A

Project Report

On

“INFLUENCE OF DIGITAL PAYMENT

SYSTEM
IN BANKING SECTOR IN INDIA”

Submitted in the partial fulfilment of the degree

of

Bachelor of Commerce (H)

Faculty Guide: Submitted By:

Dr. Priya Raman Drimpy

Assistant Professor Roll No: AJU/200666

Arka Jain University 2020-23

1
 ACKNOWLEDGEMENT

It gives me a great sense of pleasure to present the report of the project work. This project report
has given me good knowledge about the topic and related terms.

I express my deepest thanks to Dr. Priya Raman for giving necessary advice and guidance while
working on the project.

With great pleasure, I would like to express my sincere gratitude to Prof. Ankita Singh for her
immense support and guidance.

I am also thankful to my family for their kind cooperation which made my task easy.

2
 School of Commerce and Management

Certificate by the Faculty Mentor

This is to certify that Ms. Drimpy, Roll. No. AJU/200666, a student of B.COM (H). (2020-23),
has undertaken the ‘Summer Internship Project titled “A Study on Influence of Digital payment
system in banking sector in India”. The Project report is hereby submitted by the student for
the partial fulfilment of requirement for the award of Bachelor of Commerce (H), under my
supervision. To the best of my knowledge, this project is the record of authentic work carried
out during the academic year (2022-23) and has not been submitted anywhere else for the award
of any Certificate/Degree/Diploma, etc.

Guided By: Verified By:

Dr. Priya Raman Dr.. Priya Raman,

Programme
Assistant Professor
Coordinator
B. Com (H)

3
 School of Commerce and Management

Declaration by the Student

I, Drimpy, hereby declare that the Project titled, “A Study on Influence of Digital payment
system in banking sector in India,” has been carried out by me during my ‘Summer Internship
Programme’ and is hereby submitted for the partial fulfilment of the requirement for the award
of degree of Bachelor of Commerce (H). To the best of my knowledge, the project undertaken,
has been carried out by me, and is my own work. The contents of this report are original, and
this report has been submitted to the said organization and to the ‘ARKA JAIN University’,
Jamshedpur and it has not been submitted elsewhere, for the award of any
Certificate/Diploma/Degree etc.

Signature of the Student with Date

Drimpy

Roll No: AJU/200666

B.COM (H). Batch 2020-23

4
 TABLE OF CONTENTS

Serial no. Chapter Name Page no.

Abstract 6
1 Introduction 7
1.1 Review of 8
Literature
1.2 Research Gap 9
1.3 Objectives 9
2 Material & 10
Methods
2.1 Research Design 10
2.2 Research 10
Instruments
2.3 Data Analysis 11-18
3 Findings & 19
Suggestion
4 Conclusion 20
5 References 21
6 Annexure 22

5
 INFLUNCE OF DIGITAL PAYMENT
SYSTEM IN BANKING SECTOR IN INDIA
Dr. Priya Raman, Assistant Professor

Drimpy, B.com(H), Arka Jain University

ABSTRACT

The Payment traditionally done was through cash but in current era digital payment has
increased a lot. Digital payment is the payment through online mode using quick response code
or any other means. As digital payment clicks. Online sector came to its peak at covid time. At
this time banking sector had a real growth in digital payment sector. Banks introduced e-
banking segment in their application.

Digital banking means using technology in banking sector. Now a days we can apply for loans
and advances through online mode or to pay for interest and taxes online through bank. Now a
days issuing shares is also done through online mode and can be easily liquidated in few clicks.
As it is an era of digital revolution is need of new earth banking sector made a lot of progress
in digital payment system. Now we can pay online and do shopping 24*7 from anywhere
through digital payment system. Banking had made a lot of progress in digital platform such
as ATM, debit, and credit card, etc. we can pay to anyone or do recharge for mobile in few
banking sectors is evolving with time. This research paper discusses about various factor which
directly or indirectly influences digital payment sector in banking industries.

Keywords:

Banking sector, online banking, digital payment system, customer’s behaviour, influencing
factors

6
 1. Introduction

Digitization in the banking industry essentially means making banking smooth and
seamless for customers. Today Information technology has become an important tool for
an efficient banking system, and Indian banks have put in place a fairly strong infrastructure
to leverage its benefits. The 'Digital India' campaign has the potential to transform the
Indian banking industry. Apart from demonetization and new payment banks, many other
policies and regulations are expected to be in place in the upcoming years which can bring
a paradigm shift in the Indian banking sector. The Digital India vision aims to transform
India into a digital economy. In the recent years, there might be decline in the usage of
branches and tremendous increase in digital banking consumption. Most of the private
banks and public sector banks are focusing on new technology-based services to its
customers like digital branches, mobile banking, mobile banking apps and e-wallets. The
biggest advantage of digitalization in banking is ability of banks to provide new
propositions and customer specific business models by analysing the banking pattern which
explores the customer value to the maximum. Banking industry in India has also achieved
a new height with the changing times. Customer services and customer satisfaction are
prime responsibilities of banks now days. Information technology has given rise to new
innovations in the product designing and their delivery in the banking and finance
industries. It is becoming essential for banks to integrate Internet, branch network, and
mobile banking channels so as they can attract and retain customers.

In 2016, Unified Payments Interface is an instant real-time payment system facilitating

inter-bank transactions. Developed by the National Payments Corporation of India (NPCI),
it is a system that powers multiple bank accounts into a single mobile application (of any
participating bank), merging several banking features, seamless fund routing, and merchant
payments into one hood. Regulated under the guidelines of the Reserve Bank of India, the
Unified Payments Interface was introduced to encourage “cashless transactions” in India.
There are multiple apps that offer this facility. Additionally, most bank applications are
now offering UPI-enabled transactions on their apps.

7
 1.1 Review of Literature
V Sharmila, M Manisha, G Shubhasini and B Sudha (2022) study aims to show how
these technologies affect conventional banking procedures and how they may be used
in the future. It would be fascinating to compile all the digital advancements that
have a comparable influence on bank procedures.

Singha Chaveesuk, Bilal Khalid, Wornchanok Chaiyasoonthorn (2022) studied

investigated the continuous intention to use digital payment solutions in online
transactions to mitigate the spread of the COVID-19 virus

Dr Rajasulochana, Mohammed Khizerulla(2022) studied customer satisfaction one

banking service. This study is carried for a period of 12 months from April 2021 to
March 2022. Study finds that there are significant relationships between Age,
Qualifications, Income, and usage of e-banking and overall satisfaction of the e-
banking

Supreet Sandhu, Sangeeta Arora (2022) study that investigated customers' usage of
electronic banking services in a multi‐channel context. With the inclusion of
technology, banks should not ignore the importance of employees as manual and
electronic banking are found complementary to each other.

Raafat Awad Mosa (2022) study provide an insight that reveals the importance of the
influence and correlation relationship between E-CRM and the customer experience
in the field of E-banking service.

Shilpa Chauhan, Atif Akhtar, Ashish Gupta (2022) studied aims to demonstrate
digital banking influence on customer evaluation of service experience and develop a
framework identifying the most significant variables of digital banking that influence
the financial performance of banks

Vikas Chauhan, Ram Balak Yadav, Vipin Chaudhary (2022) study aims to identify
the intention of consumer to adopt various e-banking services. The study adopted the
UTAUT2 model (unified theory of acceptance and use of technology) and extended it
with construct such as consumer innovativeness, perceived risk, and security
information availability.

Dr Harayalla,(2021), this study assesses the impact of banking sector on per capita
gross domestic product (GDP) in India using a time series data during 1981-2019. It

8
 used per capita GDP as dependent variable, and broad money as a% of GDP, broad
money to total reserves ratio, domestic credit to private sector as a% of GDP, final
consumption expenditure as a% of GDP, annual consumer prices inflation, literacy
rate and real interest rate as independent variables

1.2 Research Gap

After reviewing the above papers, I concluded that influence on digital payments in the banking
sector have not been a noticeable topic. Many have studied the evolution of the banking sector,
digitization in the banking sector, and the evolution of neo-bank. This report basically discusses
about the effect of e-payments on banking sector and satisfaction level of senior citizens
towards digital payments is not been don't so far, so this research basically focus on this.

1.3 Objectives
The major objective of this study is to study the following:

1. influence of digital payment systems in banking sector

2. growth of digital payments in banking sector
3. Satisfaction level of senior citizen towards digital payment system

9
 2: Materials and methods
2.1 RESEARCH DESIGN

I'm using a primary inductive methodology approach in this design. The information gathered
from the customers is through a questionnaire. I have applied direct marketing ways which
included creation of the events via direct selling through family members, friend's relative
and family members and through neighbours.

2.2 RESEARCH INSTRUMENTS

Questionnaire

It is a collection of a set of questions. The information gathered from the customers was
through a questionnaire. A closed-ended questionnaire is prepared which generally consists
of a number of sections. The sections depend on the study content and its objects. The
questions contained in this section is for descriptive analysis. The questions for descriptive
analysis collect information on the demographic profile (age, gender, educational
qualification among others) and general background of the survey participators.

Measurement Scales

Measurement scales while framing a questionnaire play an important part to understand the
characteristics of the variables.

Scales used

• A nominal scale is used which classifies variables that don't involve any numerical value.
The variables taken into consideration are gender, place of residence and area of work.

• A ratio scale is used which is a numerical scale. It's an interval scale with the added
property that the variable can take a value of zero. The variables that are considered is age
and duration of employment

10
 2.3 Data Analysis

1.Gender

Gender No. of respondents Total

Male 30 50%

female 30 50%

Total 60 100%

Interpretation

From the above table it can be observed that 50% males and 50% female respondents were
taken.

2. Since when you are using online e payments and e banking

11
No. of years No. of respondents percentage

Since 3 years 1 1.7%

Since 2 years 14 23.3%

Since 1 year 24 40%

Not using 21 35%

12
Interpretation

From the above data it can be observed that earlier there was lack of awareness among senior
citizens regarding online payment but it is clearly visible in chart that since covid the ratio of
online payment among senior citizens have increased. They have started adapting the digital
method but still 40% people face issues in online payment as they are not much aware of the
process.

3.What do you use for basic transaction

Means of transaction No. of respondents percentage

Cash 25 41.7%

Bank cards 16 26.7%

upi 19 31.7%

13
Interpretation

As seen in the above chart more than 58.4% people devote in doing transactions with cash
and bank cards and remaining 41.7% people are comfortable with doing UPI transactions.

4.What is the better way of banking

Modes of Banking No. of respondents percentage

Traditional 29 48.3%

Digital 31 51.7%

14
Interpretation

According to the survey 51.7% people are still comfortable in traditional banking and other
48.3 are comfortable with digital payment.

5. How do you want your bank to serve in the future?

response No. of respondents percentage

Fully online 10 16.7%

Fully offline 12 20%

Blended offline and online 38 63.3%

15
Interpretation

From the above chart it can be observed that 63.3% people want Blended (Both online and
offline) so that the senior citizens cannot face problems while doing their transactions. And
20% people want the banking system to be fully offline because they are facing many
problems with these new technologies and there are very less people (16.3%) those who want
the bank to be fully online

6.How would you rate the quality of the E-banking System

Rating No. of respondents percentage

16
 1 12 20%

2 20 33.3%

3 15 25%

4 11 18.3%

5 2 3.3%

Interpretation
17
As the above graph shows 3.3% of people rated e banking system as 5 whereas simultaneously
18.3%, 25 %, 33.3% & 20% are rated by 1

18
 Finding and suggestions

Age group: the respondents were senior citizens mostly people of 50-60 yrs. This
research was mainly on the satisfaction level of this digital payments system in the age
group of 50-60 years old.
After researching people from age group 50-60. I found that many of them have started
using e banking and online payment, in has been analysed in past 2 years majority had
started e banking due to covid 19 pandemic. Hence, we saw the rise of e banking services
in the given conditions.
I found that even now most people prefer traditional banking over digital banking.
Because they found many difficulties, they don't understand the system.
After using e banking system many people are comfortable with the system even though
they are comfortable they had given e banking the rating of 2 or 3 minimum.

Suggestions
We can provide them with the current technology and provide them the information about
e banking services from the bank
Banks can organise monthly drive for the senior citizens and upgrade their knowledge
regarding UPI and e payments systems.

Conclusion

India continues to be the world's fastest growing major economy, and with the highest
demographic dividend at its side, it has the potential to be a bright spot for the world in
19
 today's business environment. Major business players are flocking to the digital payment
industry. Digital India, the government's flagship initiative, aspires to convert India into a
digitally enabled society and knowledge economy. One of Digital India's professed roles is
Contactless, Paperless, Cashless. Various modes of digital payments are available as part
of the effort to promote cashless transactions and transform India into a less-cash society.
Banking cards, USSD, AADHAR enabled payments service (AePS), Unified Payment
Interface (UPI), e-wallets, m-wallets, Prepaid Payment Instruments (PPIs), Point of Sale
(Pos), Internet banking, mobile banking, and micro-ATMs are some of the options. NPCI
is a pioneering institution that has transformed India's digital payment landscape with key
payment solutions such as UPI, RuPay cards, e-wallets, FasTag toll payments, AePS, and
so on. In cases like COVID-19 and other epidemics, the e-wallet is a handy platform for
doing payment transactions while maintaining social distance. Digital payment solutions
in the retail payment segment were a huge success in the digital payment ecosystem. UPI
alone accounted for 59 percent of retail payment transactions. The industry is steadily
growing because of various supportive factors such as the RBI's vision of a cashless society,
the shift to contactless payments, the increased use of smartphones with lower internet
costs, and key legislations in support of digital payment systems with enhanced security
against internet frauds. Payment service providers such as PhonePe, Google Pay, Paytm,
Amazon Pay, and others are seeing a surge in digital payment transactions. Banking
customers, bankers, and payment service providers play a larger role in the popularisation
of digital payment instruments. In the future, behaviour models can be used to study their
attitudes toward digital payment adoption and usage. The government of India and online
transactions facility provider such as Banks, Non-Banking Financial Corporation (NBFC),
Mobile Wallets, Payment Banks etc should continually enhance their financial services
with attractive offers, discounts, digital literacy, and awareness. It is observed that there are
factors which are also responsible for digital payment system [8, 28] like lack of trust,
internet connectivity, awareness, and training etc.

References
Sharmila, V., Manisha, G., Subhashini, M., & Sudha, B. (2022, January). Analysis the impact
of digital trends and IoT procedural scheme on traditional banking system. In 2022
20
International Conference on Advances in Computing, Communication and Applied
Informatics (ACCAI) (pp. 1-6). IEEE.

Chaveesuk, S., Khalid, B., & Chaiyasoonthorn, W. (2022). Continuance intention to use
digital payments in mitigating the spread of COVID-19 virus. International Journal of Data
and Network Science, 6(2), 527-536.

Rajasulochana, D., & Khizerulla, M. (2022). Service Quality In SBI: An Assessment of

Customer Satisfaction On E-Banking Services. Journal of Positive School Psychology, 4585-
4590.

Sandhu, S., & Arora, S. (2022). Customers' usage behaviour of e‐banking services: Interplay
of electronic banking and traditional banking. International Journal of Finance & Economics,
27(2), 2169-2181.

Mosa, R. A. (2022). The Influence of E-Customer Relationship Management on Customer

Experience in E-Banking Service. Soc. Sci, 12, 193-215.

Chauhan, S., Akhtar, A., & Gupta, A. (2022). Customer experience in digital banking: A
review and future research directions. International Journal of Quality and Service Sciences.

Chauhan, V., Yadav, R., & Choudhary, V. (2022). Adoption of electronic banking services in
India: an extension of UTAUT2 model. Journal of Financial Services Marketing, 27(1), 27-
40.

Haralayya, D., & Aithal, P. S. (2021). Implications of banking sector on economic

development in India.

21
 ANNEXURE

The data of the Questionnaire is posted in Data Analysis and Interpretation.

Questionnaire
1. Gender
Male _____
Female ______
2. Since when you are using online payment and e banking
Since 3 years ____
Since 2 years ____
Since 1 years ____
Not using
3. What do you use for basic transaction
cash____
Bank cards ____
UP____
4. What is the better way of banking
Traditional____
Digital ____
5. How do you want your bank to serve in future
Fully offline_____
Fully online _____
Blended (Both online and offline) _____
6. How would you rate the quality of e banking?
1_____
2_____
3_____
4_____
5______

22