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DIGITALWALLET APPLICATIONS:
USHERING THE DIGITAL PAYMENTS
*Dr. B.Percy Bose Associate Professor and Head,
Department of MBA,
JyotiNivas College Autonomous,
Bangalore
Ph. 7639261015
Mail Id: [email protected]
**Dr. Jahnavi M. Assistant Professor and Head,
Department of M.Com(FA)
JyotiNivas College Autonomous,
Bangalore
Ph. 9353939778
Mail Id: [email protected] ABSTRACT
Whenever a new innovation was released for public consumption, it was consumed without much
questions being asked as they were tired of older alternatives. The rapid adoption of smart phones over
the last decade has improved telecom connectivity and also with the declining handset prices, more
consumers are ready to try out new technological changes. As commerce is moving to mobile payments,
mobile has become the primary device around which our daily lives revolve and it is shaping how
consumers search, purchase and pay for goods and services. Service like e-wallet is innovation
facilitating easier payments at the time of requirement. The capability to store and process payments has
further allowed companies to create a seamless delivery and payments experience for their users. The
payments landscape in India is undergoing a transformation as, traditionally a cash-based economy, has
seen an increase in card-based and mobile transactions. The value of physical currency in circulation in
the country is one of the highest among other emerging economies. The primary purpose of this study is
to obtain a picture of the Consumer Behavior towards Digital Wallet, a technological innovation as a
mode for settling bills and making payments. In addition the report will inform about the choice of the
preferred Mobile Wallet by the consumer and the various challenges which they have come across while
using the Mobile Wallet. The study will throw light on views which has been understood by going through
various sources of primary and secondary data.
Keywords: Digital wallet, Mobile Wallet, Consumer Behavior, Mobile payments, Technological
innovation.
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1) INTRODUCTION
In the current era of intense competition among different companies where customer is the king, success
depends a lot on the efficiency of the managers in delivering what they have promised to the customers and
the responsibility lies on the organizations to develop such a culture where business ethics are followed,
value for the services is provided and quality services are offered to achieve higher level of customer
satisfaction. For achieving customer satisfaction understanding dynamic consumer behavior is essential.The
entire world revolves around cash transactions. 85% of transactions are in cash across the world. This trend
can be attributed to few apparent reasons, viz. Opaqueness of cash related transactions, inability to trace the
source of its origin and a sense of security for the holder (Mazzotta, B. C. 2017, October 05)
The disadvantages of cash-based system have lead many countries to adopt digital payment modes; which in
entirety is called as cashless economy. A cashless economy is one in which all the transactions are done
through electronic channels such as debit/credit cards, Immediate Payment Service (IMPS), National
Electronic Funds Transfer (NEFT) and Real Time Gross Settlement (RTGS) (Garg, Preeti, and Manvi Panchal
2016).
The benefits of cashless economy are eradication of black money or unaccounted money and an elimination
of all the disadvantages of cash based economy. Cash based economy increases corruption, as cash economies
have high liquidity leading to increased money supply in the financial system. This makes the system less
reliable and less accountable. There are issues related to the transparency of these transactions which renders
it practically difficult to shift and locate the fraudulent activities. The less accountability of the transactions,
results in loss of revenue to the government.The chart apparently depicts the immediate effect of
demonetization.
Table: Status of Mobile payments in India
Mobile payments( Billion transactions) 1.0
Mobile payments value (Trillion USD) 0.2
Mobile payment percentage of overall non cash 5.0%
Mobile payment percentage of overall non cash 0.2%
Source: (KPMG India 2016).
However the good effect of demonetization is that it has lead to a surge in the usage of fintech by the
urbanites. The major investors who have invested in fintech in India are Paytm, Billdesk, Freecharge,
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Mobikwik, Policybazaar. The major business categories/ areas wherefintech is popular are payment gateways,
wallets, mobile wallets and insurance (KPMG India 2016).
(in percentage)
Fig.1 Comparison between cash & non-cash transactions in India projected till 2025.
Source: http://www.dnaindia.com/analysis/column-cashless-but-not-moneyless-2275390
From the above chart it is evident that over the years India’s non-cash usage is going to be almost equal to
cash usage and this is possible only through digital payments
Customer: The term “customer” is typically used to refer to one who regularly purchase from a particular
store or company for personal use. Studying consumers provides clues for improving or introducing products
or services, setting prices, devising channels, crafting messages, and developing other marketing activities by
Kotler, 2008.
Consumer Behavior:
Consumer Behavior is the study of how people buy, what they buy, when they buy and why they
buy.Consumer Behavior is the study of how individual customers, groups or organizations select, buy, use,
and dispose ideas, goods, and services to satisfy their needs and wants. It refers to the actions of the
consumers in the marketplace and the underlying motives for those actions.
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With advancement in technology, things around have changed drastically. Technology caters to man’s
comfort and convenience. Smart phones are not just useful as communication devices, socializing tool, or
only for internet access, but they have now become an important part of the consumer’s day to day
activities for making money transaction or payments. When smart phones can function as leather wallets, it
is called “Digital Wallet” or widely known as “Mobile Wallet”. Digital wallets include the following two
concepts. They are:
MOBILE WALLET E- WALLET
What is Mobile wallet?
A mobile wallet is a way to carry credit card or debit card information in a digital form on mobile device.
Instead of using physical plastic card to make purchases, consumers can pay with their smart phone, tablet,
or smart watch.
What is E- wallet?
E -wallet is an online prepaid account where one can stock money, to be used when required. As it is a pre-
loaded facility, consumers can buy a range of products from airline tickets to grocery without swiping a debit
or credit card, provided their wallet is filled with sufficient amount required for payment.
2) RESEARCH METHODOLOGY
2.1 Statement of the Problem
Consumer behavior research is the scientific study of the processes consumers use to select, secure, use and
dispose of products and services that satisfy their needs. Knowledge of consumer behavior directly affects
marketing strategy.Information technology is a booming sector and the consumers now are widely accepting
the technological changes in the country and worldwide. The digital payment industry is one among which is
seen a continuous growth in the market. Payment systems have witnessed the introduction, acceptance and
wide scale deployment of electronic payment systems. The payment ecosystem has now witnessed the
introduction of mobile payment systems and their associated services.
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The discussion of the study is to understand the consumer behavior towards Digital Wallets and to find out the
reasons for the same as a considerable change has been witnessed on consumer adoption toward Digital
Wallet. As the mode of payment preferred by the consumers change, it brings with it the various challenges
and risk faced by the users of the mobile wallet applications. The study will help to understand how
consumers are willing to adapt to the changing technology and implement them in their day- to- day activities.
The study will also help to throw light on the kind of services preferred by the users or consumers which are
provided by the Digital Wallet payment service providers.
2.2 Objectives of the Study
To understand the consumer awareness towards Digital Wallets
To study the parameters that influence consumers’ behavior in adoption of Digital wallet.
To understand consumer convenience towards Digital Wallet
To study the risk and problems faced by consumer in use of Digital Wallet.
To find out the preferences of the users towards Digital Wallet
2.3 Type of Research
Descriptive research is used to describe characteristics of a population or phenomenon being studied. This
type of research attempts to describe, explain and interpret conditions of the present. The major purpose of
descriptive research is description of state of affairs as it exists at the present. In this method the researcher
has no control over the existing situation. The technique of structured questionnaire was used to conduct
the study.
2.4 Limitation of the Study
The study was restricted to Bangalore City only.
The sample size used for the study is limited to 50only.
Not many use digital wallet.
The respondents may be subjected to bias.
The time limitation is one of the factors which influence the study.
Consumer’s perception change from time to time with the change in technology.
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3) ANALYSES AND INTERPREATION
Table no. 3.1
Showing respondents’ awareness of mobile wallet applications.
Graph no.3.1: showing respondent’s awareness of mobile wallet applications.
The above table and graph depicts that majority of the respondents are aware of mobile wallet applications.
Least percentage (14%) of the respondents are not aware of mobile wallet applications.
Table no. 3.2 Showing consumer’s awareness of various mobile wallet applications.
Graph no.3.2 showing consumer’s awareness of various mobile wallet applications.
86.00%
14.00%
0.00% 20.00% 40.00% 60.00% 80.00% 100.00%
Yes
No
Awareness of mobile wallet apps
percentage
Options Number of Respondents Percentage
Yes 43 86%
No 7 14%
TOTAL 50 100%
Options Number of Respondents Percentage
Pay tm 48 96%
PayPal 20 40%
Free Charge 31 62%
MobiKwik 25 50%
Citrus 6 12%
Others 6 12%
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The above table and pie diagram depicts that majority the respondents are aware of Paytm followed by
Free Charge and MobiKwik. Least percentage of the population is aware of Citrus.
Table no. 3.3
Showing respondents think demonetization has led to increased use of digital payments applications.
Options Number of Respondents Percentage
Strongly agree 18 36%
Agree 23 46%
Neutral 7 14%
Disagree 2 4%
Strongly disagree 0 0%
TOTAL 50 100%
Paytm96%
Paypal 40% , freecharge 62%
Mobikwik
50%,
citrus 12%others 12%
CONSUMER AWARENESS
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Graph no. 3.3: showing respondents think demonetization has led to increased use of digital payments
applications.
From the graph above it can be inferred that majority of the respondents agree that demonetization have
led to increased use of digital payments applications, whereas none of the respondents strongly disagree
that demonetization have led to increased use of digital payments applications which is least from the
population.
Table no.3.4
Showing factors that influenced respondents to adapt to mobile-wallet.
Options Number of Respondents Percentage
Security 2 4%
Retailers widely accept
payments by mobile wallet 3 6%
I like to try new technologies 6 12%
Access to coupons / rewards
/discounts 7 14%
Easy and quick cashless
transactions 27 54%
Others 5 10%
TOTAL 50 100%
36.00%
46.00%
14.00%
4.00%0%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
Demonetisation leading to use of Digital Wallet
Strongly agree
Agree
Neutral
Disagree
Strongly disagree
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Graph no.3.4: showing factors that influenced respondents to adapt to mobile-wallet.
The bar graph above depicts that for majority of the respondents’ easy and quick cashless transactions is the
factor that influenced them to adopt mobile wallet. Security is the factor for a least percentage of the
respondents to adopt mobile wallet.
4) FINDINGS
1. The majority of the respondents prefer cash as their preferred mode of payment than any other mode.
2. The report presents that most of the respondents are aware of Digital Wallet applications.
3. From the analysis presented it is found that Paytm is the Mobile wallet application which is the most popular
among the respondents than various other Mobile Wallet Applications in the market.
4. Majority of the respondents wants their transactions to be Digitalized and cashless in future.
5. The report shows that a majority percentage of the population load 500/- to 1000/- on their Digital Wallet.
6. Most of the respondents agree that Demonetization has led to the increasing use of Digital Wallet.
7. Online shopping is the purpose of using Mobile Wallet for majority of the respondents.
8. Easy and quick cashless transaction is the major factor which influenced respondents to adopt Mobile Wallet
Applications.
4.00%6.00%
12.00%14.00%
54.00%
10.00%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
Security Retailers
widely accept
payments
bymobile
wallet
I like to try
new
technologies
Access to
coupons /
rewards
/discounts
Easy and
quick cashless
transactions
Others
Consumers adoption towards Mobile Wallet
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9. Security concerns are the major drawbacks of M-Wallets applications according to majority of the
respondents.
5) SUGGESTIONS
1. The study shows that majority of the respondents are still continuing with cash as a mode of payment. The
company must showcase the various benefits of using Mobile Wallets and influence the target consumers as
most of the respondents are already aware of Mobile Wallet concept.
2. Paytm is the most popular brand of Mobile Wallet application in the market at present; hence all the Wallet
application should try to come up with various strategies to match up with the top competitors.
3. The company must try to come up with various discount offers to attract more customers to use wallet
application, as the study shows that majority of the respondent’s load 500/- to 1000/- in their preferred Mobile
Wallet and use them on a weekly basis.
4. As the respondents want Mobile Wallet to be widely available in India this gives the wallet application to
widen its boundaries to various other states than just concentrating in Bangalore, Karnataka.
5. There is a great scope to extend its operations to the online shopping business by introducing the application
to be used in for selling various cosmetic products related to spa/ salons.
6. Wallet application must ensure to provide a secure mode of payment as the respondents find this factor as a
major drawback of any M- Wallet application.
7. Wallet application gives extra bonus to every transaction done, but would also be recommended to increase
discounts and offers to users to use the application on a regular basis.
8. Consumers find their information are not being confidential to be the major drawback of M- Wallets and this
reduces the depressing adoption of using M-Wallet. The company must take up major steps like educating the
users to use their biometric to login to their accounts, or a retina scan etc. which will ensure users a safe
transaction.
6) CONCLUSION
Digital wallets are quickly becoming mainstream mode of online payment. Consumers are adopting digital
wallets at an incredibly rapid pace, largely due to convenience and ease of use.The report concludes the
Consumers Behavior towards Digital Mobile Wallet applications which includes consumers awareness,
factors influenced to adopt Mobile Wallets, preferences of payments and applications, risk and challenges
faced by the respondents and the reasons for using the various applications.
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From the study conducted it can be concluded that consumers are willing to adapt to the current technological
advancements in the country. The report shows that Pay tm is the most used Mobile Wallet application among
all other wallets. The results indicate that there exists an untapped market for digital wallets both in terms of
increasing awareness as well as its usage. Online shopping emerged as the prime purpose for usage of digital
wallets. The study observed that respondents prefer using wallets because they save time and are easy to use
and access. However, safety of money transacted remains their major concern for the respondents. Security
issues in terms of fear of cash loss are the prime barriers to the adoption of Mobile Wallet. The researcher can
understand that there is a growing demands for Mobile Wallet applications hence, widening the scope of
Mobile payment Industry.
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Philip Kotler- Marketing Management
Michale R. Solomon- Consumer Behaviour
Leon G. Schiffman, joseph Wisenblit- Consumer
Websites:
https://www.slideshare.net
www.wikepedia.com
http://www.scielo.cl/pdf/jtaer/v7n1/art08.pdf
http://www.iresearchservices.com
www.ziadaa.in s
www.trisysit.com
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