Business Research Methods

Report
Submitted to – Prof. Avinash Malshe

Research Aim: To understand Indian consumer awareness,

attitudes, and adoption factors regarding CBDC.

APO 7
Shreya Mangal 230201123

Aman Alam 230201166

J S Krishna Sai Dutth 230201055

Aryan Srivastav 230201029

Aakash Banerjee 230201002

Executive Summary
Research Aim: To understand Indian consumer awareness, attitudes, and adoption factors
regarding CBDC.

The research in real life goes into studying the CBDC awareness among the younger population
segments in the Indian scenario that shows to be pretty relevant, and especially digital payment
services users are more interested than others. While a neutral atmosphere holds with respect to
factors like cost, security and so on, the neutral view gains wide acceptance in this matter.

The research entails the standing factors that lead to CBDC adoption and outlines their advantages
offered. Regarding CBDC (digital rupee) initiative of government, it is noteworthy that the views
towards it are positive regardless teaching a segment is aware or unaware.

The research provides a qualified affirmation on the topic of CBDC in the area of India. While there is
an enthusiasm and pleasantness towards the digital rupee and people tend to be optimistic about it,
there are security concerns that need to be tackled, since harbouring them within the e-rupee is
essential for people to embrace and use it. Consumers can be motivated to spreading the new
development by the strong direct communication.

The conclusion would ensure that the concerns related to security are addressed and the eventual
advantages of CBDC are broadcasted effectively. Using the approach of highlighting the advantages
and addressing the concern, the Indian government and central bank shall be able to give a push to
the idea of digital rupee being accepted widely and being adopted by the folks, particularly the
young people who are already familiar with the digital payment system.

Besides others, it’s essential determinant that significantly influences the achievement of either
success or failure in strengthening of and better CBDCs. This range from the change in attitude and
behaviour perspective from the current alternatives to CBDCs.

Research focus was given to the descriptive and inferential statistics with an observation of
regression and correlation analysis with variables depending and independent, factors that directly
influence the consumers’ perception regarding CBDC operations was an object of analysis.

Objectives
1. To identify the overall awareness and understanding of CBDCs among Indian consumers.
2. To gauge Indian consumers' willingness and enthusiasm towards adapting CBDC for everyday
transactions.
3. To identify the key drivers and potential barriers influencing CBDC adoption among Indian
consumers.
4. To assess the impact of social norms and peer influence on CBDC adoption decisions.
5. To compare consumer trust in CBDCs with other forms of digital payments (ex: UPI, mobile
wallets).
 6. To analyze consumer preferences and switching behavior between CBDCs and existing
payment methods.

Target Audience- Middle Aged Working professionals, young adults, Senior citizens

Methodology
Purpose is to learn about the Indian consumer's recognition, mindset, and selection structures
related to Central Bank Digital Currency (CBDC). In India, UPI (Unified Payments Interface) and
mobile wallets lead in digital payment industry but they also face some security challenges of their
own.

The research in real life goes into studying the CBDC awareness among the younger population
segments in the Indian scenario that shows to be pretty relevant, and especially digital payment
services users are more interested than others. While a neutral atmosphere holds with respect to
factors like cost, security and so on, the neutral view gains wide acceptance in this matter.

The research entails the standing factors that lead to CBDC adoption and outlines their advantages
offered. Regarding CBDC (digital rupee) initiative of government, it is noteworthy that the views
towards it are positive regardless teaching a segment is aware or unaware.

The research provides a qualified affirmation on the topic of CBDC in the area of India. While there is
an enthusiasm and pleasantness towards the digital rupee and people tend to be optimistic about it,
there are security concerns that need to be tackled, since harbouring them within the e-rupee is
essential for people to embrace and use it. Consumers can be motivated to spreading the new
development by the strong direct communication.

The conclusion would ensure that the concerns related to security are addressed and the eventual
advantages of CBDC are broadcasted effectively. Using the approach of highlighting the advantages
and addressing the concern, the Indian government and central bank shall be able to give a push to
the idea of digital rupee being accepted widely and being adopted by the folks, particularly the
young people who are already familiar with the digital payment system.

Research focus was given to the descriptive and inferential statistics with an observation of
regression and correlation analysis with variables depending and independent, factors that directly
influence the consumers’ perception regarding CBDC operations was an object of analysis.

Introduction
This study explores the landscape of Central Bank Digital Currency (CBDC) adoption in India,
emphasizing the pivotal role of the Reserve Bank of India (RBI) in transitioning towards a cashless
society.

Investigating consumer perceptions and attitudes, the research delves into awareness, willingness,
and enthusiasm to integrate CBDC into daily transactions.

Crucially, a comparative analysis against existing digital payment methods on factors influencing trust
in the evolving digital financial ecosystem focussing on government-backed digital currency.
Additionally, it identifies key drivers and potential barriers, incorporating a socio-cultural dimension
by analyzing social norms and peer influence.

Secondary Research
Central Bank Digital Currencies (CBDCs) in the Indian context offer benefits like transaction
traceability, secure and instant settlements, emergency distributions, and facilitating cross-border
transactions. The Reserve Bank of India (RBI) emphasizes their role in combating financial crimes
through programmable money, cross-border remittances, retail and offline payments, and supporting
MSME lending for comprehensive digital transformation.

The rising interest in Central Bank Digital Currencies (CBDCs) is driven by their potential to fulfill
public policy goals, ensure economic stability, and offer a secure payments system. In India, ongoing
discussions aim to assess the implementation of CBDC, presenting opportunities for ecosystem
players to develop services facilitating convenient digital transactions for diverse needs.

(PWC Report on CBDC)

India's digital payment sector is projecting a remarkable three-fold propelled by a government

initiatives with the Unified Payments Interface (UPI) leading the transformation. UPI have surpassed
debit and credit cards, surpassing China by 60%. Buy Now Pay Later (BNPL) options offer short-term
loans, contributing to the digital revolution. In FY 2022, UPI constituted 47% of payments, set to
surpass debit and credit cards, showcasing India's dynamic shift towards digital payments.

(Times of India article)

One of the key benefits of CBDC implementation in India is the potential to significantly enhance
financial inclusion. Despite impressive strides in recent years, a significant portion of the Indian
population remains unbanked or underbanked. CBDC can bridge this gap by providing a secure and
accessible digital payment system that allows individuals to participate in the formal financial system,
regardless of their location or socio-economic status. CBDC can enable easy access to banking
services, facilitate low-cost transactions, and empower marginalized communities to participate in
the digital economy.

The diverse growth rates among different payment methods, such as IMPS, NEFT, APBS, and card
payments, highlight a multifaceted approach to digital transactions in India. CBDC could leverage this
diversity by integrating seamlessly with existing digital payment ecosystems, catering to a wide range
of user preferences. As users become more accustomed to digital financial interactions, the
transition to a digital currency issued by the central bank may be more readily accepted.

The introduction of CBDC can streamline financial transactions, making them faster and more
efficient. With traditional banking systems, transactions can be time-consuming, costly, and prone to
errors. By leveraging blockchain technology, CBDC can facilitate instant peer-to-peer transactions,
eliminating intermediaries and reducing costs. Additionally, the transparency provided by CBDC's
underlying technology can help combat corruption and money laundering, as every transaction is
recorded on a secure and immutable ledger, thus ensuring the integrity of the financial system.

(Maulana Azad National Urdu University, Research study)

Findings
The research notes that UPI and mobile wallets appear more than any other banking platform for
digital money transfers, provided people find them easy to handle and feel secure and private
operating with them. On one hand, same as the others security problems and technical issues are
identified as broad categories of obstacles that are impossible to ignore in the current digital
payment systems.

The case study points to the need of the adoption of more effective security measures together with
a quick global settlement system so that cross-border digital payments can be gapless. Surprisingly,
the digital payment users who are very frequent in the usage of these digital payment tend to show
some positive move regarding the adaptation of CBDC in transactions in the future.

SUMMARY OUTPUT

Regression Statistics
0.37102152
Multiple R 3

R Square 0.13765697
0.11662421
Adjusted R Square 3
0.46986611
Standard Error 9

Observations 211

ANOVA
Significanc
Stan df SS MS Upp F eF
dard P- 7.22470
Lowe Uppe 1.44494
Lower 6.54488
er
Regression
Coeffi Erro t valu 5 r r8 95.0 2 95.0 5 1.134E-05
cients r Stat e 95% 95% 0.22077
% %
Residual 0.18 0.85205 45.2587
- - 4 0.59
Interc 0.0496 0.27 011 724 0.493 52.4834
0.592 0.493 264
Total
ept 08017 543 1 210
3 4313 6473 1 43131 7
- 0.02 - 0.01 - - - -
Age 0.0676 843 2.38 818 0.123 0.011 0.123 0.01
score 99541 4 091 6 7608 638 76084 164
Educ - - 0.35 - - 0.05
ation 0.0509 0.05 0.92 749 0.159 0.057 0.159 793
score 16616 521 223 3 7695 9363 76951 6
frequ
ency
of But, a neutral opinion still
digital persists among the users of
paym 0.04 0.29 digital payment through
ent 0.2051 610 4.44 1.41 0.114 0.296 0.114 604
CBDC, who are conscious of
use 38904 8 91 E-05 2323 0455 2323 6
Gend 0.06 0.67 0.49 - - 0.18 the challenges that come
er 0.0463 833 846 824 0.088 0.181 0.088 109 with it such as, cost,
score 63851 6 4 2 3685 0962 36854 6
Occu
patio 0.02 1.16 0.24 - - 0.07
n 0.0278 400 072 710 0.019 0.075 0.019 518
Score 60968 3 8 2 4635 1854 46345 5
security, ease of use, merchant acceptance and trust in the government digital currency project. This
neutrality, in a sense, implies a conservative attitude and a deeper consideration about need for
providing information and ensuring people of the advantages and dependability of CBDCs.

The criticality of dispelling anxiety around security, building trust and, clearly portraying the benefits
of CBDC has been brought forth by the results of the survey, which are likely to encourage wider use
of CBDC by the Indian population, especially among those who are already used to digital payment
systems.

Frequent users of digital payments tend to be more likely to be aware about Central Bank Digital
Currency: Almost half or more than that was the proportion of the sample were aware of CBDC.
Occasional users of digital payments are also likely to be aware of CBDC’s. Students and young adult
professionals i.e. more of younger adults are likely to be aware about CBDC’s.
64

30

4
2

0 -1 8 1 8 -2 4 2 5 -3 4 3 5 -4 4 4 5 -5 4 55 or more

The model explains how 11.6% of it is likely to be affected by Age, Education level, Frequency of
usage of current digital payment platforms, gender and occupation.
Positive Inclination over government digital rupee initiative i.e. sample accepting towards
digitalisation: Preknown awareness of CBDC amongst the sample has majority in favour of its launch
or a neutral connotation.

Unaware people have a positive inclination towards CBDC launch: The sample is almost equally
divided into having a favourable or neutral opinion.

UPI & Mobile wallets are favoured and used due to ease of use of security but still face issues in
these aspects leading to a positive inclination to launch and acceptance to CBDC by at least half of
the sample. Need of enhanced security and seamless cross border transactions means for smooth
digital payments is the key driver to this positive or neutral perspective to CBDC.

Likeliness to use of CBDC for future transactions is uncertain which might be affected by lack of
awareness of scope of benefits of CBDC.

Frequent users of digital payments and students & young adult professionals i.e. more of younger
adults are likely to be aware about CBDC’s.

Conclusion
The emphasis is on enhancement of knowledge and awareness among Indian consumers about
CBDCs and dispelling of their cares and fears related to security, privacy and intricacy. On the one
hand, digital rupee accentuates the digital payment enthousiasms and optimism among young and
those who are more frequent digital payment users, but still, there are certain obstacles which must
be taken into account to pave the way of the mass approval.

To succeed in these obstacles, the research suggested undertaking specific awareness

demonstrations that highlight he two-sidedness of CBDCs as being convenient, secure and cost-
effective. Establishing an atmosphere of trust by means of compelling regulations, user-friendly
systematic approaches, and transparent communication is one of the basic rules to operate in the
realm of digital society. The effect of social norms and peer influence can be used, as well, by
engaging with influencers or early adopters, help the process of crypto assets broadening. Primarily,
providing incentives and keeping medium of exchange compatibility could be done to ease CBDC

adoption, which will be part of the digital transformation and the goal of financial inclusion in India .

Recommendation
 Need for spread of CBDC awareness to expand its scope to the general public to increase its
adoption.
 Ensure transparent communication to build trust and confidence among the general public.
 Improve CBDC‘s Perspective over security,privacy and seamless cross border transactions for
gaining traction and growth to acceptance and usage.
 Due to popularity and prevalence of digital payments, CBDC can be integrated into existing
digital payment systemsalong with RBI backed regulatory frameworks and security standards
for CBDC transactions.
 Collaborate with NPCI & NITI Aayog to incorporate CBDC into India's long-term digital
economy strategy.