a significance level of 5%, the table value for df 4 is
9.49. The null hypothesis is rejected because the calculated value, 12.259, is higher than the
table value at a 5% level of significance. The researcher came to the conclusion that there is a
substantial relationship between the respondents' occupation and their incentive to choose an e-
card.

5.11 Income of the Respondents and Impact of E-card Selection

The respondents' income distribution and the effect of services on their choice for e-cards are
shown in Table 11.

Table 11 Income of the Respondents and Impact of E-card Selection

Income (Rs.) Motivated Not Motivated Total
Below 25,000 18 11 29
25,000 – 50,000 16 12 28
50,000 – 75,000 36 9 45

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 A Study of The Consumer Perception on Payment Methods

75,000 – 1,00,000 22 10 32
1,00,000 & above 8 8 16
Total 100 50 150
Table 11 shows that, of the 100 respondents who were inspired to buy a certain bank e-card
after seeing the e-payment service, 36 respondents had an income between Rs. 50,000 and Rs.
5,000, while 22 respondents had an income between Rs. 75,000 and Rs. 100,000. Out of 50
respondents, 12 belonged to the income range of Rs. 25,000–Rs. 50,000, while 11 belonged to
the income group of and below Rs. 25,000. These 50 respondents had viewed the services but
were unmotivated to buy a particular bank e-card.
The premise that "There exists no association between the respondents' income level and
the influence of e-card selection" is put to the test using the chi-square test.
7.089 is the calculated value at 4 df. At a significance level of 5%, the table value for df 4
is 9.49. The null hypothesis is accepted since the estimated value, at a 5% level of significance,
is smaller than the value in the table. This demonstrates that motivation for e-payment services
is independent of income level.

6. SUGGESTIONS
• According to the sex classification, male customers use e-payments more frequently
than female customers. Therefore, bankers should take action to make sure that women
can also use e-banking services.
• Banks should take action to encourage client deposits. This will result in a continuous
flow of income.
• All classes of people should be able to simply understand the instructions if e-banking
is to be used.
• It is desirable that all of India's e-banking be interconnected.
• All bank ATMs should have the ability to transfer money and accept deposits, and e-
corners should be installed in all significant locations.
• For the sake of the consumers, the bank employee's services should be provided
promptly.
• The ATM can be equipped with draught features.
• In order to enhance e-banking and customer usage, the bank must take the required
efforts to lessen the issues that its clients confront.

7. CONCLUSION
The study finds that most respondents use electronic payments as a highly convenient option.
E-payments services aid clients by offering services that may be used anywhere and in safety.
E-payment services are crucial in the choice of a certain bank card. This study is being presented
in the hopes that it will alert borrowing authorities to the varied features of e-banking services.

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 K. Kalaichelvi

REFERENCES
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[2] Jashim Khan and Margaret Craig-Lees, (2008). “‘Cashless’ transactions: their effect on
purchase behaviour Auckland University of Technology, pp.1-8.

[3] Woodford, M. (2003). Interest and Prices: Foundations of a Theory of Monetary Policy
Princeton University Press.

[4] Garrett E. Henry, Statistics in Psychology and Education, Vakils Feffer and Simons Private
Limited, Bombay, 1969, pp. 328 – 331.

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