DIGITAL PAYMENT

ABSTRACT

Mobile payment (also referred to as mobile money, mobile money

transfer, and mobile wallet) generally refers to payment services operated
under financial regulation and performed from or via a mobile device.
Instead of paying with cash, cheque (or check), or credit cards, a
consumer can use a mobile phone to pay for a wide range of services
and digital or hard goods. Although the concept of using non-coin-
based currency systems has a long history, it is only recently that the
technology to support such systems has become widely available.

Mobile payment is being adopted all over the world in different ways. The
mobile payment market for goods and services, excluding contactless
payments using near field communication (NFC) and money transfers, is
expected to exceed. Investment on mobile money services is expected to
grow by 22.2% during the next two years across the globe. It will result in
revenue share of mobile money reaching up to 9% by 2018. Asia and Africa
will observe significant growth for mobile money with technological
innovation and focus on interoperability emerging as prominent trends by
2018. In developing countries mobile payment solutions have been
deployed as a means of extending financial services to the community
known as the "unbanked" or "underbanked," which is estimated to be as
much as 50% of the world's adult population, according to Financial
Access' 2009 Report "Half the World is Unbanked". These payment
networks are often used for micropayments.
A system that securely stores users' payment information and passwords for
numerous payment methods and websites. By using a digital wallet, users
can complete purchases easily and quickly with near-field communications
technology. They can also create stronger passwords without worrying
about whether they will be able to remember them later. Digital
wallets can be used in conjunction with mobile payment systems that

1
allow customers to pay for purchases with their smart phones. They can
also be used to store loyalty card information and digital coupons. Also
known as an e-wallet.
Today, banks, MNOs, and merchants are all competing in this fast-evolving
space, and to have an edge over competitors, they need to have a futuristic
mobile wallet capability, whether a proprietary or branded wallet, that suits
their strategy and consumer value proposition.

2
 INDEX
[Link] TOPIC PAGE NUMBER
INTRODUCTION 1
1.1 Background of the study
2-4
1.2 objectives. 5
1.3 Scope of the study 6
CHAPTER 1 1.4 significanc Limitation Of Studye of the 6
study.

LITRATURE REVIEW 7
CHAPTER-2 2.1 Summary and critical evaluation of
8-9
previous research on the topic

RESEARCH METHODOLOGY 10

3.1 Data collection methods 11

CHAPTER 3 (primary/secondary).

3.2 Sampling techniques and analytical 11

tools.

3.3 Limitation Of Study 12

DATA ANALYSIS AND 13

INTERPRETATION
14
CHAPTER 4
4.1 Presentation of collected data. 14-19
4.2 Analysis and interpretation of results.

FINDINGS AND DISCUSSION 20

21
CHAPTER 5 5.1 Summary of key findings.

CONCLUSIONS AND 22
RECOMMENDATIONS
CHAPTER 6
23
6.1 Final conclusions based on the
research findings.
24
6.2 Practical recommendations and
suggestions for future research

3
 Bibliography

QUESTIONNAIRE 26-27

4
 CHAPTER- 1

INTRODUCTION

1
1.1 BACKGROUND OF THE STUDY:

The twenty-first century is characterized by the use of information

technology which has revolutionized not only our working patterns but our
style of living also. In this new era DIGITAL WALLET has come into
existence, where customers can perform their financial transactions
electronically over the internet through their mobile phones at a time
convenient and suitable to them, without using cash, in this manner they
can save their precious time and utilize in other crucial tasks. Digital Wallet
is a medium of online payment platform and as a strategic tool for business
development has gained wide acceptance internationally and is progressing
in India as more and more companies are entering the fray. India can be
said to be on the threshold of a major digital revolution with online
payment having already been unveiled. Online payment is defined as “the
provision of retail and small value banking products and services
through electronic channels.
With the emergence of e-commerce and online purchases, the form required
for the payment system also required to change, forcing it to go digital. An
indicative progress path is shown in the graph. Thus we migrated from
cash payments (which required us to carry our leather /cloth wallet
loaded with cash at all times that made it theft prone) to plastic card
payments (debit / credit card based system which avoided the use of
carrying liquid cash and gave us the freedom to withdraw money / make
payments or transfers or remittances from all locations across the globe
where the card could be machine-read) and now to contactless payments
made over digital channels, either from dematerialized cards held on
digital wallets or in the cloud, or from new digital payment mechanisms.
Since the scenario is still evolving a wide variety of names are used inter-
changingly for such transactions such as e-money, digital money, micro-
payments etc. The terminology as well as the technology for operation of
the wallet is still evolving.

Only those companies incorporated in India and have a minimum paid-up

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capital of Rs. 500 lakh and minimum positive net worth of Rs. 100 lakh at
all the times are permitted to issue wallets in India.

In India, Banks who comply with the eligibility criteria are permitted to
issue all categories of wallets.
Persons authorized under Foreign Exchange Management Act (FEMA) can
issue foreign exchange wallets and where such persons issue such instruments
as participants of payment systems authorized by the Reserve Bank of India,
they are exempt from the purview of strict guidelines related to pre-paid
instruments.

RBI has recently given permission to certain entities to open payments

banks and small finance banks. The basic idea is to further the process of
financial inclusion. These banks in the coming years are expected to make
a remarkable change in online transactions by popularizing mobile
payments through e-wallets in rural areas.

Government of India has adopted the stand that promotion of payments

through cards and digital means will be instrumental in reducing tax
avoidance, migration of Government payments and collections to cashless
mode, discourage transactions in cash by providing access to financial
payment services to the citizens to conduct transactions through card/
digital means and shifting payment ecosystem from cash dominated to
non-cash/less cash payments. On 24 February 2016 Government
suggested certain proposals for the promotion of payments through digital
means. The essential features of the proposals for promotion of payments
through cards and digital means include steps for withdrawal of
surcharge/service charge/ convenience fee on card/ digital payments
currently imposed by various Government Departments/organisations and
introduction of appropriate acceptance infrastructure in Government
Departments/ organisations; rationalization of Merchant Discount Rate
(MDR) on card transactions and a differentiated MDR framework for
some key transaction segments; mandating payments beyond a

3
prescribed threshold only in card/ digital mode; introduction of formulae
linked acceptance infrastructure by the stakeholders of certain card products;
rationalisation of telecom service charges for digital financial transactions;
promotion of mobile banking; and creation of necessary assurance
mechanisms for quick resolution of fraudulent transactions and review the
payments ecosystem in the country.

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[Link] OF THE STUDY

Following objectives are set for study:-

1. To study concepts of digital wallet.

2. To study advantages and disadvantages of digital wallet.
3. To study the comparison of growth and rising competition between
different digital payment platforms like PAYTM, PAYPAL,
FREECHARGE, MOBIKWIK, BHIM APP.
4. To study the subject and make people aware about how digital wallet and
payment system work.
5. To study and categorize the class of people who are aware and do use the
digital mode of payment.

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 1.3. Scope of the Study

This study focuses on analyzing the emergence and adoption of digital wallets in
India, particularly after the demonetization policy in 2016 and the subsequent growth
in digital infrastructure. It examines the key drivers influencing consumer behavior,
the role of government initiatives like Digital India, and the competitive landscape
among major digital wallet providers such as Paytm, PhonePe, Google Pay, and
others.
The research targets urban and semi-urban users, primarily in the age group of 18–45,
and is limited to the period from 2016 to 2024. While the study discusses
technological, economic, and behavioral factors, it does not cover in-depth technical
aspects of digital wallet security protocols.

1.4. Significance of the Study

This study is significant as it sheds light on the transformative shift in the Indian
payment ecosystem from cash-based transactions to digital modes. Understanding the
factors contributing to the growth of digital wallets helps stakeholders—such as
fintech companies, policymakers, and financial institutions—enhance user experience,
bridge digital divides, and promote financial inclusion.
Additionally, the study contributes to the broader academic discussion on digital
finance in emerging economies and provides insights into consumer trust, adoption
challenges, and the future trajectory of digital payments in India.

6
 CHAPTER-2

LITRATURE REVIEW

7
2.1. Summary and critical evaluation of previous research on the
topic.
Sanghita Roy, Dr. Indrajit Sinha (2014)
It stated that E- payment system in India has shown tremendous growth, but still there
has lot to be done to increase its usage. Still 90% of the transactions are cash based.
Technology Acceptance Model used for the purpose of study. They found Innovation,
incentive; customer convenience and legal framework are the four factors which
contribute to strengthen the E- payment system.
Dahlberg et al., (2007)
The aim of this research was to build on the literature review that was conducted by
Dahlberg et al., (2007) as their review of m-payment literature spanned from 1999 to
2006 and it continues to be a highly cited paper. Similar to Dahlberg et al., (2007),
papers were broadly classified against the contingency theory which was used as part
of the framework in their review of literature.
Dibbern et al., (2004); Finney and Corbett, (2007); Dezdar and Sulaiman, (2009);
Okoli and
Schabram, (2010)
Review was carried out to determine the current state of m-payments and future
directions for research. A multi-phase approach to the literature review process was
adopted, following established procedures and criteria adopted by other scholars in
the IS field).
Rakesh H M & Ramya T J (2014)
In their research paper titled A Study on Factors Influencing Consumer Adoption of
Internet Banking in India tried to examine the factors that influence internet banking
adoption. It is found that internet banking is influenced by its perceived reliability,
Perceived ease of use and Perceived usefulness. In the process of internet banking
services expert should emphasize the benefits its adoption provides and awareness can
also be improved to attract consumers’ attention to internet banking services.
Au and Kauffman, (2008); Ondrus et al., (2005)
The contingency theory of technology adoption emphasises the importance of
environmental influences such as cultural, social and economic factors, which in turn
impact consumer and merchant adoption. The contingency theory is useful for the
classification of m-payment research as m-payment services differ in each country

8
due to differences in payment technology infrastructure, regulation, laws, or habits
(ibid). For example, the M-Pesa system in Kenya uses SMS technology while other
m-payment systems use technologies such as QR code or NFC technology, depending
on the regulations of the host country.
The contingency theory of adoption suggests that there is no ‘best’ model for
successful innovation around m-payment systems.
Ginsberg and Venkatraman, (1985) ; Dahlberg et al., (2007)
The underlying assumption of the contingency theory is that there is no single best
way to organise and that any one way of organising is not equally effective under all
conditions. Three categories were identified using the contingency theory lens: 1)
legal, regulatory and standardisation, 2) technology, security and payment
architectures and 3) social, cultural and economic.
Papers that addressed a number of these categories but none in-depth were classified
as multiple categories.
Using these four categories and the categories of stakeholders in an m-payment
ecosystem, a 7x4 matrix was created to classify the papers in the review of the m-
payments literature.
Nitsure (2014)
In his paper observed that the problem being faced by developing countries like India
in the adoption of E-banking initiatives due to low dissemination of Information
Technology. The paper highlighted the problems such as security concerns, rules,
regulation and management. In India there is a major risk of the emergence of a
digital split as the poor are excluded from the internet and so from the financial
system.
Slozko & Pello, (2015)
E-payment systems are important mechanisms used by individual and organizations
as a secured and convenient way of making payments over the internet and at the
same time a gateway to technological advancement in the field of world economy.

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 CHAPTER-3
RESEARCH METHODOLOGY

10
3.1. Data collection methods (primary/secondary).
Following are the methods of sources of data:
Primary Data:
Questionnaire was used to collect primary data from respondents. The
questionnaire was structured type and contained questions relating to different
dimensions of digital wallet preferences among service class such as level of usage,
factors influencing the usage of online payment, benefits accruing to the users of
digital payment, problems encountered. An attempt was also made to elicit reasons
for its non-usage. The questions included in the questionnaire were open-ended,
dichotomous and offering multiple choices.
Secondary Data:
Articles on Digital Wallet taken from journals, magazines published from time to time
and through internet.

DATA SOURCE:
Data has been collected from sources like [Link],
[Link]. Primary as well as secondary data has
been collected and utilized for the project.

3.2. Sampling techniques and analytical tools.

APPLICATION OF STATISTICAL DATA:

Various aspects have been depicted with the help of various statistical
tools like pie charts, tabular representation of data, etc. to give a better
presentation of the matter.

TOOLS USED:

Tabulisation of data with the help of MS-OFFICE EXCEL.

Various statistical tools and techniques have been used to collect data
and thereafter the analysis of data. For e.g. Pie charts, Bar diagrams,
picturisation, Graphs etc.

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3.3. Limitations Of The Study:

1. As the time was less, so, not many companies were included in the
parameter.

2. An analysis on only five payment platforms does not necessarily

reflect the true scenario of digital wallet in India.
3. This study only provides online payment information about only
one particular city (Kolkata) of India.
4. Dependability on technology.

5. Security and privacy issue.

12
 CHAPTER 4
DATA ANALYSIS AND INTERPRETATION

13
4.1. SAMPLE

We get 120 respondents coming from several walks of life from different areas in
Bhubaneswar region in the age group ranging from 14-50 years. It is observed that
most of the respondents are students and the sex ratio is almost same that of male
and female.

4.2. ANALYSIS OF THE DATA:

Q.1 AGE GROUP?

Findings

RESPONSE [Link] RESPONDENTS

14-30 32
31-50 18

14-30

Fig.1
DATA INTERPRETATION
Data was collected by dividing the age between two groups. A younger generation
between ages 14-30 who have more knowledge about the use of technology and
old age group 31-50 who are less inclined towards technology.
Q.2 GENDER?
Findings
RESPONSE [Link] RESPONDENTS
MALE 92

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 FEMALE 28

fig.2

DATA INTERPRETATION
As per the questionnaire male respondents are higher than the female respondents.

Q.3 EDUCATION?
Findings
RESPONSE [Link] RESPONDENTS
PASSED SCHOOL 64
GRADUATE 24
POST GRADUATE 20
MORE 12

Fig.3

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DATA INTERPRETATION
It was witnessed that majority of the users had just passed school which
would make it difficult for them to get used to the idea on mobile payment and
properly understanding the mechanism of digital wallets. People with higher
qualifications were easily convinced about the efficiency of online payment.

Q.4 WHAT IS THE MAJOR BARRIER OF NOT USING DIGITAL PAYMENT?

MAJOR BARRIERS
Findings MAJOR BARRIERS

RESPONSE DIFFICULT
[Link] TO USE
RESPONDENTS
DIFFICULT TO USE
NOT COMPATIBLE
DIFFICULT TO USE 20
NOT COMPATIBLE
LOW PRIVACY
NOT COMPATIBLE WITH MOBILE LOW PRIVACY26
UNRELIABLE SERVICE
DEVICE UNRELIABLE SERVICE

LOW PRIVACY 20
UNRELIABLE SERVICE 54

FIG.4

DATA INTERPRETATION
As per the questionnaire majority of the people found digital wallet
difficult to use. Many people in old age group were not compatible
with using smart phones and hence could not use digital wallet. People

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 also raised doubts on the privacy of such payment method as they were
of aware of cyber crimes like hacking. People who checked unreliable
service said that in case of an emergency if the data connection is slow
or lost no payment can be made. Some people did not find any of these
reasons as major barriers and did not select any option.

Q.5 HAVE YOU EVER USED MOBILE PAYMENT PLATFORM BEFORE?

Findings
RESPONS [Link] RESPONDENTS
E
YES 36
NO 14

USED BEFORE

YES
NO

FIG-5
DATA INTERPRETATION:

It is witnessed that majority of people have used at least one type of

mobile payment app before. And some of the respondents have never
used this method of payment.

Q.6 WHAT MOBILE PAYMENT APPS HAVE YOU USED BEFORE?

Findings

RESPONSE [Link] RESPONDENTS

17
 PAYTM 31
PAYPAL 6
FREECHARGE 16
BHIM APP 2
MOBIKWIK 12

MOBILE PAYMENT APPS

PAYTM
PAYPAL
FREECHARGE
BHIM APP
MOBIKWIK

Fig.6
DATA INTERPRETATION
In comparison between most popular apps majority of the people
have used Paytm followed by Freecharge, Mobikwik, PayPal and
Bhim app. Many users have used more than one app and have
selected more than one option in the questionnaire as per their
preference.
Q.7 WHAT METHOD OF PAYMENT DO YOU PREFER?

Findings
RESPONSE [Link] RESPONDENTS
CASH 72
CREDIT/ DEBIT CARD 22
DIGITAL WALLET 26

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 PAYMENT PREFERNCE

CASH

Fig.7
DATA INTERPRETATION
As per the questionnaire majority of the respondents preferred cash as the
most suitable option for payment, followed by digital wallet and
debit/credit card. People still have doubts about the safety issues with
digital payments and find it convenient to use cash over other methods.

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 CHAPTER 5:
FINDINGS AND DISCUSSION

20
5.1 FINDINGS

 It is clear that mobile wallet will alter the other modes of online payment in
future

 The users of mobile wallet are much satisfied on its usage

 Factors like brand loyalty, convenience of shopping plays an

important role in adoption of mobile wallet
 Security and safety of funds plays a challenging factor for the users.

 24*7 Business Hours is the main benefit which online banking

users have seen among other options.
 This study revealed that most of the users claim that they are aware of
the security threats and they took recommended steps to secure the
digital mode of banking.
 Most of the respondents are either H.S passed or Graduates.

 Maximum number of respondents has internet access on the mobile

phones and is active for the use of digital wallets.
 People do prefer cash payments to other alternatives. Secondly
inclined towards digital wallets due to certain security issues.
 14 out of 50 respondents have not used or came across any kind of
digital wallet yet. While remaining 36, frequently or rarely make use
of the different digital wallets available in India.
 The willingness to use the services is very high if the problems are
addressed.

 Most of the respondents prefer using Paytm for other services followed by
other wallets

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 CHAPTER -6
CONCLUSIONS AND RECOMMENDATIONS

22
6.1 CONCLUSIONS

While Mobile Wallet solutions have the potential of being the next big
payment alternative, standardization in the mobile industry needs to occur
to usher in mass adoption. With numerous digital wallets options available
and no clear leader, retailers are uncertain on what approach to pursue and
customers are confused on what option is best for them. Moreover, based
on a recent study conducted by com Source, only 51 percent of the
responding consumers have ever heard of a digital payment service other
than PayPal and only 12 percent of consumers have ever used one. Mobile
payments are clearly still an emerging capability. However, adoption is
rapidly increasing, and it is time to begin thinking about your Mobile
Wallet strategy, and, perhaps it is even time to start fully defining it. Like
ATMs, debit cards, and ecommerce shopping before them, Mobile Wallets
are coming and they will redefine the retail experience. Those who avoid
this reality risk being overcome by events rather than shaping them.
In brief, the conclusion is that, in view of the technology the world cannot be
divided according to the development status of developed and developing
countries. Just on the contrary, modernization of the economy through transfer
and adaptation even of the most developed technology help ultimately
expediting the economic progress and removing the development gap between
developed and under developed countries. Thus online payment or e-wallet is
an important tool for the financial growth of any developing economy.

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6.2. Suggestion And Recommendation

Digital payment is a great new way of performing everything that we do.

Although some people don’t have an online payment account because they
think that it is too vulnerable for fraud and theft. I think it’s a great new easy
and simple way to
 Pay bills

 Switch money from one account to the other

 Doing all of the other things people do with cash and plastic
money in the comfort of their own home

Online payment platform offers us the ease and comfort of payment whenever
and wherever it is most convenient for us. We can access our account to
monitor and control activity with accurate, up-to-date information whether we
are at home, work, or out of town. Online payment gives us direct access to
our money 24 hours a day, 365 days a year.
Because we know security and privacy of personal information are very
important to our customers, online payment platform allows you to select a
unique password of your choice. All messages are encrypted and "firewall"
technology prevents others from gaining unauthorized access to our details.
I hope that we have learnt something new about digital payment from all of
the things I have written about.

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 Bibliography
Journals

Balan, R.K., Ramasubbu, N., Prakobphol, K., Christin, N. & Hong, J. (2009).
mFerio: the design and evaluation of a peer-to-peer mobile payment system.
Proceedings of The 7th Annual International Conference on Mobile Systems,
Applications and Services (MobiSys), 1–[Link] News. (2011). Visa pitches
‘digital wallet’. Retrieved on May 13, [Link], D., Roh, J., Kim, S. & Jin, S.
(2009). Identity Data Security System for the Digital Identity Wallet.
International Conference on Advanced Communication Technology, 3, 1678–
1681. This technical paper provides a look at the digital wallet work being
done by researchers in South Korea.

WEBSITES

 [Link]

 [Link]

 [Link]/wallet/[Link]#tab=faq-card

 "Google Wallet".

25
 APPENDIX
Questionnaire
Name: Age:

Sex: Locality:

Q.1 Are you aware regarding the functionality of E-wallets?

i) Fully aware ( ) ii) Partially aware ( ) iii) Not aware ( )

Q.2 Where did u get information about E-wallets?

i) Social media ( ) ii) Friends ( ) iii) Magazine/Television ( )

Q.3 Do you use E-wallet for financial transactions?

i) Yes ( ) ii) No ( )

Q.4 Why do you prefer E-wallet over other modes of payments ?

i) Time saving ( ) ii) Ease of use ( ) iii) Security ( )

Q.5 Which E-Wallet do you prefer most of the time?

i) Paytm ( ) ii) Mobikwik ( ) iii) Freecharge ( ) iv) Bhim

UPI ( )

Q.6 What is your purpose for using digital wallet?

i) Money transfer ( ) ii) Utility or bill payment ( ) iii) Recharge ( ) iv)

All of the above ( )

Q.7 What do you keep in mind when you use digital wallets ?

i) Premium offers ( ) ii) Available discount ( ) iii)

Cashback ( )

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Q.8 How many times have you used digital wallets?

i) Frequently ( ) ii) Never ( ) iii) Occasionally ( )

Q.9 How do you consider using digital wallets against other sorts of payment
methods?

i) Supportive instrument ( ) ii) Substitute ( ) iii)

Alternate choice ( )
Q.10 Which device do you use for making payments via digital wallets?

i) Computer ( ) ii) Mobile ( ) iii) Both ( )

Q.11 How do you rate digital wallet service that you have used?

i) Satisfied ( ) ii) Unsatisfied ( ) iii) Neutral ( )

Q.12 Are there any obstacles that you face while using digital mode ?

i) Yes ( ) ii) No ( )
Q.13 Would you want to continue using E-wallets?

i) Likely ( ) ii) Unlikely ( ) iii) Neutral ( )

Q.14 Does digital wallets promote cashless payment to the next level ?

i)Agree ( ) ii) Disagree ( )

Q.15 How much money do you add in your digital wallet on a monthly basis ?

i) Less than 5,000 ( ) ii) 5,000-10,000 ( ) iii)10,000 & above ( ) iv)

None ( )

27