International Journal of All Research Education and Scientific Methods (IJARESM),

ISSN: 2455-6211, Volume 13, Issue 3, March-2025, Available online at: www.ijaresm.com

Consumer Perception towards Online Payment System

M Sanjay Rohith1, Selva kumar S2, Dr. A. S. Princy3

1,2MBA Student School of Management Studies, Sathyabama Institute of Science and Technology,Chennai, Tamil
Nadu, India--6000119
3MBA, Ph.D., Assistant Professor, School Of Management Studies Sathyabama Institute of Science and Technology,
Chennai, Tamil Nadu, India – 600119

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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 on digital payment. From the research it is clear that 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 also agree that interaction with
mobile wallet is helpful and that they trust the service providers.

Keywords — Internet, Digital payment, Electronics Consumer transaction, Consumer perception, Traditional
methods

INTRODUCTION

It has been said that every distraction creates opportunities and one such distraction was the declaration of
demonetization by Prime Minister Mr. Narender Modi on 8 th November, 2016. Demonetization created huge
opportunity for digital payments in India and the digital wallet companies snatched the opportunity with both the hands
to enlarge their market share. Demonetization has offered an exceptional platform for acceptance of digital payment, as
a substitute for cash for Indian customers. Acceptance of cashless transaction has been drastically hard-pressed by
Prime Minister Mr. Narender Modi as part of government reform after demonetization of high value currency of Rs.
500 and 1000 (86% of cash circulation).

The demonetization resulted in extraordinary growth in digital payment. By February 2017, digital wallet companies
had shown a growth of 271 percent for a total value of US$2.8 billion (Rs. 191 corers), Indian government and private
sector companies such as Paytm, Freecharge and Mobikwik had been assertively pushing a number of 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 transform
and helped in the acceptance 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 several overseas investors want to spend in digital payment industry which is new eye-catching
destination because of scope of remarkable growth in India. There are number of facilitators which are leading to the
escalation of digital payment and changeover from cash economy to less cash economy. These facilitators include
diffusion of internet connectivity on smart phones, non-banking financial institutions 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 environment for growth of digital payment in India.

Digital Payment Modes in India

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.

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 International Journal of All Research Education and Scientific Methods (IJARESM),
ISSN: 2455-6211, Volume 13, Issue 3, March-2025, Available online at: www.ijaresm.com

Debit/RuPay cards: These are linked to an individual’s bank account and 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: 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.

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 221 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.

LITERATURE REVIEW

Bamasak (2011) stated that there is a vivid potential for m-payment. Security of mobile payment transactions and the
unlawful use of mobile phones to make a payment were found to be of great concerns to the mobile phone users.
Security and solitude were the key concerns for the customers which influence the acceptance of digital payment
solutions. Doan (2014) illustrated the adoption of mobile wallet among consumers in Finland as only at the beginning
stages of the Innovation-Decision Process.

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 populace had access to recognized 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 significant enablers of
digital payment in India. It is further supported by the harmonized efforts of industry, supervisory body and
government. As per RBI’s report ‘Vision 2018’ four pronged policy 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 usage 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.

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 acceptance of digital payments had speeded up 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. It has been observed that ATM transactions are more or less same at 700 million, the transaction
at PoS terminal has increased three times from 109 million in January 2016 to 328 million in Jan 2017.

OBJECTIVES OF THE STUDY

 To know the perception of customers about digital payments.
 To identify the problems faced by the customers while using digital payments.

RESEARCH METHODOLOGY

The sample frame for the study constitutes customers using digital transactions in The total sample size is 221 and the
sample is drawn using simple random sampling technique. The present study is based on primary data collected
with the help of a questionnaire. The data collected is analyzed using various descriptive statistics.

 Research Design : Our study takes an exploratory stance, seeking to unravel the customers perception
towards online payment

 Area of Study : The study is under taken in Chennai city.

 Sample Size : Sample size measures the number of individual samples measured used in a survey as sample
size of 221 respondents.
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 International Journal of All Research Education and Scientific Methods (IJARESM),
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Data Collection: the primary data was collected from 221 respondents using a Google Form (Online survey)

RESULTS AND DISCUSSION

Table 1: Demographic Details of the respondents

S. No. Variable Sub-Category Sample Size Percent

1 Gender Male 74 60.66
Female 48 39.34
2 Age < 20 yrs 44 36.07
20-30 yrs 77 63.11
30 yrs 01 00.82
3 Occupation Student 37 30.33
Job 57 46.72
Business 28 22.95
Total 122 100

Table 2: Digital Payments

S. No. Variable Mean SD

1 Digital Payments 1.93 0.758
Encouragement Factors to do digital
2 2.17 2.833
payments
3 How digital payment is useful 1.80 0.715

4 Problems araised from digital payments 2.25 1.130

5 Mode of payment 1.80 0.812

Table 3: Purpose of Digital Payments

Total
Sample Purpose of digital payments

Demographic Description

n=122 Fast Payments Easy to use Time saving

Male 74(60.66) 27(36.49) 28(37.84) 19(25.68)

Gender Female 48(39.34) 12(25) 24(50) 12(25)

<20 yrs 44(36.07) 11(25) 21(47.73) 12(27.27)

20-30 yrs 77(63.11) 28(36.36) 30(38.96) 19(24.68)

Age
>30yrs 1(0.82) 0(0.00) 1(1) 0(0.00)

Student 37(30.33) 10(27.03) 17(45.95) 10(27.03)

Job 57(46.72) 18(31.58) 23(40.35) 16(28.07)

Occupation
Business 28(22.95) 11(39.29) 12(42.86) 5(17.86)

From the above table it is interpreted that, only 37.84 of male respondents said that usage of digital payments is easy
where as 50 percent of female respondents accepted with the statement. Respondents whose age group range from <20
yrs to >30 yrs, majority of them opined that digital payments are easy to use. 45.95 percent of students stated digital
payment is easy to use whereas only 40.35 percent job holders and 42.86 percent of business people accepted with the
statement.
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 International Journal of All Research Education and Scientific Methods (IJARESM),
ISSN: 2455-6211, Volume 13, Issue 3, March-2025, Available online at: www.ijaresm.com

Table 4: Encouragement factors towards digital payments

Total
Encouragement factors towards digital payments
Sample
Demographic Description
n=122 Family Friends Relatives
Male 74(60.66) 22(29.73) 27(36.49) 25(33.78)
Gender
Female 48(39.34) 20(41.67) 19(39.58) 9(18.75)
<20 yrs 44(36.07) 11(25) 20(45.45) 13(29.55)
20-30 yrs 77(63.11) 31(40.26) 26(33.77) 20(25.97)
Age
>30yrs 1(0.82) 0(0.00) 0(0.00) 1(1)
Student 37(30.33) 12(32.43) 16(43.24) 9(24.32)
Job 57(46.72) 22(38.60) 19(33.33) 16(28.07)
Occupation
Business 28(22.95) 8(28.57) 11(39.29) 9(32.14)

Out of 74 male respondents 33.78 percent opined that relatives encouraged them to use digital payments, whereas
41.67 percent of female respondents stated that family encouraged them to use. 45.45 percent of the respondents in the
age group of <20 years mentioned that friends encouraged them whereas respondents whose age group range between
20-30 yrs 40.26 percent said family encouraged them and respondents whose age is > 30 yrs 100 percent stated that
relatives encouraged them. 43.24 percent of students said friends encouraged the, whereas 38.60 percent of job holders
said family encouraged them and 39.29 percent of business people said friend encouraged them.

Table 5: Usefulness of digital payments

Total
Usefulness of digital payments
Sample
Demographic Description
n=122 Time Saving Easy to use Easy to access
Male 74(60.66) 31(41.89) 29(39.19) 14(18.92)
Gender
Female 48(39.34) 15(31.25) 26(54.17) 7(14.58)
<20 yrs 44(36.07) 17(38.64) 20(45.45) 7(15.91)
20-30 yrs 77(63.11) 28(36.36) 35(45.45) 14(18.18)
Age
>30yrs 1(0.82) 1(1) 0(0.00) 0(0.00)
Student 37(30.33) 14(37.84) 20(54.05) 3(8.11)
Job 57(46.72) 16(28.07) 23(40.35) 18(31.58)
Occupation
Business 28(22.95) 16(57.14) 12(42.86) 0(0.00)

54.17 percent of female respondents conveyed that the purpose of using digital payments is it is easy to use whereas
41.89 percent of male respondents stated that it saves time. Respondents whose age range from less than 20 yrs to 30
yrs said that doing shopping using digital payments is easy. 54.05 percent of students accepted that one of the reason
for using digital payment is it is easy to use followed by 40.35 percent of business people and 40.35 percent of job
holders.

Table 6: Problems aroused from digital payments

Total
Problems aroused from digital payments
Sample

Demographic Description Hacking transaction

n=122 Low speed of Internet Problem with bank
Problem processing issues
Male 74(60.66) 23(31.08) 20(27.03) 12(16.22) 19(25.68)
Gender
Female 48(39.34) 18(37.50) 15(31.25) 9(18.75) 6(12.50)

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<20 yrs 44(36.07) 22(50) 11(25) 4(9.09) 7(15.91)

20-30 yrs 77(63.11) 18(23.38) 24(31.17) 17(22.08) 18(23.38)

Age
>30yrs 1(0.82) 1(1) 0(0.00) 0(0.00) 0(0.00)
Student 37(30.33) 17(45.95) 9(24.32) 7(18.92) 4(10.81)
Job 57(46.72) 17(29.82) 16(28.07) 10(17.54) 14(24.56)
Occupation
Business 28(22.95) 7(25) 10(35.71) 4(14.29) 7(0.25)

37.50 percent of female respondents accepted that low speed of internet leads to disturbance in digital payments, 31.08
percent of male respondents too accepted with the statement. Respondents who age range between 20-30 years and
respondents who are less that 20 years age also accepted with the above statement. Only 10.81 percent of students
stated that transaction processing issues occur while doing digital payments.

Table 7: Mode of Payment

Total
Mode of Payment
Sample
Demographic Description
n=122 Mobile Wallets Internet BankingDebit/Credit Card

Male 74(60.66) 34(45.95) 20(27.03) 20(27.03)

Gender
Female 48(39.34) 21(43.75) 17(35.42) 10(20.83)
<20 yrs 44(36.07) 20(45.45) 15(34.09) 9(20.45)
20-30
77(63.11) 35(45.45) 21(27.27) 21(27.27)
yrs
Age
>30yrs 1(0.82) 0(0.00) 1(1) 0(0.00)
Student 37(30.33) 20(54.05) 10(27.03) 7(18.92)
Job 57(46.72) 18(31.58) 22(38.60) 17(29.82)
Occupation
Business 28(22.95) 17(60.71) 5(17.86) 6(21.43)

Table 8: Ranking of digital payments usage

Total
Ranking of digital payments usage
Demographic Description Sample
n=122 1 2 3 4 5 6 7 8
Male 74 13 13 11 11 16 6 3 1
Gender Female 48 13 7 11 10 3 3 1 0
<20 yrs 44 10 7 5 9 8 3 2 0
20-30 yrs 77 16 13 17 11 11 6 2 1
Age
>30yrs 1 0 0 0 1 0 0 0 0
Student 37 6 3 10 7 8 2 1 0
Job 57 16 8 10 10 7 5 0 1
Occupation
Business 28 4 9 2 4 4 2 3 0

RESULTS DISCUSSION

 Even though customers are happy with digital payments ease of use is rated low. However, users noted that the
process includes lengthy forms with personal data and credit card details cannot be regarded as an easy one.

 According to the responses some characteristics are perceived as more important than others. Characteristics of
primary importance are: use of mobile wallets, time saving and ease of use. Lower level of importance was
attributed to easy to access, fast payments, and low speed of internet.

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 International Journal of All Research Education and Scientific Methods (IJARESM),
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 Not even 50% of business people are comfortable with transaction process

 Female respondent’s usage is high compared to male respondents.

CONCLUSION

Present study has made an attempt to understand customer perception regarding digital payment. Digital payments are
an important mode of completing a particular transaction. From the research it is clear that 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 also agree that interaction with mobile
wallet is helpful and that they trust the service providers. Also customers of different age groups are availing these
services. It is necessary to organizations to create awareness about the importance and usage of digital payments.

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