Digital Payment Service in India - A Case Study of Unified Payment Interface

Mahesh A., & Ganesh Bhat. (2021). Digital Payment Service in India - A Case Study of Unified Payment Interface. International Journal of Case Studies in Business, IT and Education (IJCSBE), 5(1), 256–265. https://doi.org/10.47992/IJCSBE.2581.6942.0114

10 Pages Posted: 15 Jul 2021

College of Management and Commerce

Date Written: July 13, 2021

Purpose: The Indian Banking sector is striving hard to popularise digital payments and has gained momentum after demonetization and digital India initiatives. To facilitate digital payments, “National Payment Corporation of India (NPCI)” launched the “Unified Payment Interface (UPI)”, which is an amazing, revamped, and cost-effective breakthrough for enabling digital payment services for all. Proliferation of smartphones, technological innovations, and effective internet communications has signified the usage of mobile payment facility for smartphone users, financial institutions and particularly the banks. To achieve paperless and cashless economy, Unified Payment Interface (UPI) is a potentially innovative way of transferring funds using a virtual payment address established by the National Payment Corporation of India (NPCI). Hence, it is needed to be assessed for its potential to contribute towards achievement of digital economy. Design/Methodology/Approach: This paper is focused on understanding Unified Payment System’s (UPI) growth and its progression in retail digital payment over the years. The study was carried out by exploring secondary data sources and by applying Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis format. Finding/Result: UPI has shown remarkable growth in last couple of years due to customer’s shift towards contactless payments over other methods. Study revealed that the growth of digital payments has increased significantly, especially in the retail payment sector on the UPI platform. Originality value: This study examines UPI's position in the digital payment ecosystem, with an emphasis on identifying UPI's core strengths and growth prospects, as well as areas for future research to investigate India's complete e-payment ecosystem. Paper type: A research case study on Digital Payment Service in India - A Case Study of Unified Payment Interface

Keywords: Digital Payment, Retail Payment, UPI, Digital Transactions, NPCI

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Digital payments and consumer experience in India: a survey based empirical study

  • Original Article
  • Published: 05 January 2021
  • Volume 5 , pages 1–20, ( 2021 )

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case study on digital payment in india

  • Sudiksha Shree 1 ,
  • Bhanu Pratap 2 ,
  • Rajas Saroy 2 &
  • Sarat Dhal 2  

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Propelled by recent policy initiatives and technological developments, India’s digital payment system is a promising success story in the making. At the same time, the data also points towards an increasing usage of cash. While aggregate country-level data can indicate overall preferences of citizens, we use a novel online survey-based dataset to understand how factors such as ‘perception’ and ‘trust’ in digital payments, and experience with online frauds, affect the payment behaviour of consumers. While demographic factors like age, gender and income are relevant factors which determine this choice, we find compelling evidence that a person’s usage of digital payment methods is influenced by her perception of these instruments, as well as her trust in the overall payments framework and banking system in general. We find that the degree to which past-experience with online fraud deters usage of digital payments varies with the purpose of the transaction.

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1 Introduction

The consensus around the origin and the forms of ancient money has kept changing over the course of recorded history. But, what has not changed over the years is what money does; broadly, it facilitates trade in goods and services as medium of exchange and acts as a credible store of value. Modern day trade demands massive payments to be settled fast over long distances with minimum transaction cost. Evidently, to suit these needs the payment systems are being digitised globally. Cash, however, remains a crucial part of the trade. Therefore, the discourse on the current age payment system revolves around cash vs digital transactions.

While cash might seem convenient as it’s ingrained in our habits and is still readily accepted at more places, digital payments offer convenience by saving time and labour. There are further issues with cash use. While it provides a suitable alternative to aid the informal or parallel economy [ 3 , 21 ], digital payment offers itself as a desirable tool for institutions to fix this problem of traceability. In fact, governments around the world have taken drastic measures at huge costs to clear markets of ‘black money’. Research in the behavioural sciences conveys that people experience higher ‘pain of paying’ when paying in cash than digitally, and this contributes to deferred payments [ 17 , 19 , 20 ]. While cash may not seem to impose any direct transactional cost like digital money, it is still costly for both governments and end-users. A 2014 study found out that residents of Delhi spent around 6 million hours and ₹91 million to access cash, while the Reserve Bank of India (RBI) and commercial banks together spent about ₹210 billion towards currency related operating expenses in the same year. But on the other hand, there are also huge implicit costs to digitise the existing systems and nudge people to change [ 14 ].

In the last decade, India has rapidly digitised its payment systems and promises huge potential in the area. Digital payments recorded an increase of 46.5% in total volume in FY19 on top of an increase of 60.6% in FY18. The Unified Payments Interface (UPI), a payment system that was launched in 2016, has surpassed the milestone of a billion transactions per month. The progress in digitisation has been driven by a healthy mix of technological innovation, policy interventions, and expansion and strengthening of existing infrastructure on the supply side, coupled with an increasing proportion of the population adopting financial and digital instruments on the demand side. The government of India and the RBI have been working in synergy to push for policy and regulatory reforms. Enablers such as Jan Dhan accounts, Aadhaar and penetration of mobiles, and policies like Demonetisation and Goods and Services Tax have brought people closer to technology and banks. Recently, NEFT (National Electronic Funds Transfer) was made operational for 24 h on all days of the week, and RTGS (Real Time Gross Settlement) is expected to follow soon. The launch of UPI, along with already available digital payment modes like NEFT, IMPS, cards and Prepaid Payment Instruments (PPIs) has increased the options available to the consumer. The number of PoS (point of sale) terminals have also increased by about 40 lakhs in the last five years. PoS terminals and lightweight acceptance infrastructure such as QR codes have boosted Card/PPI based payments. Additional payment systems such as Bharat Bill Payment System (BBPS), National Electronic Toll Collection (NETC) system, RuPay cards and AePS have also boosted digital payments and the intent to incorporate modern-day technologies such as tokenisation and contactless payments will further the progress.

Despite this progress, cash use still seems to be on the uptick in India. Our paper seeks to highlight the important factors at the individual level, which influence the consumer’s decisions to use cash or digital payment. While it is critical to push for technological innovations and policy reforms, it is also imperative to understand the aspects that motivate or hinder the adoption of these technologies by the end-user. A recent survey [ 5 ], on the readiness of consumers towards adoption of newer payment technologies, ranked India second out of 27 economies on the FinTech adoption Index. Research conducted at the individual consumer level can provide an insight to understand how certain aspects are at play while making a payment decision. To this end, we use a comprehensive and multidimensional online survey which addresses many hitherto untouched dimensions of this topic, such as the difference in digital spending over various expenditure categories (groceries, e-commerce, utility bills, etc.), the choice of consumers to go purely digital or exercise a mix of cash and digital options, and the effect of psychological factors like perception and trust.

There is a dearth of studies and data covering the behavioural aspects at individual level that have an impact on choice of payment behaviour in the Indian economy. Given the massive heterogeneity of our population, different samples might produce disparate results. The High-Level Committee on Deepening Digital Payments [ 15 ] recommended that there should be periodic surveys to gauge user experience and attitude towards digital payments. The present study, is a small step towards filling the research gap in the context of such analysis.

Our key findings point towards a significant impact of perception of the payment system on how people choose to pay. Not only does a positive perception motivate people to go ‘digital’, but a relatively negative outlook on cash also has a similar impact. This finding is important in light of increasing cash use at the macroeconomic level in the country. Another significant factor is confidence in the payment system. Respondents who trust the service providers and regulators seem to have a greater likelihood of paying digitally. We find inconsistent behaviour when studying the impact of experience of digital payment fraud on choice of payment tool. The impact that experiencing such a fraud has on the choice to pay digitally differs according to the purpose of the transaction. The remainder of the study is presented in five sections pertaining to existing literature, data and methodology, sample summary statistics, empirical findings and conclusion and policy implications.

2 Related literature

The terms digital transaction, electronic transactions, paperless transaction or cashless transaction are almost used interchangeably in common parlance. The RBI Ombudsman Scheme for Digital Transactions (2019) defines digital transactions as “a payment transaction in a seamless system effected without the need for cash at least in one of the two legs, if not in both. This includes transactions made through digital/electronic modes wherein both the originator and the beneficiary use digital/electronic medium to send or receive money”. However, in our paper, a digital transaction is one where the payer and payee both use digital modes of payment.

Policies in many parts of the world are being designed in favour of non-cash payments because of the various problems that cash poses. Cash fuels the parallel or black economy, therefore, phasing it out might solve this problem, especially with large denomination notes [ 20 ]. The cost of printing, destroying and other cash related operational expenses in India are estimated at 1.7% of GDP [ 23 ]. Cash, however, remains a significant part of all the transactions in most countries [ 6 ].

While reading into data on the macro-level can give us a broad idea of people’s overall preferences, data at the individual level gives us an insight into how certain factors impact the choices/decisions consumers make regarding the mode of payment. Following this line of thought, several studies have analysed such issues at the level of the consumers. They reveal that the choice of payment method is impacted by a host of consumer-specific and technological factors. Transaction size has a significant impact on what mode of payment people choose. A cross- country comparison of payment diary survey data of seven countries showed that cash was the preferred mode of payment for smallest 50% and largest 25% of transactions [ 2 ]. In another study, social marginal costs were computed for various instruments for small and large transaction sizes and it was found that for larger transaction sizes, there were significant differences in cost for electronic vs non-electronic payments [ 8 ]. Studies show that demographic characteristics also play a significant role in how people choose to pay. It was found that better education and higher income lead to lower cash use compared to non-cash modes. Certain categories of age show a stronger preference for digital payments Bagnall et al. [ 2 ].

Consumer perceptions on safety/risk, convenience/ease of use, anonymity and costs have been shown to affect payment systems adoption significantly. Png and Tan [ 16 ] show that concerns about privacy emerged as one of the main psychological factors causing a bias towards cash for retail transactions. Kahn et al. [ 10 ] show that business in the unorganised economy was attributed to transactions that could be made in cash and did not reveal the agent’s identity. Bagnall et al. [ 2 ] analysed data from cross-country consumer diary surveys and found that consumers who rated cash high on ‘ease of use’ ended up using it more. In a study assessing payment perception of Dutch consumers, non-price parameters such as ‘acceptance’, ‘convenience’, ‘transaction speed’ and ‘safety’ were used to gauge the perception of payment instruments used at PoS terminals [ 9 ]. Several studies have used the Technology Acceptance Model (TAM) to show ‘perceived usefulness’ and ‘perceived ease of use’ have a significant impact on behavioural intention and thus, actual use of electronic payment systems [ 12 , 18 ].

Perceived trust in the payment system is shown to have a positive effect on the usage of digital modes of payment [ 13 ]. While the central bank and banks are traditional regulators and service providers of payments systems respectively, non-banks have also emerged as new players in the framework. A recent empirical study conducted by the Monetary Authority of Singapore [ 16 ] found that trust in banks impacts the nature of the transaction. A cross-country analysis shows that residents in countries that reported lower trust in banks preferred cash for making transactions. In some cases, while an increase in trust can lead to the opening of accounts, it might not translate to actual usage of those accounts [ 7 ]. Central banks also play a pivotal role in ensuring safety, integrity and stability of the payments system. Experience of online fraud can shape beliefs of perception and trust and can have a direct impact on payment behaviour. Media coverage of these incidents is shown to affect card payment [ 11 ]. The direction, strength and frequency of media coverage affected debit card use. Few studies show that people simply use digital modes of payment because they have exhausted their stock of cash in hand. It is called ‘cash first’ or ‘cash-burning’ and is perceived to be an optimal policy by the consumer [ 1 ]. Some studies also point that people still pay in cash simply because it is difficult to grow out of habits [ 9 ].

3 Survey data and empirical methodology

For the purpose of this study, primary data is collected using a structured questionnaire circulated online (Appendix 1). Following snowball sampling, the survey was shared on various social media platforms for better reach. The questionnaire was drafted in English and Hindi, to both expand and diversify the sample. It consists of 28 questions that are divided into seven sections viz. demographics, access to and usage of technology, awareness of different modes of digital payment, preference and perception on cash and digital payment systems, spending habits, experience related to fraud, and feedback on awareness campaigns.

Our study broadly aims to understand the impact of user perception, trust in payment systems, and experience of online fraud on the choice of mode of payment. For regression analysis, mode of payment is taken as the dependent variable and the independent variable is added to a baseline model according to the hypothesis being tested. Firstly, a baseline model is obtained for all five types of purchases—grocery, utilities, online shopping, durables, and gold. These transactions range from low to high value transactions. The responses recorded for different types of purchases have the following three alternatives:

Always pay in cash,

Always pay digitally, and

Sometimes pay in cash and sometimes digitally.

Since the dependent variable is categorical and has more than two categories, a multinomial logistic regression is best suited for regression analysis. A multinomial logit model is an extension of logit model, with more than two categories, in no particular order. Maximum likelihood estimation is used to obtain the parameters of the model.

Let the model have j  = 1, 2 …, J categories for the dependent variable y , and X be the matrix of independent variables. In a multinomial logit model, we estimate a set of coefficients β j  = ( β 1, β 2…, β J ) corresponding to each outcome j . Setting j  = 1 as the reference or base category ( i.e ., β 1  =  0) , we have:

The parameters of the model are reported in terms of odds or log odds. Given any two possible categories for the dependent variable:

where ( β m  −  β n ) is the  effect of X on log of odds of m versus n . To get parameters of other categories of the outcome, they are similarly compared to the common reference category. For our study, cash usage is taken as the reference category. We begin by creating a baseline logistic regression model by taking demographic characteristics such as gender, age, education, family income, occupation, and place of residence as categorical independent variables. The dependent variable is coded as:

y  = 0 for cash (reference)

y  = 1 for digital payments

y  = 2 for sometimes cash and sometimes digital payments

The following multinomial logistic model is estimated:

The parameter β kj is a vector of β 0j, β 1j … β kj where j ( j  = 0, 1, 2) is the category of dependent variable and there are K  +  1 ( k  = 0, 1, …, K ) independent variables. Since cash is the reference category, β k0 is set to 0. Therefore, β k1 and β k2 are respective log odds relative to the reference category.

Since, all the independent variables are categorical, they are coded as dummy variables. The reference categories for each of the independent variable in the baseline model are mentioned in the first column of Table 1 below.

Next, we add four additional independent variables of interest to the baseline model one by one, to observe the impact of perception (of both cash and digital payment modes separately), confidence in the payment system and fraud experience on the choice to pay digitally.

The perception of cash and digital modes of payment is recorded for four parameters- cost, convenience, safety and privacy/anonymity on a three-point Likert scale with the alternatives ‘bad’ (0), ‘okay’ (1) and ‘good’ (2). The mean score for perception is computed as the simple average of parameter-wise scores for cash and digital payments. Confidence in payment systems is measured on the parameters- trust in the RBI, trust in your payment service providers (e.g. FinTechs) and trust in stability and integrity of your bank. A five-point Likert scale is to measure responses, ranging from strongly agree (0) to strongly disagree (4). The mean score is computed as a simple average of the four parameters. Online fraud experience is quantified based on familiarity with such incidents. The respondents were asked to choose from following alternatives-

I have been a victim to digital payment frauds.

I have received such calls/mails/texts but carefully avoided them.

I have not received such calls/mail/texts but know someone personally who has been a victim.

I have not received such calls/mail/texts and do not know anyone personally who has been a victim.

4 Sample summary statistics

A snapshot of our sample of 640 respondents is given in Chart  1 . The respondents are mostly male and educated. Most of them are either salaried employees, working in the government or private sector. This may be due to the online nature of the survey, and circulation limited to the social circles of the authors, which occurred due to the enforcement of the COVID-19 induced nationwide lockdown in India during the survey period. Responses were received from twenty states of India. The corresponding districts were divided into three tiers according to the HRA (Housing Rent Allowance) classification by the Department of Expenditure, Government of India.

figure 1

Demographic characteristic of the sample

The responses are summarised in Appendix 2. Awareness as well as usage regarding various digital payment instruments were high in the sample. It is important to keep this in mind while interpreting how payment behaviour is affected by other variables. Our respondents, being from the relatively well-off sections of society, were much more aware and comfortable with cards and UPI, rather than AEPS and USSD code-based payments. Digital mode was preferred for online shopping, paying utility bills, and purchasing durables (mostly medium to high value transactions). A combination of cash and digital modes was preferred for purchases of grocery and gold, which are starkly different in terms of transaction value. Being solely dependent on cash was relatively less preferable for all purposes.

The perception of cash and digital payments are recorded on four parameters viz., ‘convenience’, ‘cost of payment’, ‘safety’, and ‘privacy/anonymity’. It is observed that on an average, digital payments perform better than cash on all four fronts. Confidence in digital payment systems is assessed on four parameters, with regards to banks (preference for depositing money in a bank, as well as trust in one’s own bank), the central bank and in other participants like payment aggregators. Respondents seemed more confident in the RBI and banks, as compared to other service providers.

Technical issues, followed by low acceptance and lack of trust were identified as the major hindrances with digital payments. The experience of online fraud is divided into four categories based on their potential intensity of impact of the fraud. Out of 630 respondents that answered the question, 532 have had some experience of online fraud. Out of 411 respondents who had experienced the incident personally, a majority (279) reported no change in the nature of payments and only 26 mentioned that either they had completely switched to cash or had reduced the use of digital mode of transaction. Respondents were also asked if they reported the incident to the concerned authority after they experienced the fraud personally. Most of the respondents did not report the incident, especially if they had not faced any losses.

5 Multinomial regression model: results and analysis

The baseline model (Appendix 3) provides insights on the effect of demographics on the choice of mode of payment.

5.1 Effect of demographics on mode of payment

Males are more likely to use digital modes of transaction as compared to their female counterparts for both purely digital or a combination of cash and digital instruments. With respect to age, there is pressing evidence in the case of online shopping that older individuals are less likely to pay digitally. While the coefficients are not statistically significant for other kinds of purchases, their signs support this general observation. Education is also seen to have an enabling effect on people when it comes to going digital. The tendency to avoid paying solely with cash for groceries and utilities dwindles with an increase in the level of education of the respondent. Income levels have a statistically significant, positive impact when it comes to online shopping and gold purchases through the exclusively digital payment route. Lower income groups may prefer paying using cash on delivery. Occupation and place of residence have a significant impact on choice of mode of payment for mid and high-value transactions. Homemakers, unemployed and self-employed respondents are least likely to pay digitally. For place of residence, respondents living in Tier-1 cities are more likely to pay digitally.

In general, our results point out that more affluent and privileged groups are still more likely to go digital, compared to disadvantaged groups. Hence, while efforts to expand relevant infrastructure and nudge behavioural change are welcome, an upliftment of the general standard of living of the public, education and urbanisation may also be important ways to promote digitisation of payments.

5.2 Experience of online fraud

The experience of digital payment fraud is measured on a scale of four, with ‘0’ implying ‘I have been a victim of digital payment fraud, which is the highest possible impact of fraud on a person. At the other end, ‘3’ stands for ‘neither experienced digital payments fraud nor know anyone who has been a victim’. The baseline model is augmented with these additional categorical variables, and the results are presented in Table 2 . The reference category for the four fraud indicator variables is the response ‘3’, i.e., the respondent has neither been a victim of digital payment fraud, nor do they know of someone who has. Our paper highlights that frauds have differential impact based on the purpose of the transaction. For grocery payments, experiencing such frauds, first hand or otherwise, seems to demotivate people from using digital payment modes, but there is no such evidence for other types of transactions. In fact, respondents preferred using a mix of digital payments and cash for utilities and durables even if they had previously fallen prey to such frauds. It may be easier for consumers to switch to cash for grocery purchase, as compared to settling utility bills or buying durables.

5.3 Perception of cash vs digital payments

Perception of cash is scored on four parameters- cost of payment through cash, convenience of payment, privacy or anonymity concerns about the payment, and safety of payment. The scores range from 0 (bad) to 2 (good). The total score is computed by taking an average of all the four parameters. The total score is a continuous variable and is added to the baseline model. The resultant coefficient is reported in log odds. As is evident from Table 3 , perception of cash has a strong and significant impact on which mode of payment is chosen by the respondent. As the perception of cash improves, the likelihood of paying digitally decreases across all purchase categories. The reference alternative for payment is taken as payments made only/ always in cash, implying no (zero) relation with perception of cash. As perception improves the likelihood decreases most for grocery (low-value payment) and online payments and least for payments made for purchasing gold followed by durables, both high-value payments.

On the flip side, we also consider the total score for perception of digital payments, which is calculated similar to that for cash above. The coefficients (Table 4 ) are positive and statistically significant, implying that as perception improves, so does the likelihood of paying digitally. Here also, the reference alternative is using only cash. In terms of magnitude, the perception variables seem to affect grocery spends the most and gold spends the least. It can be inferred that a positive outlook on digital payment modes motivates the respondent to pay digitally. However, digital payments still have a long way to go if they are to prove themselves as good substitutes to the cheapness, convenience and privacy of cash use. Another observation from the above results is that high-value payments (gold and durables) are relatively less affected by perception of modes of payment, when compared to low- value payments (grocery).

5.4 Trust in payment system

Besides their perception of payment modes, respondents were also asked about their trust or confidence in the payment system as a whole, which was measured on four parameters. A five-point Likert scale is used, with ‘0’ or ‘strongly agree’ implying high confidence in the payment system and ‘4’, which stands for ‘strongly disagree’ implying extreme lack of confidence in the payment system. The total score is computed by taking an average of scores obtained on all the parameters. As expected, a deterioration in consumer confidence in digital payment systems (or an increase in the ‘lack of trust’ score) worsens the likelihood of paying digitally (Table 5 ).

At the end of the survey, respondents were also asked to give their feedback on digital payments. This gives us an indication of overall sentiments and main concerns of consumers towards digital payments. In Chart  2 , a ‘ wordcloud ’ based on 50 most frequently occurring words in the feedback highlights that consumers favour the ‘convenience’ offered by digital payment methods and have an overall positive sentiment towards such technology-based inventions.

figure 2

Textual analysis on feedback

6 Conclusion

While governments, regulators and service-providers are working in synergy to enhance the electronic payments systems and related infrastructure, it makes sense to study how these options are perceived by the end-user. The key policy recommendation from our study is that incorporating feedback and gauging public perception can further catalyse digitisation. We observe through our study that perception of digital payment instruments affects the payment behaviour of an individual. Digital payments were not only driven by a positive outlook on digital payments but also a negative outlook on cash. Contrary to popular belief, customers were seen to be willing to discount online fraud experience in the face of higher convenience offered by digital payment modes. The impact of experiencing fraud on the choice to pay digitally differs according to the purpose of the transaction. Also, we cannot ignore the role played by demographic factors in better digital payment adoption. Digital payments adoption is expected to increase in line with the overall socioeconomic development of the population.

While our collected data is from a geographically diverse set of respondents, it is still limited to a certain part of the population. The data has been collected during a country-wide lockdown and therefore could only include respondents who were willing to fill the survey online (English or Hindi). Thus, most of the respondents were already digitally literate, educated and economically sound when compared to the population. This is one of the major limitations of the study. Further, since responses were collected in extraordinary circumstances of nationwide lockdown, they may be biased in the sense that these were times when many were compelled to pay digitally for fear of contracting COVID-19. Also, e-commerce and technology firms (with higher acceptance of digital payments) had stepped up their services, filling in the vacuum created by closure of brick and mortar stores. Various central banks around the world conduct payment diary surveys to gauge useful variables at the individual level and observe their impact on payment behaviour. In the future, surveys like these could be taken up with a broader sample and in a more structured manner, as things gradually return to normal.

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Survey on consumer experience and perception about digital modes of payments: questionnaire

See Appendix Tables 6 , 7 , 8 , 9 , 10 , 11 , 12 .

See Appendix Fig. 3 . 

figure 3

Data summary

See Appendix Table 13 .

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Shree, S., Pratap, B., Saroy, R. et al. Digital payments and consumer experience in India: a survey based empirical study. J BANK FINANC TECHNOL 5 , 1–20 (2021). https://doi.org/10.1007/s42786-020-00024-z

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DOI : https://doi.org/10.1007/s42786-020-00024-z

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Digital Payments in India: A US$10 Trillion Opportunity

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India’s digital payments landscape has transformed dramatically over the past five years and is set to become a digital payment economy. This report, published in collaboration with PhonePe, provides a detailed outlook on the factors accelerating the growth of digital payments in India, shifting consumer behavior towards contactless payments, perspective on game-changing initiatives, and the progression from embedded payments to embedded finance, thus unlocking a significant change in access to credit for small merchants due to the creation of a digital transaction trail. The report forecasts the digital payment market to more than triple to $10 trillion in the next five years, with non-cash contributions constituting nearly 65% of all payments, wherein 2 out of 3 transactions will be digital in the next five years as opposed to 2 out of 5 transactions today. Merchant payments will emerge as the most powerful driver of this growth, outpacing person-to-person fund transfers. The report provides a detailed outlook on the critical imperatives that stakeholders need to take to strengthen the country’s digital infrastructure in order to unlock the potential of digital payments in India.

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India Encashing On Digital Payments

Case study: solar energy, india encashing on digital payments.

September 5, 2018

Cashless transactions in India have grown at a fast clip and are expected to reach US$ 1 trillion annually by 2025; providing immense benefits for the economy.

solar-energy

The Government of India has also taken important measures to boost digital payments as part of its goal to transform India into a digital economy. The National Payments Corporation of India (NPCI), which is an initiative led by RBI and Indian Banks Association, launched the Unified Payments Interface (UPI) on April 11, 2016. UPI seamlessly manages multiple bank accounts within one mobile application of any participating bank 1 . This ecosystem that was built under NPCI has certainly caught on with accountholders. In August 2016, the interface handled 93,000 transactions worth Rs 3.1 crore for 21 banks. This has grown to 31.2 crore transactions valued at Rs 54,212 crore and 114 banks in August 2018 2 .

The NPCI also developed the Bharat Interface for Money (BHIM) app, which was launched by the Hon’ble Prime Minister Shri Narendra Modi on December 30, 2016. BHIM provides users with the facility of fast and convenient digital payments using UPI. From the total UPI transactions in August, around 16.5 million transactions amounting to Rs 6,872.57 crore were done through the BHIM app 3 . According to a tweet by Shri Subhash Chandra Garg, Secretary, Department of Economic Affairs, Ministry of Finance, Government of India, around 100 million Indians are now connected to the digital payments ecosystem.

UPI Transaction

In a study released in March this year, ACI Worldwide and AGS Transact Technologies further project that digital transactions in India could reach a value of US$ 1 trillion annually by 2025 4 . According to this report, four out of five transactions could be done digitally in India by that year. Key drivers for this shift will be doubling of smartphone users to 500 million, initiatives like UPI ensuring bank interoperability, connected devices (30 billion such devices anticipated globally by 2025), growth in new use cases for digital transactions and spread of digital payments to semi-urban and rural areas 5 .

The profound ongoing shift to cashless transactions bodes well for the Indian economy in many ways. Since digital payments can be tracked and authenticated, they will help curb black money flow and boost the formal economy. Usage of digital money will reduce the effort and cost pertaining to printing currency notes/coins. Moreover, digital enablement is helping the Government of India ensure Direct Benefit Transfer to beneficiary accounts for its schemes, thereby enhancing financial inclusion. Cumulative savings from DBT to the exchequer since 2013 are projected at Rs 1.25 lakh crore by the end of 2018-19 6 .

References:

1 - https://www.npci.org.in/product-overview/upi-product-overview  

2 - https://www.npci.org.in/product-statistics/upi-product-statistics  

3 - https://www.livemint.com/Industry/m1xfHBaM1tmqhPYaC2FmXP/UPI-transactions-cross-300-million-in-August.html

4 and 5 - https://www.aciworldwide.com/news-and-events/press-releases/2018/march/aci-worldwide-and-agsttl-highlight-megatrends-shaping-india-digital-payments-revolution

6 - https://www.ibef.org/research/india-study/jam-trinity

Swatch Bharat

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  • DOI: 10.47992/ijcsbe.2581.6942.0114
  • Corpus ID: 237835003

Digital Payment Service in India - A Case Study of Unified Payment Interface

  • Mahesh A. , Ganesh Bhat
  • Published in International journal of case… 30 June 2021
  • Business, Computer Science, Economics

Figures and Tables from this paper

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9 Citations

India’s digital payment landscape – an analysis, a systematic review and research agenda of digital payment system with reference to unified payment interface, consumer perception towards cashless economy with special reference to unified payments interface (upi), assessing the influence of the digital india initiative on digital payment mechanisms: a comprehensive study on policy-driven digitalization, the adoption of digital payments in emerging economies: challenges and policy responses, adoption of digital payments in emerging economies: challenges and policy responses, shaping the future of financial inclusivity: a critical analysis of the recent innovations of the unified payments interface (upi), a performance analysis of indian msmes, journey from electronics to healthcare technology – philips, healthcare product maker, 44 references, unified payment interface—an advancement in payment systems, digital payment and banking adoption research in gulf countries: a systematic literature review, digital technology in the realm of banking: a review of literature, the determinants of digital payment systems’ acceptance under cultural orientation differences: the case of uncertainty avoidance, cashless transaction: modes, advantages and disadvantages, a new abcd technique to analyze business models & concepts, swot analysis of the application of international standard iso 14001 in the chinese context. a case study of guangdong province, do digital payment transactions reduce corruption evidence from developing countries, applying swoc analysis to an institution of higher education, let's move to "universal corporate governance theory", related papers.

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case study on digital payment in india

  • Case Study , Finance

A Case Study of Paytm: Revolutionizing Digital Payments in India

A Case Study of Paytm: Revolutionizing Digital Payments in India

  • December 16, 2023

In recent years, the digital payment landscape in India has witnessed a remarkable transformation. One company that has played a significant role in this revolution is Paytm . This case study delves into the journey of Paytm, highlighting its key milestones, strategies, and impact on the Indian economy.

Paytm was founded in 2010 by Vijay Shekhar Sharma with the aim of making digital payments accessible to all Indians. Initially, it started as a mobile recharge and bill payment platform. However, recognizing the potential of digital wallets, Paytm expanded its services to include peer-to-peer transactions, online shopping, and even banking services.

Key Milestones

Paytm’s journey has been marked by several significant milestones:

1. Demonetization Boost

In 2016, the Indian government’s bold move to demonetize high-value currency notes provided a massive opportunity for digital payment platforms. Paytm capitalized on this by promoting its services as a convenient alternative to cash transactions. This led to a surge in the number of users and transactions on the platform.

2. Strategic Partnerships

Paytm forged strategic partnerships with various stakeholders, including banks, e-commerce platforms, and offline retailers. These collaborations helped expand its user base and acceptance across both online and offline channels.

3. Paytm Payments Bank

In 2017, Paytm became the first digital wallet company to launch a payments bank in India. This move allowed Paytm to offer a wide range of banking services, including savings accounts, debit cards, and digital loans.

4. Diversification into E-commerce

Recognizing the potential of the e-commerce market, Paytm expanded its services to include online shopping. It launched the Paytm Mall platform, offering a wide range of products and attracting millions of customers.

Strategies for Success

Paytm’s success can be attributed to several key strategies:

1. User-Friendly Interface

Paytm’s user-friendly interface made it easy for even non-tech-savvy individuals to adopt digital payments. The app’s intuitive design and simple navigation contributed to its widespread adoption.

2. Cashback and Discounts

Paytm leveraged the power of cashback offers and discounts to attract and retain users. These incentives encouraged users to make more transactions on the platform, further driving its growth.

3. Focus on Merchant Acceptance

Paytm actively focused on increasing its acceptance among merchants, both online and offline. It offered seamless integration options, attractive pricing models, and dedicated support, making it an attractive choice for businesses.

Impact on the Indian Economy

The rise of Paytm has had a profound impact on the Indian economy:

1. Financial Inclusion

Paytm’s services have played a crucial role in bringing financial inclusion to millions of unbanked and underbanked individuals in India. It has provided them with a safe and convenient platform to manage their finances.

2. Boost to Digital Payments

Paytm’s success has significantly contributed to the growth of digital payments in India. It has helped reduce cash dependency, leading to increased transparency and accountability in financial transactions.

3. Job Creation

Paytm’s expansion has created numerous job opportunities, both directly and indirectly. From customer support to technology development and merchant onboarding, Paytm has contributed to employment generation in the country.

4. E-commerce Growth

Paytm’s foray into the e-commerce sector has provided a platform for small and medium-sized businesses to reach a wider customer base. It has contributed to the growth of the Indian e-commerce industry.

Paytm’s journey from a mobile recharge platform to a leading digital payment and e-commerce player is a testament to its innovative strategies and relentless focus on customer experience. Its impact on the Indian economy is undeniable, driving financial inclusion, digital payments, job creation, and e-commerce growth. Paytm continues to evolve and shape the future of digital payments in India.

  • Tags : digital payments , India , Paytm

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Digital Payment Service in India - A Case Study of Unified Payment Interface

  • 1. Assistant Professor, Government First Grade College, Talakadu, Mysuru, India
  • 2. Research Professor, CMC, Srinivas University, Mangaluru, India

Description

Purpose: The Indian Banking sector is striving hard to popularise digital payments and has gained momentum after demonetization and digital India initiatives. To facilitate digital payments, “National Payment Corporation of India (NPCI)” launched the “Unified Payment Interface (UPI)”, which is an amazing, revamped, and cost-effective breakthrough for enabling digital payment services for all. Proliferation of smartphones, technological innovations, and effective internet communications has signified the usage of mobile payment facility for smartphone users, financial institutions and particularly the banks. To achieve paperless and cashless economy, Unified Payment Interface (UPI) is a potentially innovative way of transferring funds using a virtual payment address established by the National Payment Corporation of India (NPCI). Hence, it is needed to be assessed for its potential to contribute towards achievement of digital economy.

Design/Methodology/Approach: This paper is focused on understanding Unified Payment System’s (UPI) growth and its progression in retail digital payment over the years. The study was carried out by exploring secondary data sources and by applying Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis format.

Finding/Result: UPI has shown remarkable growth in last couple of years due to customer’s shift towards contactless payments over other methods. Study revealed that the growth of digital payments has increased significantly, especially in the retail payment sector on the UPI platform.

Originality value: This study examines UPI's position in the digital payment ecosystem, with an emphasis on identifying UPI's core strengths and growth prospects, as well as areas for future research to investigate India's complete e-payment ecosystem.

Paper type: A research case study on Digital Payment Service in India - A Case Study of Unified Payment Interface

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Digital Payment Service in India -A Case Study of Unified Payment Interface

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2021, International Journal of Case Studies in Business, IT and Education (IJCSBE)

Purpose: The Indian Banking sector is striving hard to popularise digital payments and has gained momentum after demonetization and digital India initiatives. To facilitate digital payments, “National Payment Corporation of India (NPCI)” launched the “Unified Payment Interface (UPI)”, which is an amazing, revamped, and cost-effective breakthrough for enabling digital payment services for all. Proliferation of smartphones, technological innovations, and effective internet communications has signified the usage of mobile payment facility for smartphone users, financial institutions and particularly the banks. To achieve paperless and cashless economy, Unified Payment Interface (UPI) is a potentially innovative way of transferring funds using a virtual payment address established by the National Payment Corporation of India (NPCI). Hence, it is needed to be assessed for its potential to contribute towards achievement of digital economy. Design/Methodology/Approach: This paper is focused on understanding Unified Payment System’s (UPI) growth and its progression in retail digital payment over the years. The study was carried out by exploring secondary data sources and by applying Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis format. Finding/Result: UPI has shown remarkable growth in last couple of years due to customer’s shift towards contactless payments over other methods. Study revealed that the growth of digital payments has increased significantly, especially in the retail payment sector on the UPI platform. Originality value: This study examines UPI's position in the digital payment ecosystem, with an emphasis on identifying UPI's core strengths and growth prospects, as well as areas for future research to investigate India's complete e-payment ecosystem. Paper type: A research case study on Digital Payment Service in India - A Case Study of Unified Payment Interface

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Srinivas Publication

The Indian payments sector is undergoing far reaching changes, with digital payments capturing a sizable slice of the cake in recent years. The changes began from a fully cash economy to a less-paper-currency system. The Reserve Bank of India and its nodal agencies are working hard to make the digital India goal, a reality. Nearly one billion cards and more than two billion Prepaid Payment Instruments (PPI) such as online wallets, mobile applications, e-wallets, and digital payment modalities have pushed India into one of the world's fastest growing and largest digital payment ecosystem. In fact, an exponential increase in internet infrastructure boosted e-commerce. Unified Payment Interface, popularly known as UPI, is regarded as a revolutionary payment solution in the market for facilitating retail digital payments. The main objective of this paper is to identify innovations in India's digital payment landscape in a phased manner. While doing so, it also analyses the payment facilitating industry by applying PESTEL model to identify political, economic, technological, environmental and legal factors. Design/Methodology/Approach: This study examines India's digital payment landscape in terms of its gradual progress. Using the PESTEL model, it also analyses external factors that contribute to a less cash economy. Secondary sources were used to gather data for the study, which included reports, circulars, rules, and statements made by the Reserve Bank of India and other relevant organisations. Findings/Results: According to the study, India's digital payment segment has seen tremendous success since the implementation of UPI by the National Payment Corporation of India (NPCI) in 2016. The government's Direct Benefit Transfer (DBT) programme enabled the country to achieve financial inclusion of all citizens having access to banking services. Government legislation, regulator intent, social behaviour, increased smartphone usage, lower internet costs, and others significantly impacted the growth of the digital payment industry by ensuring secure, faster, cost-effective, and secure payment solutions. Originality/Value: This study examines the digital payment industry in India using the PESTEL methodology, which allows us to see the industry from all sides.

case study on digital payment in india

India is undergoing a significant transition from a cash-based economy to a cashless or less-cash one. The smartphone and internet adoption paved the way for technological acceptability in many sectors, including money usage. Economic transactions are carried out using an electronic medium. Among the several e-payment options over the last five years, the Unified Payment Interface (UPI) has grown dramatically. Payment is one facet of a country's financial inclusion. The current study intends to provide a thorough evaluation of the literature on digital payments in relation to UPI and financial inclusion. It also examines the factors that influence UPI platform acceptability, continue to use and recommend others to use. Design/Methodology/Approach: A thorough literature study is carried out in order to uncover research literature concentrating on important topics such as digital payment, technology acceptance and usage, digital financial inclusion, and unified payment interface. Using the SWOC and ABCD frameworks, the research need is identified and agendas are reviewed. Findings/Result: According to a survey of the literature, the majority of the research was conducted to evaluate digital payment as a whole. Less study was carried out by concentrating on UPI, especially in relation to the component of digital financial inclusion. The advancement of technology constantly calls for more research. Originality/Value: This is the first study to establish a link between Digital Payment, UPI and Digital Financial inclusion. The policymakers, service providers and researchers can make use of the results to understand and assess the role of UPI in making India a less cash society. Paper Type: Systematic Review of Literature.

Trans stellar Journals

TJPRC Publication

For a long time, the world has been moving toward all things digital. However, the year 2020 highlighted the urgent need to embrace new technologies as soon as possible. With the implementation of the lockdown, this adaptation happened almost instantly, particularly in India for digital payments. The Indian government has been promoting and propagating online payments sharply, beginning with demonetization back in 2016. 'Digital India' has been the spirit of the many economic and financial decisions that pushed Indians to modify online payments. In a country like India, where disparities are sometimes different, ensuring financial equality becomes a problem of prime importance. This study analyses the usage of Digital Payment Applications and the challenges faced by users. The findings show that1/3 of the respondents in the age group 25-35 have been personally impacted by fraud, data theft, etc. There is a need to create awareness about the precautions to be taken so that the users are not victimized due to fraudulent activities.

aparna j varma

Digital transactions are taking over most of the transactions in the world and India is no exception. Various studies have proved that efficient payment system will speed up the liquidity flow of an economy. In the era of digitisation, transactions using technology is the best way of being agile and giving better service to consumers. The study is about understanding consumers' perceptions with respect to online and digital payments and safety of these transactions in this world of connected technologies. It is important for marketers to know the perception of consumers towards cashless methods of transactions and this study helps in this. The study is qualitative in nature and uses literature reviews to analyse the concept of digital transactions. The reviews delve insights into the various challenges and advantages of using digital transactions. The findings reveal that digital transactions are accepted in India and usage is increasing year by year. The study finds the advanta...

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The Digital India program is a distinguished government program undertaken by the Government of India that has an intention of making the country a digital society and a knowledge economy. The slogan and professed role of Digital India is "faceless, paperless and cashless". Different methods of electronic payments are available to promote transactions involving no cash and turn India into a cashless society. These methods include debit/credit cards, Unified Payment Interface (UPI), Aadhaar Enabled Payment System (AEPS), Unstructured Supplementary Service Data (USSD), numerous mobile payment wallets, micro-ATM etc. This study focuses on the attitude, perception of the urban consumers towards various digital payment methods. Responses from 100 respondents of Kolkata have been recorded using purposive sampling method and are analysed using anova.

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India is passing through a window of demographic transition, not only is it converting to a cashless economy but it is also witnessing a drastic makeover in the paradigm of banking sector. With a purpose to transform India into a digitally empowered society and knowledge economy, the "The Digital India Programme" was launched by Government of India, "Faceless, paperless, cashless" is one of the professed roles of digital India. Digitalization without financial inclusion was incomplete hence RBI, in August, 2015, issued banking licenses to, 11 payment banks, 2 universal banks and 10 small finance banks. Therefore, the present study determine how mobile payments options are associated with demographic factors thereby providing us with the sections of our society that have adopted cashless payments or have failed to do so. There should be a great impact of the new immerging payment system UPI. The primary data collected through online mode in odisha and used destructive statistics.

Journal ijmr.net.in(UGC Approved)

In today word mobile users can nowadays use their smartphones to make money transaction or payment by using applications installed in the phones. The last decade has seen tremendous growth in use of internet and mobile phones in India. Electronic consumer transaction made at point of sale (POS) for services and products through internet banking or mobile banking using smartphones or card payments are called as digital payment. This paper provides us a glimpse of the user’s behavior about the use of digital payment, their satisfaction level and impact of age on their use, factors that can affect a consumer’s decision to adopt digital payment. The structured questionnaire will used as a research tool for study the consumer perception of digital payment. Primary data will collected from 100 respondents. The respondents will categorized on the basis of demographics such as age, income level, occupation and gender. This research used quantitative method ANOVA in

Research Paper

Digital revolution in India has brought paradigm shift in the banking system and financial transactions due to online payment. Payment gateways, e-commerce applications and other benefits boost smartphone users towards digital transactions. This study focuses on identifying factors important for customers to use payment banks for transaction. The identified dimensions for the usage of payment banks are; user friendly, convenience, cost effectiveness, security and easy cash management. People look for the aforesaid factors while they transact through payment banks. To validate the factors and check the model fit, a confirmatory factor analysis was run using AMOS. The analysis confirms constructs convergent validity and reliability, and model fit.

Dharmesh K Mishra

The study evaluates India’s technological advancement, which has created a range of opportunities for consumers to enter into digital payment space. Demonetization in India has forced all consumers and companies to embrace and create cashless digital payment platforms. The cashless economy scenario involves various factors for its adoption such as reach, availability and awareness. This study considers factors responsible for adopting new digital payment technologies in India’s different regions across various consumers. The study includes descriptive statistics and variance analysis (ANOVA) to identify elements to achieve maximum satisfaction. The research collects data from 250 respondents living in India, experiencing digital payments and online transactions. The data is collected through a structured questionnaire and critically analyzed using statistical analysis. The data has been analyzed with no sectorial biases and tracked by creating real-time indications. The study uses v...

World Journal of Management and Economics

Sankararaman G

Since 1990, Indian banks have continued to deliver an array of services through various electronic modes such as Automated Teller Machines, digital payments and mobile banking. The Unified Payments Interface (UPI), one of the primary instant real-time payment and settlement system, contributes 48 percent in India's retail clearing and settlement systems. The researchers have made an attempt to study the user's opinion towards different parameters of awareness level, satisfaction level, problems encountered by the users of UPI, and duration to solve the problems. For this purpose, descriptive research design has adopted and 119 samples have collected through structured questionnaire. Convenience sampling technique adopted to collect the samples. Among the 119 respondents, 86 percent of them aware about UPI as a digital payment mode. 31 percent of respondents have chosen the UPI as their first choice among the different digital payment tools. The chi-square analysis revealed that there existed important connotation between age of the respondents and satisfaction level towards the usage of UPI. The results of One-way ANOVA revealed the presence of a momentous transformation among different categories of age cluster of the respondents on frequency of usage of UPI. The researchers have suggested that the regulators have to ensure the cyber security of UPI, and also take necessary measures to increase the adoption of UPI across the nation.

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Digital Payment Service in India - A Case Study of Unified Payment Interface

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India’s Digital Payment Landscape – An Analysis

A performance analysis of indian msmes, a systematic review and research agenda of digital payment system with reference to unified payment interface, consumer perception towards cashless economy with special reference to unified payments interface (upi), journey from electronics to healthcare technology – philips, healthcare product maker, digital payment and banking adoption research in gulf countries: a systematic literature review, swot analysis applications: an integrative literature review, applying swoc analysis to an institution of higher education, a new abcd technique to analyze business models & concepts, the determinants of digital payment systems’ acceptance under cultural orientation differences: the case of uncertainty avoidance, related papers (5), trending questions (3).

UPI payments in India have shown remarkable growth in the retail payment sector, making it a potential facilitator of financial inclusion and digital economy.

Unified Payment Interface (UPI) is an e-payment system in India that allows users to perform various financial transactions using a smartphone.

Unified Payment Interface (UPI) has shown remarkable growth in the retail payment sector, indicating its impact on small retail shops.

Digital Payment Service in India - A Case Study of Unified Payment Interface

Article sidebar, main article content.

Purpose: The Indian Banking sector is striving hard to popularise digital payments and has gained momentum after demonetization and digital India initiatives. To facilitate digital payments, “National Payment Corporation of India (NPCI)” launched the “Unified Payment Interface (UPI)”, which is an amazing, revamped, and cost-effective breakthrough for enabling digital payment services for all. Proliferation of smartphones, technological innovations, and effective internet communications has signified the usage of mobile payment facility for smartphone users, financial institutions and particularly the banks. To achieve paperless and cashless economy, Unified Payment Interface (UPI) is a potentially innovative way of transferring funds using a virtual payment address established by the National Payment Corporation of India (NPCI). Hence, it is needed to be assessed for its potential to contribute towards achievement of digital economy.

Design/Methodology/Approach: This paper is focused on understanding Unified Payment System’s (UPI) growth and its progression in retail digital payment over the years. The study was carried out by exploring secondary data sources and by applying Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis format.

Finding/Result: UPI has shown remarkable growth in last couple of years due to customer’s shift towards contactless payments over other methods. Study revealed that the growth of digital payments has increased significantly, especially in the retail payment sector on the UPI platform.

Originality value: This study examines UPI's position in the digital payment ecosystem, with an emphasis on identifying UPI's core strengths and growth prospects, as well as areas for future research to investigate India's complete e-payment ecosystem.

Paper type: A research case study on Digital Payment Service in India - A Case Study of Unified Payment Interface

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  • Mahesh A. , Ganesh Bhat S. , India’s Digital Payment Landscape – An Analysis , International Journal of Case Studies in Business, IT and Education (IJCSBE): Vol. 6 No. 1 (2022): Volume 6 Issue 1

case study on digital payment in india

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Date received: 23 June 2022

Date accepted: 8 July 2022

Publication date: 30 August 2022

DOI: 10.18231/j.jmra.2022.028

A study on digital payment applications in India

[ ] Gaurav Tyagi [ 1 ]

Designation:

Research Scholar

[ ] Hrishikesh Jagadale [ 1 ]

[ ] Nilesh Anute [ 1 ]

Email: [email protected]

Dept. of Management, ASM'S IBMR, Pune Maharashtra India

This Research Paper is based on the in-depth study of applications that deals with Unified Payment Interface (UPI) in India. It shows how the dynamics are changing in the UPI sector and which companies are leading the table. The study was conducted in Pune Region and the survey was done with the help of questionnaire. A response of 82 respondents has been collected and then accordingly a conclusion is made. The Data for the study was also conducted from secondary sources which eventually helped us to get a fair understanding of the Industry. In today’s world one word is common that is “Digitalisation” and it is also gaining popularity due to increase in use of Smartphone by the people, the same has applied to the financial sector. In India, the Unified Payment Interface (UPI) was launched in the year 2016 by National Payments Corporation of India (NPCI). UPI is a payment server which allows its users to transfer the money on real-time basis from Peer-to-Peer (P2P) or from Personto-Merchant (P2M). It is an application that allows the users to use multiple bank accounts in single application. UPI has become so popular in India, also around world due to its ease of use, security, real-time alerts, etc. In India, UPI is currently in a growth stage and showing a robust growth year-onyear. In this research we will have an in-depth study on 5 major UPI apps in India namely GooglePay, PhonePe, Amazon Pay, Paytm and BHIM.

Introduction

India with the population of over 135 crores, is a huge market for digital payment applications. According to the recent data, TRAI India has almost 114 crores telephone subscribers, 76.58 crores internet users and about 75 crores smartphone users. These numbers are not only standing here but has shown an exponential growth on quarterly as well as yearly basis. India with such a huge population is ranked first in terms of value of transactions through UPI, which is almost 3 times than second one china. The NPCI came into operation in 2008, with sole objective to develop infrastructure in digital payment industry.

What is UPI?

UPI is a system that provides the real time transfer of money from one user to another user. It allows us to transform transfer money between individuals, merchants or anyone who accepts it. The RBI is the regulatory body for digital payments. UPI has been launched on 11 th April 2016, and has its presence in countries like India, Bhutan, Nepal, Malaysia, Singapore and UAE. As per February Data 2022 there are 304 Banks that are active on UPI Portal. The Major features are as follows:

The amount can be transferred immediately just by scanning QR code.

One UPI can give access multiple bank accounts.

It helps us to create Virtual Payment Address and Thus helps us to not share our bank details with any one.

It has s two-factor authentication.

Trends in UPI industry

India has shown a good development in recent decades and currently as of today GDP of $2.62 trillion and expected to reach $5 trillion by 2026. In India, the fintech industry has more adoption rate than any other in the world that is 87% as per MOCI. UPI is the one of major and attractive part in fintech industry and hence make it an attractive investment option. At the time, when UPI wa started the number of Banks live on UPI was just 21, as the industry gained its presence it has 323 Banks live on its portal and shown a CAGR of around 70%. Along with number of banks the one thing that grew almost at same pace was user Base of UPI. Indian UPI transaction crossed $133 billion as of May 2022, Data by NPCI versus 0.10 million when it was launched. The graph below shows the market share of major UPI apps, volume of transactions, Value of transactions and No. of Banks live over the years. 1 , 2

Market share

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Banks live on UPI

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Value of transaction

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No of transaction in millions

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Process of UPI

The user has to first download and register on it.

Once the login they have to register with the Bank Details.

Set M-pin for transactions.

Ready to go.

Review of Literature

Karamjeet Kaur, Dr. Ashutosh Pathak (2015), in their research paper entitled “E-payment system on E-commerce in India” they found that for becoming a successful company in a digital payment industry it majorly depends on the factors like easiness to use, app interface, preferences, viability, accessibility, services and cost.

Zlatko Bezhovski (2016), in their research paper entitled “The Future of Mobile Payments as Electronic Payment System” the study found that the customers using the digital payment applications will go on increasing continuously due to its various benefits and also smartphones becoming the core element of human beings life and stating that the digital payment industry has positive future ahead.

Prof Trilok Nath Shukla (2016), in their research paper entitled “Mobile Wallet: Present and the Future” found that in future digital payments will have a major contribution in shopping experience of customers. Giving only security and easy to use payment system will not be enough to attract customers apart from this wil require to give cashbacks, loyalty programs, etc. The marketers should grab this opportunity by partnering with various digital payment companies to attract to customers.

Rahul Gochhwal (2017 , in their research paper entitled “Unified Payment Interface-An

James Joseph, K.V. Shriram, Lawlyn L.R. Rodrigues, Ashish Oommen Mathew and K.C. Gana (2018), in their research paper entitled "An Empirical Study on Consumer Adoption of Mobile Application in India” they found that easiness of use, services, pervasiveness, cashbacks were major to attract customers, also mobile payments were popular in urban but awareness is needed to spread it in rural areas of country and they also found that older people find it difficult to use digital payment applications.

Priyanka. S. Kotecha (2018), their research paper entitled “An Empirical Study of Mobile Wallets in India” they found that digital payments are main mode of transactions for most of the merchants due to ease of use and convenience and there will be tremendous growth in future of digital payments.

Research Methodology

Research Methodology is used to solve a problem in a systematic manner and find optimal solution, it is a base for every research done. It helps to understand how the research is conducted, how information is collected, how to present it and how to conclude it.

Data Collection Method

Data for the study was collected from primary as well as secondary method.

Primary sources of data collection

The data was this research was collected through Structured Questionnaire which was asked to the respondents. The questionnaire was prepared with google forms.

Secondary sources of data collection

When data is collected from other sources which has been published or released earlier is known as secondary data. Secondary Data helps the researcher to have a better knowledge of the topic and to interpret more accurately. The secondary sources of data for this research was Government websites, Newspapers, Magazines, Other Published Journals, Reports by various companies, etc.

Objectives of the study

To study the importance of digital payment applications in e commerce.

To study the user’s perception about digital payment applications.

To study the opportunities and challenges for digital payment applications.

Data Analysis

The collected was analysed with the help of Ms-Excel and was represented in pie-chart and tabular format. The research problem is found out with the help of data analysis. The Data analysis has two parts one is the comparison of top 5 UPI apps on the basis of market share and other one is about the survey. The total Respondents was 82 for primary data. 3 , 4 , 5

Secondary Data Analysis

PhonePe is a payment application which is used for UPI transactions. Sameer and Rahul who are the founders of PhonPe launched this payment application in 2015. PhonePe can be used in 11 spoken languages in all over India. Mutual funds, Digital Gold, Insurance, etc are the services also provided by PhonePe. One more feature is using this application you can also withdraw money from the PhonePe merchants. PhonePe is successful enough to acquire 50% share, which has 350 million registered users and 20 million overall merchant users. 6

Market share of PhonePe

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Tez pay which is widely known as Google Pay has been developed by one of the biggest company Google Inc was developed in 2017. 42 countries already adopted Google Pay and its global reach is increasing day-by-day. 9 languages are available to use in this application. Google Pay has tied up with ICICI bank to provide loan and to earn on the interest charged. “Toggle” is the feature which is only provided by Google which keeps your transaction history safe even from Google itself. Google Pay with 36% market share is the leader following PhonePe. 220 million are registered and 10 million merchants prefer Google Pay.

Market share of GooglePay

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One97 communication the parent company of Paytm found by Mr. Vijay Sharma in 2010. Digital products like wallet, mobile payment, online shopping, Paytm sound box, etc were introduced in 2014 and marked their presence. In 2015 Paytm launched its own bank after getting license from RBI. 350 million users are registered on Paytm which is the highest among the others and around 60 million bank customers. They recently started Paytm Postpiad which gives service similar to credit card. Paytm earns its revenue through loan they provide and various other services.

Market share of Paytm

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Market share of bhim

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Market share of AmazonPay

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Primary data analysis

Could you prefer cash or upi for daily transactions.

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Which UPI application do you prefer most?

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Which payment application is the best when it comes to offers, rewards and cashbacks?

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Which application does the merchants prefer most?

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Which app has the best interface?

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Why would you adopt online payment option over physical payments?

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Which Application has the frequent server issues, according to you?

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Where do you spend most through UPI Applications?

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What are the different security measures will you take to avoid any kind of UPI frauds?

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I s UPI capable of replacing cash thoroughly?

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Bharat interface for money that BHIM is developed by the regulator itself that is NPCI fully focused on UPI transaction. It made its presence in December 2016 with 12.5 million users registered till date 2017. The application can be used in 20 different languages which allows most of the Indians to use it but it is losing its market share to other payment application. As they are losing their grip in the market they should consider using different marketing strategies to grow.

Amazon pay was introduced by E-commerce company that is Amazon. It has its presence only in 18 countries. 50 million are registered on amazon Pay from India, but it is losing its market share compared to others.

They give good cashbacks and also offer multiple offers but their strategy doesn’t seem to work. They also earn their revenue through interest on loan they give and also through Amazon pay later. Amazon pay interface is complicated to use, improving it or making it simple will help them grow.

Most of the people prefer UPI over cash out of 83 people 73 prefer UPI and only 10 prefer cash. Paying online is more simpler than carrying cash everywhere.

Google Pay 33 followed by PhonePe 31 were the most preferred applications.

Amazon pay is the application which offers most of the cashbacks and offers.

Merchants prefer Paytm as they offer sound box with the QR. This way they can keep track of their income.

Google pay and PhonePe has the best user interface according to the respondents, easy to use interface is mostly preferred.

Respondents prefer online payment over cash because its easy to carry a smart phone than cash, as we can lose the cash.

Google pay was the application with most server issues compared to other applications.

Respondents spend most of their money through UPI on grocery, petrol and bill payments.

Self-awareness, User Education and most of the respondents don’t know how they will protect themselves from UPI frauds.

Respondents believe that UPI payments cannot truly replace cash.

Government is trying to push UPI applications for cash-less economy.

PhonePe is gaining market share from Google Pay, Bhim UPI and Amzon Pay.

Google Pay is losing Market share to Paytm and PhonePe.

Google Pay has more server issues compared to other applications according to study.

BHIM and Amazon Pay are losing their grip in market

The majority of customers were increased during the lockdown period.

Users have trust issues on basis of confidentiality

Users use multiple UPI applications for getting cashbacks, rewards and offers.

In the todays world one word is common that is “ Digitalistaion” similar has been applied on Payment Industry Which has been continuously converting in to digital and is growing rapidly year-on-year. The study was majorly focused on the “Strategic analysis of UPI applications in India”. The study revealed that the user base of UPI apps is increasing due to various benefits such as ease of use, twofactor authentication, no need to carry change was major benefit for the users. The study includes an in-depth study of five major UPI applications that are used in India that is PhonePe, Google pay, Amazon Pay, BHIM UPI and Paytm on the basis of their features, market share and ease to use. The Indian digital payment system is continuously on an uptrend and is expected to remain in uptrend in future due to various benefits. On the basis of market share PhonePe is continuously gaining and has maintained top position followed by Google Pay, Paytm, Amazon Pay and BHIM UPI. The UPI apps took an upward swing during demonetisation and then due to covid lockdown as people were avoiding physical transactions of paper money which lead to exponential growth of industry. A survey was done with a questionnaire where we had 83 respondents. As per our study we concluded that most of the people preferred Online Payments over Cash because carrying cash we also carry the risk of losing it. Our study indicates that UPI has a great future in long term on the basis of respondents.

Source of Funding

Conflict of interest.

K K Pathak E-payment System of E-commerce in India”Int J Eng Res Appl2015527987

Z Bezhovski The Future of Mobile Payments as Electronic Payment SystemEur J Business Manag20168812732

Mobile Wallet: Present and the Future”Int J Multidiscip Acad Res201653139

R Gochhwal Unified Payment Interface-An Advancement in Payment SystemsAm J Indus Business2017710117491

J Joseph K V Shriram L R Lawlyn A O Rodrigues K Mathew An Empirical Study on Consumer Adoption of Mobile Application in IndiaArthshastra Indian J Econ Res201893/436375

S Priyanka An empirical study of wallets in IndiaOnline J Multidiscip sub20186651

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Development Co-operation Report: Development Co-operation Report 2021: Shaping a Just Digital Transformation

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Key messages

Covid-19 digital payment initiatives may lead to greater financial inclusion, remove barriers to financial inclusion, especially for women, invest in systems that build trust, mitigate risk and drive inclusive growth, 28. case study: digital payments enabling financial inclusion.

Digital financial services offer a gateway to financial inclusion, but women face barriers to accessing and using them. Digitising payment of public sector wages and social protection benefits has prompted millions of previously unbanked women to open accounts in recent years, a trend that accelerated during the COVID-19 crisis with the digital payment of emergency relief and private sector wages. As governments and companies take steps to recover from the economic impacts of the pandemic, prioritising women’s digital financial inclusion will ensure stronger, more resilient economies that recognise and advance the strengths of women. Development co-operation providers should share good practices and learnings on responsible digital payments to strengthen data protections and build inclusive digital ecosystems to reach the still substantial numbers of unbanked and underserved households in low- and middle-income countries.

Approximately 1 billion women around the world are currently financially excluded, facing persistent barriers across digital value chains and without equal access to identification and digital devices.

The COVID-19 pandemic accelerated the use of digital payments for emergency and social benefits that were fair, transparent and accountable and protected client data and funds.

To increase women’s digital financial inclusion, development actors should support the collection and analysis of sex-disaggregated data to inform policy, design appropriate and affordable financial products for women, and enforce anti-discrimination and consumer protection laws.

The COVID-19 pandemic introduced tens of millions of people worldwide to digital payments through digital social benefits, digital emergency relief and digital wages. There is now a great opportunity to build on this momentum to broaden financial inclusion, particularly for women, as social benefit payments are one entry point to other financial services. Women face formidable barriers to access and to use digital financial services. Responsible digitisation will help overcome barriers of mistrust and the perception of risk by ensuring that data and funds are protected. Key features of responsible digitisation of payments are providing effective grievance redressal mechanisms with accountability between provider and client, and interoperability across providers with regard to products and services. International actors, including development co-operation providers, can contribute by sharing insights, experience and guidance from their interventions to better reach the still substantial numbers of unbanked and underserved households in low- and middle-income countries.

Digital payment programmes were instrumental in delivering pandemic relief and wages in at least 222 countries and territories during the COVID-19 crisis. A study for the World Bank found that in many instances, digital payment systems were used to disburse social protection benefits quickly and securely (Gentilini et al., 2021[1]) . The impact of these new payments was especially important for women even prior to the pandemic. Between 2014 and 2017, 35 million women opened their first account to receive public sector wage payments and an additional 80 million women opened their first account to collect government social benefits (Demirgüç-Kunt et al., 2018[2]) .The following examples show the continuation of this trend through COVID-19 response payments:

Bangladesh’s government package of support for workers in the ready-made garment sector mandated for the first time that transfers be paid digitally during the lockdown (Chowdhury, 2020[3]) . In just 25 days, approximately 2 million digital accounts were opened for workers to receive their payments (Poutiainen and Rees, 14 May 2021[4]) . Many of the workers, especially women, were first-time users of digital payments. Grievance redress mechanisms designed with leading apparel companies have also helped ensure that payments are made reliably and safely (Better Than Cash Alliance, 2017[5]) .

In just 25 days, approximately 2 million digital accounts were opened for workers to receive their payments.            

Early in the pandemic, Colombia rolled out the Ingreso Solidario (Solidarity Payment) programme. 1 This innovative public-private collaboration transferred emergency relief payments to 2.5 million households affected by the pandemic, 60% of them headed by women (Prieto, 26 October 2020[6]) . Among the financial beneficiaries were 1 million previously unbanked households, reached using an app and helplines to explain and build trust in digital payments. Preliminary data show that people receiving transfers through traditional accounts are more likely to cash out than are those who receive transfers via mobile wallets (81% versus 71%). Further, 22% of recipients via mobile wallets used the account to make deposits, which further highlights the potential for digital transfers to deepen financial inclusion and increase the uptake of e-commerce (Davico-Thaler and Tellez-Merchan, 8 November 2021[7]) .

Building on this experience, the United Nations Children’s Fund, the High Commission for Refugees and the World Food Programme are working with the Colombian government to better understand the needs of the 2.2 million Venezuelan migrants in the country, more than half of whom are women, and the barriers to their digital financial inclusion (Government of Colombia, 2021[8] ; Better Than Cash Alliance, 2021[9]).

Digital payments have well-documented advantages over cash (Better Than Cash Alliance, 2021[10]) :

They are efficient (Better Than Cash Alliance, 2018[11]) .

They offer a transparent method of conducting financial transactions (GAO, 2015[12]) .

They are a key driver of financial inclusion, particularly for women (Better Than Cash Alliance, Women’s World Banking and the World Bank Group, 2020[13]) .

Broadening financial inclusion fosters inclusive growth and development gains (UN, 2018[14]) .

Yet, cash remains the dominant means of payment for more than 1.7 billion people in the world (Demirgüç-Kunt et al., 2018, pp. 35-41[2]) . Indeed, nearly 15% of the adults in developing economies who are paid for agricultural products receive cash payment (World Bank Group, 2017[15]) . While digital payments are an important step towards financial inclusion, it is important to address other barriers to full access to financial systems and products.

For digital payments to increase financial inclusion, they must prioritise reaching the approximately 1 billion women around the world who are currently excluded (Better Than Cash Alliance, Women’s World Banking and the World Bank Group, 2020[13]) . Overcoming the persistent barriers across the digital value chain calls for providing women equal access to identification and digital devices, more appropriate financial products and services, consumer protection for women, and an enabling environment that precludes discrimination and encourages better incorporation of women in the financial and digital labour force (Better Than Cash Alliance, 2021[16]) . To rebuild stronger after COVID-19, the Better Than Cash Alliance (2021[16]) has issued a ten-point call to action to reach financial equality for women. The associated advocacy campaign featured more than 20 Ministers of Finance and chief executive officers committing to one or more of the ten actions to advance women’s digital financial inclusion. The call to action also includes clear and compelling indicators to track progress on each of the actions for reaching financial equality.

The COVID-19 crisis has prompted action to remove barriers and increase payment digitisation. Since the pandemic, 60% of financial authorities worldwide have noted an increase in digital transactions and FinTech is cited by nearly 70% of financial regulators as a priority (ITU, 2021[17]) . Regulators have started to align their COVID-19 measures with efforts to strengthen financial inclusion. For instance, identification requirements for opening an account have been eased and digital payment transfer fees reduced (IMF, 2021[18]) . There are more opportunities to use these emergency payment programmes and the acceleration of digital financial activity as stepping stones to further develop inclusive digital payments ecosystems (Better Than Cash Alliance, 2017[19]) , and the Bangladesh and Colombia programmes discussed above are great examples. These, in turn, have the potential to sustainably increase financial inclusion (Eriksson von Allmen et al., 1 July 2020[20]) as well as to foster inclusive growth (UN, 2018[14]) .

Since the pandemic, 60% of financial authorities worldwide have noted an increase in digital transactions and FinTech is cited by nearly 70% of financial regulators as a priority.            

The pandemic offers important lessons for development co-operation and other actors to spur further financial inclusion. Specifically, it has shown that action on payment digitisation can be taken quickly while incorporating essential safeguards so that digital payments are fair, transparent and accountable and that client data and funds are protected.

Systems also should offer clear avenues for recourse when they fail to provide these protections, as such efforts can break down the distrust on the part of potential users of digital payments. Amader Kotha, the trusted national helpline for Bangladeshi garment workers, is an example. 2 Its success is attributed to responsible practices, including a gender-intentional design to address women’s needs, the early forging of complex but powerful partnerships and the pioneering use of sex-disaggregated data. Distrust was found to be the main reason people in Latin America avoided e-commerce (Mastercard, 2019[21]) . The new United Nations Principles for Responsible Digital Payments 3 aim to ensure that by focusing on user needs and prioritising women, responsible practices will help create trust in digital payments, mitigate risk and drive inclusive growth.

To further promote and advance responsible digital payments systems, development co-operation providers should:

Champion the implementation of responsible and transparent digital payments that are gender intentional by bringing together digital and financial inclusion stakeholders, both public and private, at national, regional and global levels.

Share guidance, good practices and the experience of users on responsible practices. This will require gathering insights from grants and learnings from research on the needs of the financially excluded and underserved.

Immediately invest in better understanding the implications of increased use of artificial intelligence, machine learning and big data. This should inform and spur actions by development partners and providers to avoid discriminatory bias in areas such as coding and marketing (Kelly and Mirpourian, 2021[22] ; UNESCO, 2021[23]) .

Promote all responsible forms of interoperability to drive enrolment and usage at scale so platforms can plug into national payments infrastructure to improve inclusion (Omidyar Network India and Boston Consulting Group, 2021[24] ; Cook, Lennox and Sbeih, 2021[25]) .

Work collaboratively to build a future for women and men that is digital and inclusive and helps achieve all the Sustainable Development Goals.

[9] Better Than Cash Alliance (2021), Improving Humanitarian Payments Through Digital Innovation: Challenges and Opportunities , https://www.betterthancash.org/alliance-reports/improving-humanitarian-payments-through-digital-innovation-challenges-and-opportunities (accessed on 6 October 2021).

[16] Better Than Cash Alliance (2021), Reaching Financial Equality For Women: A 10-point Action Plan for Governments and Businesses to Rebuild Stronger After COVID-19 By Prioritizing Women’s Digital Financial Inclusion , Better Than Cash Alliance, New York, NY, https://www.betterthancash.org/alliance-reports/reaching-financial-equality-for-women (accessed on 6 October 2021).

[10] Better Than Cash Alliance (2021), “Why digital payments”, web page, https://www.betterthancash.org/why-digital-payments (accessed on 6 October 2021).

[11] Better Than Cash Alliance (2018), The Future of Supply Chains: Why Companies are Digitizing Payments , Better Than Cash Alliance, New York, NY, https://www.betterthancash.org/alliance-reports/the-future-of-supply-chains-why-companies-are-digitizing-payments (accessed on 6 October 2021).

[19] Better Than Cash Alliance (2017), Building Inclusive Digital Payments Ecosystems: Guidance Note for Governments , G20 Global Partnership for Financial Inclusion, https://btca-production-site.s3.amazonaws.com/documents/293/english_attachments/GPFI_Guidance_Note_Building_Inclusive_Dig_Payments_Ecosystems_final_0.pdf?1499784653 (accessed on 6 October 2021).

[5] Better Than Cash Alliance (2017), Digitizing Workers’ Payments in the Garment Sector in Bangladesh , Gap Inc. et al., https://btca-production-site.s3.amazonaws.com/documents/433/english_attachments/Corporate_Pager_-_Digitizing_Worker%E2%80%99s_Payments_in_the_Garment_Sector_in_Bangladesh.pdf?1574094194 (accessed on 6 October 2021).

[13] Better Than Cash Alliance, Women’s World Banking and the World Bank Group (2020), Advancing Women’s Digital Financial Inclusion , G20 Global Partnership for Financial Inclusion, https://www.betterthancash.org/explore-resources/advancing-womens-digital-financial-inclusion (accessed on 6 October 2021).

[3] Chowdhury, A. (2020), “Inclusive digital payments solutions for the garment sector workers in Bangladesh”, web page, Business Fights Poverty, https://businessfightspoverty.org/inclusive-digital-payments-solutions-for-the-garment-sector-workers-in-bangladesh (accessed on 6 October 2021).

[25] Cook, W., D. Lennox and S. Sbeih (2021), Building Faster Better: A Guide to Inclusive Instant Payment Systems , Consultative Group to Assist the Poor, Washington, DC, https://www.cgap.org/sites/default/files/publications/2021_01_Technical_Guide_Building_Faster_Better.pdf .

[7] Davico-Thaler, G. and C. Tellez-Merchan (8 November 2021), “Colombia’s Ingreso Solidario: Public-private collaboration in Covid-19 emergency payments response” , Better Than Cash Alliance Blog , https://www.betterthancash.org/news/learning-series-covid-colombia .

[2] Demirgüç-Kunt, A. et al. (2018), The Global Findex Database 2017: Measuring Financial Inclusion and the Fintech Revolution , World Bank, Washington, DC, https://globalfindex.worldbank.org .

[20] Eriksson von Allmen, U. et al. (1 July 2020), “Digital financial inclusion in the times of COVID-19” , IMF Blog , https://blogs.imf.org/2020/07/01/digital-financial-inclusion-in-the-times-of-covid-19 (accessed on 6 October 2021).

[12] GAO (2015), National Park Service: Revenues from Fees and Donations Increased, But Some Enhancements Are Needed to Continue This Trend , Government Accountability Office, Washington, DC, https://www.gao.gov/assets/gao-16-166.pdf .

[1] Gentilini, U. et al. (2021), Social Protection and Jobs Responses to COVID-19: A Real-Time Review of Country Measures , World Bank, Washington, DC, https://openknowledge.worldbank.org/handle/10986/33635 .

[8] Government of Colombia (2021), Nota estadística: Población migrante venezolana en Colombia, un panorama con enfoque de género [Statistical Note: Venezuelan Migrant Population in Colombia – A Gender Perspective Overview] , United Nations Office for the Coordination of Humanitarian Affairs, https://reliefweb.int/report/colombia/nota-estad-stica-poblaci-n-migrante-venezolana-en-colombia-un-panorama-con-enfoque .

[18] IMF (2021), “Policy responses to COVID-19”, web page, https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19 (accessed on 6 October 2021).

[17] ITU (2021), “Has digital finance softened the impact of COVID-19?”, news, International Telecommunication Union, https://www.itu.int/en/myitu/News/2021/07/21/14/14/COVID-19-digital-financial-inclusion-FIGI (accessed on 6 October 2021).

[22] Kelly, S. and M. Mirpourian (2021), Algorithmic Bias, Financial Inclusion, and Gender: A Primer on Opening Up New Credit to Women in Emerging Economies , Women’s World Banking, New York, NY, https://www.womensworldbanking.org/wp-content/uploads/2021/02/2021_Algorithmic_Bias_Report.pdf .

[21] Mastercard (2019), Examining the Latin American and Caribbean E-commerce Market , Mastercard, https://newsroom.mastercard.com/latin-america/files/2019/12/Whitepaper-Digital-Security-mastercard-ENG-simples-FINAL2.pdf .

[24] Omidyar Network India and Boston Consulting Group (2021), Building India’s Digital Highways: The Potential of Open Digital Ecosystems , Omidyar Network India and Boston Consulting Group, https://opendigitalecosystems.net/pdf/ODE-Report.pdf .

[4] Poutiainen, T. and D. Rees (14 May 2021), “How digital payment systems can boost Bangladesh’s push to meet the SDGs” , World Economic Forum: Global Agenda Blog , https://www.weforum.org/agenda/2021/05/bangladesh-ready-made-garments-digital-payment (accessed on 6 October 2021).

[6] Prieto, A. (26 October 2020), “Focus on Colombia: G2P payments in response to COVID-19” , Women’s World Banking Blog , https://www.womensworldbanking.org/insights-and-impact/focus-on-colombia-g2p-payments-in-response-to-covid-19 (accessed on 6 October 2021).

[14] UN (2018), Igniting SDG Progress through Digital Financial Inclusion , United Nations Secretary-General’s Special Advocate for Inclusive Finance for Development, New York, NY, https://btca-production-site.s3.amazonaws.com/documents/346/english_attachments/SDG_Compendium_Digital_Financial_Inclusion_September_2018.pdf?1564162236 (accessed on 6 October 2021).

[23] UNESCO (2021), “Elaboration of a Recommendation on the Ethics of Artificial Intelligence”, web page, https://en.unesco.org/artificial-intelligence/ethics (accessed on 10 November 2021).

[15] World Bank Group (2017), “The Global Findex Database 2017 – Overview”, web page, https://globalfindex.worldbank.org/basic-page-overview (accessed on 6 October 2021).

← 1. For more information, see: https://ingresosolidario.prosperidadsocial.gov.co .

← 2. For more information, see: https://amaderkothahelpline.net .

← 3. For more information, see the United Nations Principles for Responsible Digital Payments at: https://responsiblepayments.org

This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. Extracts from publications may be subject to additional disclaimers, which are set out in the complete version of the publication, available at the link provided.

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Connected to India News I Singapore l UAE l UK l USA l NRI

Singapore’s Money Laundering National Risk Assessment lists digital payments, online gambling among high-risk sectors

case study on digital payment in india

The wealthy nation of Singapore, which saw the last sentencing in an SGD 3 billion money-laundering case in early June, has now released a comprehensive Money Laundering National Risk Assessment (MLNRA) , put together by the Ministry of Finance, the Monetary Authority of Singapore, and the Ministry of Home Affairs.

Released yesterday, the MLNRA identified various avenues of money laundering. It also described the role of Singapore law enforcement agencies (LEAs) in combating money laundering (ML).

While real estate and precious metals and stones, which have long been the instruments of laundering money, remain among high-risk sectors, newer high-risk sectors include digital payment token service services, cross-border money transfer services, and external asset management. Casinos, too, are in this sector.

Chart of money laundering risk sectors

Banking is the highest-risk channel of money laundering in Singapore, as per the assessment. It said: “Most commonly observed ML typologies [are] – (i) Rapid pass-through of funds through bank accounts, (ii) misuse of legal persons such as shell companies, and (iii) placement in high value assets.”

The report presented dozens of case studies, and outlined the work of national LEAs. It said: “Singapore has three key LEAs investigating money laundering – the (i) Singapore Police Force, which includes the Commercial Affairs Department (CAD), and Criminal Investigation Department (CID), (ii) Corrupt Practices Investigation Bureau (CPIB), and (iii) Central Narcotics Bureau (CNB).

“There are also other LEAs in Singapore who are responsible for investigating the predicate crimes, such as Inland Revenue Authority of Singapore (IRAS), Singapore Customs (Customs), National Parks Board (NParks).”

Being an open economy, Singapore is “exposed” to several external threats. The assessment said: “As an international business, financial and trading centre, Singapore is exposed to external threats arising from predicate offences that have a foreign nexus.

“Notably, Singapore LEAs see a high number of ML cases arising from foreign fraud, particularly cyber-enabled fraud. Fraud is also the most frequently cited offence in foreign authorities’ requests to Singapore for assistance, through both the Suspicious Transaction Reporting Office (STRO) and LEAs. It is also increasingly a key crime of concern globally.

“Authorities have observed that fraudulent proceeds are often professionally laundered and facilitated through third parties, such as multiple layers of corporate and individual mules and nominees, as well as through the financial and DNFBP (designated non-financial businesses and professions) sectors. In addition, Singapore’s engagements with other jurisdictions have identified fraud to be the top predicate crime of concern posing an ML threat to Singapore.”

Cyber-enabled fraud within Singapore’s borders is also a top concern, especially as the fraud masterminds are often somewhere outside Singapore jurisdiction and use social media to find their victims.

Malware scammer in custody of Singapore Police

The assessment said: “Over the years, Singapore has also observed an increase in ML threat posed by cyber-enabled fraud committed domestically, orchestrated by syndicates typically located overseas. STRO and LEAs in Singapore note the abuse of mule networks, and the use of nominees in these well-orchestrated arrangements.

“This threat has been exacerbated by advancements in digitalisation, which allow syndicates to broaden their reach to the mass public through the abuse of social media platforms and transcend borders to launder their ill-gotten gains.”

In order to counter this, Singapore worked with INTERPOL and the Egmont Group, a global organisation of financial intelligence units (FIUs) to develop a report on ‘Illicit Financial Flows from Cyber-Enabled Fraud’.

The report was issued by the Financial Action Task Force , the intergovernment organisation that functions as a global money laundering and terrorist financing watchdog.

T Raja Kumar of Singapore

On June 30, 2024, Singapore ends its two-year presidency of FATF, which began on July 1, 2022. The island nation has been represented by T Raja Kumar , an Indian-origin Singaporean who has had senior leadership roles in the Ministry of Home Affairs in Singapore and the Singapore Police Force for over 35 years.

Referring to the recent SGD 3 billion ML case, the assessment said: “Another key ML threat faced by Singapore arises from foreign organised crime, and in particular, illegal online gambling. In the recent money laundering case, which involved over S$3b worth of seized and prohibited assets, several of the accused persons were convicted of laundering proceeds, which were suspected of being the benefits of illegal online gambling from foreign organised criminal groups.”

Giving details of how this SGD 3 billion was laundered, the assessment said: “Some of these monies were held in bank accounts in Singapore. Others were converted into assets such as real estate, cars, handbags and collectibles. Aside from banks, other sectors were involved in the offenders’ management of their assets (for instance, they had engaged CSPs to incorporate companies in Singapore through which they held their assets, purchased properties through real estate salespersons, and placed their funds in other high value goods through precious stones and precious metals dealers).”

Case studies cited in the Money Laundering National Risk Assessment of Singapore

● Case Study 1: Singapore’s assistance in securing the conviction and penalties against Bernie Ecclestone

Singapore was a crucial partner in the conviction of Bernie Ecclestone on 12 October 2023, and the recovery of assets involved in the criminal activity.

The United Kingdom tax authority, His Majesty’s Revenue and Customs (HMRC), had launched a lengthy, complex and worldwide investigation into his tax affairs since more than a decade ago, against Formula One motor racing boss, Bernie Ecclestone. He failed to declare a trust which held assets of more than GBP 416 million.

Former F1 boss Bernie Ecclestone (right) with British racing legend Stirling Moss

Bernie Ecclestone had claimed that he was not the settlor or beneficiary of any offshore trust based on interviews with UK tax investigators in 2015. However, information was proactively shared by Singapore authorities with UK authorities through the FIU and LEA channels to provide crucial support to the UK’s investigations and showed that claims were untrue. The close cooperation between CAD, STRO and the relevant UK authorities is testament to Singapore’ commitment to international cooperation, to achieve effective outcomes in the common fight against transnational crime.

Bernie Ecclestone was eventually sentenced to 17 months in prison, suspended for two years in London, and has made a payment of more than GBP 650 million in relation to his tax affairs, covering tax penalties and civil penalties.

● Case Study 4: ML threats and risks in Singapore’s recent major money laundering case

On 15 August 2023, ten suspects were arrested in a series of simultaneous raids at multiple locations across Singapore. As part of the ongoing investigations, more than SGD 3 billion of suspected illicit financial and physical assets, including cash, cryptocurrencies and luxury goods were seized or prohibited from disposal, in one of Singapore’s largest anti-money laundering operations.

This operation was achieved arising from the close cooperation and coordination of actions among law enforcement, intelligence (including STRO) and supervisors (such as MAS and ACRA).

● Case Study 11: Network of money mules in Singapore used to launder proceeds for foreign syndicates

In late 2021, Singapore was hit by a series of phishing cyber-enabled fraud involving spoofed SMS messages, and in some of the instances, actual and look-alike sender-IDs of local banks were used.

In one of the series, more than SGD 13.7 million was lost, affecting 790 victims. The fraudsters involved are typically part of organised criminal syndicates and run sophisticated transnational operations, which are not easy to detect or dismantle. The syndicates are also well-resourced and adept at using technology to cover their tracks.

Thus far, 121 local bank accounts and 89 overseas accounts have been identified to have received proceeds of the fraud. In one instance, the money mules recruited in Singapore were promised a fixed salary of 3,000 dollars a month, with an additional 600 to 800 dollars for each bank account provided to the syndicates in Telegram chat groups between Dec 2021 and Jan 2022.

ATM

The unauthorised transactions were made to money mules with local bank accounts. Typically, after the funds were received in the local mule’s account, they would be (i) withdrawn in cash via ATM, (ii) transferred to another local bank account, (iii) transferred to overseas accounts, or (iv) used to top up e-wallets. The scam proceeds were eventually transferred out of Singapore to other countries. Nine persons were charged for their involvement in this case.

As of May 2024, seven of them have been convicted of offences under the CMA, Penal Code and CDSA and, depending on their level of involvement, were given sentences ranging from 18 months’ supervised probation and reformative training to 15 months’ imprisonment.

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How Digital Currency Like Bitcoin Levels the Financial Playing Field

case study on digital payment in india

  • June 18, 2024

Embark on a journey into the untold narrative of Bitcoin, a digital currency with the power to reshape the financial landscape.

Explore how Bitcoin transcends boundaries, offering hope to the unbanked worldwide by bridging gaps in access and affordability.

Connect with this link (not currently available in the US) which is an investment education firm linking traders with educational experts, to explore how Bitcoin is making a difference for those without access to traditional banking.

BTC as a Catalyst for Financial Inclusion

Bitcoin, often hailed as a revolutionary force in the realm of finance, stands as a beacon of hope for the unbanked population worldwide.

Its decentralized nature and borderless accessibility have positioned it as a catalyst for financial inclusion, particularly for those marginalized by traditional banking systems.

In its essence, Bitcoin challenges the status quo by offering an alternative means of financial interaction that transcends geographical boundaries and bureaucratic hurdles.

Through digital wallets and mobile technology, Bitcoin opens doors previously closed to the unbanked, enabling them to participate in the global economy with utmost simplicity.

Moreover, Bitcoin’s affordability is a game-changer for the unbanked. Traditional banking services often come with hefty fees and minimum balance requirements, making them inaccessible to many.

Bitcoin, on the other hand, boasts lower transaction costs and facilitates microtransactions, allowing even the smallest financial exchanges to take place seamlessly.

But perhaps the most significant aspect of Bitcoin’s impact on financial inclusion lies in its promotion of trust and transparency.

Peer-to-peer transactions, underpinned by blockchain technology, ensure a level of security and accountability previously unseen in the realm of finance.

This trust factor is paramount for individuals who have been let down by traditional banking institutions or who lack the necessary documentation to access their services.

However, despite its potential, Bitcoin still faces challenges in reaching its full capacity as a tool for financial inclusion.

Regulatory hurdles, volatility, and scalability issues loom large, posing significant obstacles to widespread adoption.

Moreover, education and awareness remain crucial in ensuring that the unbanked population fully understands and embraces Bitcoin as a viable financial solution.

Case Studies: BTC’s Impact on Unbanked Communities

Case study: m-pesa and bitcoin adoption in kenya.

In Kenya, M-Pesa, a mobile phone-based money transfer service, has long been lauded for its role in facilitating financial transactions for the unbanked.

However, Bitcoin, a digital currency, has emerged as a complementary solution, offering lower transaction costs and greater accessibility.

Through platforms like BitPesa, individuals can convert Bitcoin into local currency , enabling seamless cross-border transactions and reducing the reliance on traditional remittance services.

Case Study: Bitcoin’s Role in Zimbabwe’s Economic Crisis

Zimbabwe’s economic instability and hyperinflation have left many without access to traditional banking services.

Bitcoin has emerged as a lifeline for the unbanked, offering a store of value and a means of conducting transactions outside the confines of the traditional financial system.

Platforms like Golix have facilitated Bitcoin adoption, allowing Zimbabweans to safeguard their wealth and engage in commerce despite the challenges posed by the country’s economic woes.

Case Study: Venezuela’s Hyperinflation and the Rise of Bitcoin

In Venezuela, hyperinflation has rendered the national currency virtually worthless, leaving many without access to basic financial services.

Bitcoin has emerged as a viable alternative, offering stability and security in the face of economic uncertainty.

LocalBitcoins, a peer-to-peer Bitcoin exchange , has witnessed a surge in activity as Venezuelans seek refuge from the country’s economic turmoil, highlighting the role of Bitcoin in empowering the unbanked during times of crisis.

Case Study: Bitcoin Adoption in Argentina’s Unstable Economy

Argentina’s volatile economy has long plagued its citizens, many of whom lack access to traditional banking services.

Bitcoin, a digital currency, has emerged as a means of preserving wealth and conducting transactions outside the confines of the traditional financial system.

Platforms like SatoshiTango have facilitated Bitcoin adoption, enabling Argentinians to navigate the complexities of their country’s economic landscape with greater financial autonomy and security.

Case Study: India’s Demonetization and Bitcoin ‘s Emergence

India’s demonetization drive in 2016 left millions without access to cash, highlighting the need for alternative financial solutions.

Bitcoin emerged as a viable option, offering individuals a means of conducting transactions without relying on physical currency.

Platforms like Unocoin and ZebPay saw a surge in users as Indians sought refuge from the cash crunch, underscoring the role of Bitcoin in providing financial access to the unbanked during times of crisis.

Case Study: Bitcoin’s Role in Financial Inclusion in Southeast Asia

In Southeast Asia, where many individuals lack access to traditional banking services, Bitcoin has emerged as a tool for financial inclusion.

Platforms like Coins.ph in the Philippines and Bitkub in Thailand have facilitated Bitcoin adoption, offering individuals a means of conducting transactions and accessing financial services with utmost simplicity.

As Southeast Asia’s digital economy continues to grow, Bitcoin stands poised to play a pivotal role in empowering the region’s unbanked population and driving economic development.

Digital Currency Revolution: Bitcoin’s Role in Creating an Inclusive Financial Future

At the heart of the financial revolution, Bitcoin stands as a beacon of inclusion and empowerment.

As we navigate the complexities of the ever-evolving financial realm, Bitcoin unveils opportunities for the unbanked, paving the way toward a more equitable and accessible future.

Disclaimer: The content provided in this post is for informational purposes only and does not constitute financial advice. Readers are encouraged to conduct their own research and consult with a qualified financial advisor before making any investment decisions.

case study on digital payment in india

About Author / JR Dominguez

JR Dominguez is the technology, finance and music editor for MiLLENNiAL. When he's not writing, you can find him day-trading stocks, playing video games, or composing commercial scores.

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India’s Digital Payment Landscape – An Analysis

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Exhibits the Evolution of Digi-Payment in India

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case study on digital payment in india

Digital News Report 2024

case study on digital payment in india

This year's report reveals new findings about the consumption of online news globally. It is based on a YouGov survey of more than 95,000 people in 47 countries representing half of the world's population.

The report looks at the growing importance of platforms in news consumption and production, including more visual and video-led social media such as TikTok, Instagram and YouTube. It explores audience attitudes towards the use of AI in news, the role of creators and news influencers, how much people pay for news and more. | Start reading

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Methodology

case study on digital payment in india

Read the executive summary

A 'platform reset' is changing how audiences interact with news, while news avoidance and concerns around misinformation have both grown since last year, writes lead author Nic Newman.

How audiences think about trust in news

By Rasmus Nielsen and Richard Fletcher

Public attitudes about AI and journalism

By Amy Ross Arguedas

How audiences think about user needs

By Richard Fletcher

How much do people pay for news? And what might encourage more people to pay?

By Craig T. Robertson

What do we know about the rise of news influencers?

By Nic Newman

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Hungary and Greece . Only 23% trust most news most of the time in these countries, the lowest figures in our sample.

Spain . The percentage of people that feels worn out by the news agenda has gone from 26% in 2019 to 44% in 2024.

Thailand (39%) and Kenya (36%) are the countries in our sample with the highest percentages of TikTok use for news. 

Argentina . Interest in news has fallen 32 points since 2017. Up to 45% of Argentinians avoid the news.

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    Case studies cited in the Money Laundering National Risk Assessment of Singapore Case Study 1: Singapore's assistance in securing the conviction and penalties against Bernie Ecclestone. Singapore was a crucial partner in the conviction of Bernie Ecclestone on 12 October 2023, and the recovery of assets involved in the criminal activity.

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    Case Study: India's Demonetization and Bitcoin's Emergence. India's demonetization drive in 2016 left millions without access to cash, highlighting the need for alternative financial solutions. Bitcoin emerged as a viable option, offering individuals a means of conducting transactions without relying on physical currency.

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    Findings/Results: According to the study, India's digital payment segment has seen tremendous success since the implementation of UPI by the National Payment Corporation of India (NPCI) in 2016.

  28. Digital News Report 2024

    The report looks at the growing importance of platforms in news consumption and production, including more visual and video-led social media such as TikTok, Instagram and YouTube. It explores audience attitudes towards the use of AI in news, the role of creators and news influencers, how much people pay for news and more. | Start reading