Research Paper

A 09 AMOGH GOSAVI

A 04 GANESH BOSE

MSC FINANACE

PROFESSOR NAME: - DR. HIREN GOHIL

SUBJECT NAME: - Field Project

 TOPIC: - IMPACT OF DIGTAL TRANSACTION IN RELATION
WITH CONSUMER BEHAVIOUR

ABSTRACT

The demonetization initiative in India and the growing use of mobile and internet have significantly
accelerated the adoption of digital payments. This shift presents numerous benefits for consumers,
including increased transaction transparency and improved economic stability.
However, understanding factors influencing customer acceptance of various digital payment solutions
remains crucial for further development. This study was conducted by collecting response from the
sample size of 200 people. In this study we are understanding relationship between two variables that
are: - Age in relation to development in digital transaction. And other factors like education, gender
and income that also heavily influence the results. While demographic factors are considered, we
explore the more significant influence of a consumer's overall trust in the payments framework and
banking system on their preferred method.

Furthermore, we analyze how past events like demonetization and the COVID-19 pandemic have
shaped payment choices depending on the transaction objective. Our findings shed light on the
nuanced factors influencing customer behavior. We find that the newer and mid generation usage is
more of digital payments in relation to people above 45. And gender had no impact, while people only
trust bank for bigger transaction.

KEYWORDS: - Digital payments adoption, consumer acceptance, India, demonetization, mobile

payments, economic development, Age, Gender, Education.
 INTRODUCTION

 What Is a Digital Transaction?

A digital transaction is a seamless system involving one or more participants,
where transactions are effected without the need for cash. The digital
transaction involves a constantly evolving way of doing things where financial
technology (fintech) companies collaborate with various sectors of the
economy for the purpose of meeting the increasingly sophisticated demands of
the growing tech-savvy users.

 Brief History Of Digital Transaction :-

Mr. Narenda Modi, Prime Minister of India, demonetized the high-value currency of
Rs. 500 and 1000 in November 2016. In 2015, the "Digital India" concept was
established. The Indian government's main programme, "Digital India," aims to
transform India into a digitally enabled nation. One of Digital India's ostensible
functions is "Faceless, Paperless, and Cashless." The flagship programme of the Indian
government, "Digital India," aims to transform India into a digitally enabled nation.
One of Digital India's ostensible functions is "Faceless, Paperless, Cashless." Various
other measures have aided in the speedier adoption of digital payment systems. Other
government programmes, such as BHIM and UPI, are assisting in the shift and faster
acceptance of digitalpayments. Electronics Digital payment refers to consumer
transactions done at the point of sale (POS) for services and products via internet
banking or mobilebanking via smart phone or card payment. The digital payment
system is divided into the following stages: ( JAKE FRANKENFIELD
, October 11, 2021 )

 Registration 2. Billing 3. Payment options 4. Payment authorization.

 This payment method typically contains three electronic payment
instruments: cash, check, and card. Following demonetization, the e-
commerce sector has seen Cash on Delivery gradually phased out in favor
of various ways of payment such as Card on Delivery, Net Banking,
Debit Card, Credit Card, and so on.
 As part of encouraging cashless transactions and transforming India into
less cash society, various modes of digital payments are available.

1. • Debit / Credit Card Suitable for: Online/offline merchant sale.

2. • RTGS / NEFT Suitable for: High value online transactions.
3. • IMPS Suitable for: Instant transfer.
4. • UPI Suitable for: Instant transfer.
5. • USSD Suitable for: Feature phones without Internet connectivity.
6. • E-WALLET Suitable for: Small-ticket transactions.

In recent years, digital payments have experienced significant growth in India,

revolutionizing the way transactions are conducted and influencing consumer
behavior. The rise of digital payment systems, such as PayTM, Google Pay,
BHIM app, PhonePe, and Amazon Pay, has provided consumers with
convenient and efficient alternatives to traditional cash and cheque transactions.

According to a study conducted by PwC India, the volume of digital

transactions in India has been growing at an average CAGR of 23%. This
indicates the increasing adoption and acceptance of digital payment systems
among consumers (Suryanarayana, 2021).

This growth can be attributed to various factors that have influenced consumer
behavior towards digital transactions. One such factor is the demonetization
period in India, which occurred in 2016. During this time, there was a surge in
the usage of digital payment systems as cash became scarce. Consumers were
forced to explore and embrace digital payment options, leading to a significant
increase in digital transactions. Additionally, the convenience and ease of use
offered by digital payment apps have also contributed to the shift in consumer
Behavior. Consumers are now more comfortable with using digital transactions,
(Kauri
as they provide a seamless and hassle-free payment experience & Mehta,
2023).

REVIEW OF LITERATURE

"It is critical for banks to take into account new digital streams as part of integrated strategy
and keep evolving from the first to the second-generation e - banking: trying to switch digital
from a supporting role to the primary sales and communication channel for banks," says
Balazs Vinnai, general manager, Misys' Digital Channels (April 25, 2016). "It's not easy to
reengineer processes to focus on the user, but banks must embrace digital banking to keep
competitive and relevant."
Individuals and organizations use e-payment systems as a secure and convenient way to make
payments via the internet while also acting as a gateway to technological innovation in the
field of international commerce (Slozko & Pello, 2015).

Dr. Indrajit Sinha, Sanghita Roy noted that while India's e-payment system has seen great
progress, there is still much work to be done to enhance its use. Cash still accounts for 70%
of all transactions. The Technology Acceptance Model was employed in this investigation.
They discovered that fouraspects contribute to the E-payment system's strength: innovation,
incentive, customer convenience, and regulatory framework.

OBJECTIVE OF THE STUDY

• To investigate the impact of respondent age on digital payments.

• Examine the effect of customer education on digital payment usage.
• To investigate the impact of a customer's income status on their use of digital

HYPOTHESIS

• ( Ha ) H0 : There is no significant relation between age of respondents and frequency of using

digital payments
•
• H1: There is a significant relation between age of respondents and frequency of using digital
payments.
 RESEARCH METHODOLOGY
This research is conducted by collecting sample data from a part of population

Where, they had collected a data of some people in Mumbai around 200
people. So the sample size is of around 200 people.

The simple percentage analysis and Chi square test were used to analyses
the respondents' responses. Secondary data and information were gathered
from many scholars and researchers, published e-books, publications
published invarious journals, and conference papers.

DATA ANALYSIS AND INTERPRETATION

Gender NUMBERS PERCENTAGE

male 59 32.2
female 124 67.8
total 183 100 %

The majority of responders, 67.8 percent, were male, while only 32.2 percent were female.
Previous research has found that gender makes no difference in the adoption of technology in
the banking business.
 Age of the NOS PERCENTAGE
respondents
(years)
21-30 20 10.9
31-40 63 34.4
41-50 61 33.3
50 above 39 21.3
Total 183 100

The Demographic Factors of Bank Customers are shown in the table above. It shows that
34.4 percent and 33.3 percent of respondents were between the ages of 31 and 40, and 41 and 50,
respectively. Only 10.9 percent of respondents were under the age of 30, while 21.3 percent were
above the age of 50.

INCOME (IN NOS %

LACS)
Below 1 lac 22 12

1 lac to 3 lac 46 25.1

3 Lac To 5 Lac 61 33.3
5 Lac To 10 Lac 54 29.5
TOTAL 183 100

AS Digital India is developing gross income level of people is also increasing.

And as you can see majority people have has annual income in lakhs
So digital transaction will also increase as income is increasing and spending will
Also increase.
And digital payments is more secure than cash and bank payments as fast payment
Is possible
 education level
25

20

15

education
10

0
primary secondary technical university other

According to the above figure, 14.8 percent of respondents were primary school educated, while
23 percent and 23.5 percent had secondary and technical education, respectively. 20.2 percent
had a university degree, while 18.6 percent had another type of schooling. Previous research has
shown that education plays a role in technology adoption. According to the respondents of
technical education in the study area, technological adoption will be extremely encouraging. Chi-
square Analysis for Hypothesis Testing. Will now be used for further conclusion.
 CONDUCTING CHI SQUARE TEST

Impact of Age (years)

age on
technological 21-30 31- 40 41-50 >45 total
adaptation
Yes 4.37 14.75 13.66 15.85 48.63%

No 6.56 19.67 19.67 5.46 51.37%

TOTAL 10.93 34.43 33.33 21.31 100%
Chi square do p-value
13.99a 3 0.004

Solving :-
The table you provided shows the impact of age on technological adaptation. It
is a 2x4 contingency table, with two rows (Yes and No) and four columns
representing different age groups (21-30, 31-40, 41-50, and >45).

1. Calculate the chi-square statistic.

o Use the formula: χ² = Σ (fₒ - fₑ)² / fₑ, where fₒ is the observed frequency and fₑ is the expected
frequency.
o In this case, χ² = 13.99.

2. Determine the degrees of freedom.

o The degrees of freedom are (number of rows - 1) * (number of columns - 1). In this case, df =
(2 - 1) * (4 - 1) = 3.

Results Interpretation :-

Based on the table, it appears that the project is investigating the relationship between age
and technological adaptation. Here are two possible important points for this project:-

1. People between the ages of 21 and 30 are more likely to adapt to new technologies
than people over the age of 45.
 2. However, it is also possible that other factors, such as education level or
income, could be responsible for this difference.
The table shows that 48.63% of people between the ages of 21 and 30 said they had
adapted to new technologies, while only 34.43% of people over the age of 45 said the same.
This suggests that there may be a positive relationship between age and technological
adaptation. However, it is also possible that other factors, such as education level or income,
could be responsible for this difference.

3. Final answer

o The chi-square statistic (χ²) of 13.99 is significant at the α = 0.05 level because it is
greater than the chi-square critical value of 7.815 for 3 degrees of freedom.
o
o The p-value (0.004) is also less than the significance level of 0.05.
o Therefore, we reject the null hypothesis and that there is no significant association
between age and technological adaptation. (H0)
o And we accept alternative hypothesis that there is a significant association between age
and technological adaptation. (Ha)
o Overall, the data in the table suggests that there may be a relationship between age and
technological adaptation, but more factors like Education, Income, etc. can influence the
result on individual basis.
 CONCLUSION

The study was based on both primary and secondary data. The primary data for the research
aims was acquired only from Mumbai -based samples. Despite the fact that Mumbai is one of the
country's most important cities and a commercial hub in central India, just samples taken from
the city cannot be considered a thorough representation of the country's population.

From this study at least we have reached the intended goal that is to check that what is the
adaptation and usage of Digital payments by the collected sample size.

So, we conclude that due to development in technology there is a new area developing a
FINTECH. Where there are new apps developed like UPI, PAYTM, and GOOGLE Payments. And
various other tech products like Fas tag, RTGS, NEFT, and CRYPTO WALLETS. Age is an
important factor and we observed that people above the age of 45 have problem in adapting
to technology but new generation and people in age group of (21-45) are adaptable.
Income also has impact as big incomes and expenses are done with the help of RTGS OR NEFT.
Gender has no impact on usage. Education has a medium impact as even small shop owner
like tea stall, vegetable vendor also use UPI, PAYTM, etc. So other factors also influence results
on individual basis.

The main advantage of cashless economy is that government can keep the track of black money
and also it helps the environment as less paper is used.

REFRERENCE

1. https://www.npci.org.in/
2. RESEARCHGATE.COM
3. https://www.rbi.org.in/Scripts/PSIUserView.aspx
4. Times of India and Economic Times.
5. https://www.investopedia.com