Minor Research Project FINAL

INTERNATIONAL INSTITUTE OF PROFESSIONAL STUDIES,
DEVI AHILYA VISHWAVIDHYALAYA, INDORE
MINOR RESEARCH PROJECT ON
AN EVALUATION OF THE PERCEPTION OF INDIAN CONSUMERS ON

ADOPTING CASHLESS TRANSACTIONS : AN EMPIRICAL STUDY
Submitted in fulfillment of the requirements of the Master of Business Administration

(Management Science) (5 Years)
2017-2018
PROJECT MENTOR: SUBMITTED BY:
Dr. Kapil Jain Purnika Kaul
IM2K14-88
MBA (MS) 5Yrs.
VIII SEMESTER
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DECLARATION
I hereby declare that the project titled “An evaluation of the perception of Indian consumers on adopting
cashless transactions” is my original work and I am the person involved into process of carrying out this
task. Also, I have followed the guidelines as set out by the institute. I have completed and submitted the
synopsis for the same.
I have not violated the copyright norms of any of the publisher and if any act of ours, unknowingly, has
lead to such violation would be my liability. If anything in this project is found copied, I will be solely
responsible for that, and my supervisor Dr. Kapil Jain will not be responsible in anyway. I would also
want to mention that this project is not submitted anywhere else other that in International Institute of
Professional Studies (IIPS), DAVV, Indore [M.P].
Date: May 15, 2018 Purnika Kaul
Place: Indore MBA-MS (5 years)
VIII Semester
IM-2K14-88
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CERTIFICATE
This to certify that Ms. Purnika Kaul student of MBA(MS) 5 Years, VIII Semester at International
Institute of Professional Studies, Indore has undertaken a Minor Research Project entitled “An
Evaluation of perception of Indian consumers on adopting cashless transactions ” under my
guidance and supervision for the fulfilment of the requirement of the degree of MBA(MS) (5 years).
The work has been carried out to my satisfaction and she has given exhaustive information regarding
project work. Her efforts to complete this project are more than satisfactory.
Dr. Kapil Jain Place: Indore
Assistant Professor Date: 15 May, 2018
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ACKNOWLEDGEMENT
I, Purnika Kaul, express my deep gratitude to Dr. Kapil Jain, my mentor for his utmost care, guidance,
help and cooperation which made me competent enough to write this project. I am highly indebted to Dr.
Kapil Jain for his constant supervision as well as for providing necessary information regarding the
project and also for his support in completing the project.
I am also thankful to all the teachers till date and all the known and unknown persons specially my
friends who provided proper views and feedback during the project. Last but not the least I pay deep
regards to my parents and gratitude to God, without whom I might not have been able to complete this
research project.
Purnika Kaul
IM- 2K14-88
MBA-MS 5 Years
Semester VIII
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LIST OF CONTENTS
S.NO PARTICULARS PAGE NUMBER

1 Declaration 2
2 Certificate 3
3 Acknowledgement 4
4 List of Contents 5
5 Abstract 6
6 Introduction 7 – 17
7 Literature Review 18 - 28
8 Research Methodology 29 – 33
9 Data Analysis and 34 - 47
Interpretation
10 Conclusion 48
11 References 49
12 Appendix 50 - 55
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ABSTRACT
The main objective of the study is to evaluate the main contributing factors towards the adoption of
cashless payment modes in India and formulate an empirical study to validate a model explaining the
variables. The model is developed to propound the perception of consumers about different types of
cashless payment modes. The study explains eight constructs, namely, Perceived ease of use, perceived
usefulness, behavioural intention, trust, innovativeness, subjective norms, perceived enjoyment and
functionality. The proposed model used questionnaires and survey method with a sample of 101
respondents in Indore and nearby districts. Factor Analysis was performed with total variability of
67.497% between four major constructs. The four main components assessing the inter dependence with
the variables are usefulness and ease of use, innovativeness and subjective norms, behavioural intention
and trust. The results obtained will help of research has helped us to formulate strategies which can be
used by the service providers to bring conclusive growth in the use of cashless payment services. The
research also provides scope for further use in other researches based on cashless payment system.
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1. INTRODUCTION
1.1 BACKGROUND
The Indian economy has traditionally been dominated by cash over a long period of time. Cashless
transactions have been adopted by many people across the country since the BJP government has come
into existence. The country faced a huge revolution when the Prime Minister Narendra Modi
demonetized India’s high denominated currencies. Onlookers believed that the initiative was to tackle the
black money freely-flowing in the economy, but the economists predicted the narrative of converting
India into a cashless economy. For a sustainable growth in the Indian economy, reducing the dependence
on cash is desirable for a variety of reasons. India has one of the highest Cash to Gross Domestic Product
ratios in the world, and lubricating economic activity with paper has costs. According to Tuffs
University(2014) in their study, The Cost of Cash in India, cash operations cost the Reserve Bank of
India(RBI) and commercial banks about ₹ 21,000 crore annually. Also, a shift away from cash will make
it difficult for tax evaders to hide their income and would serve as an initiative towards the cashless
economy.
Government is working on various aspects to reduce the dependence on cash. Opening bank accounts for
the unbanked people and adoption of direct benefit transfer is a part of the overall plan to minimize the
usage of cash and increase transparency. RBI has also issued licences to open small finance banks and
payments bank to involve more and more people to financial inclusion and bring innovative banking
solutions. Technologies like Unified Payment Interface (UPI) by National Payments Corporation of India
has made digital transaction as simple as sending a text message.
Inspite of taking various initiatives, still there are few sectors of the population which are not able to
receive the benefit of using cashless services. A large part of the population is outside the banking net
and not in a position to reduce its dependence on cash. So, to understand the reason behind it, it is very
much important to analyze what is affecting the perception of people while they are making their
decision regarding choosing a particular payment mode and measure their tendency to adapt to the new
innovations taking place in the digital sector and what are the behavioural intentions, perceived
usefulness and other factors responsible for deciding their transaction pattern.
1.2 RESEARCH OUTLINE

My research topic is based upon the use of cashless payment modes. With passage of time, cash is
becoming a secondary payment method. In the last few decades, cash payments are facing a constant
downfall which is predicted to continue in future. Cashless transactions are the reason behind this
decreasing trend of cash payments.
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Cashless Transaction:-
Cashless society describes cashless transactions as an economic state where the monetary transactions are
not performed with cash ( i.e through physical notes or coins), however they are been made through
transferring money digitally between the two parties. These cashless societies are originally based upon
the concepts of barter system and other such systems. Introduction of digital currencies like bitcoin has
made cashless transactions possible in the present scenario. However, in the above text we only studied
the ‘cashless society’ with reference to its future implications. But, a society where money is replaced
with its digital equivalent and where the money exchange is solely been made through digital transaction
mode is known as the cashless society. Such concepts are frequently been discussed nowadays because of
the substantial growth and increased usage of electronic payment modes for the purpose of recording,
managing and exchanging money in commerce, investment and in day to day life. Originally the
payments which were made by people through cash are now been made electronically. There are also few
countries in the world which have imposed certain limits over transaction values on which non-electronic
payments may be lawfully used. It was basically during the nineteen nineties that the main trend of the
employment of non-cash transactions and settlement started and digital banking became popular. In the
year 2010, electronic payment strategies were used in several countries with the help of intermediaries
such as Paypal, digital pocketbook systems operated by organizations like Apple, contactless and NFC
payments by electronic card or Smartphone, and electronic bills and banking which bushed widespread
use. By the end of 2010, the cash transactions which were originally been preferred through physical
tender were actively disfavoured, and bigger amounts were treated with suspicion because of its ease to
use in money laundering and other illegal activities due to which other suppliers and retailers restricted
their usage of cash for transactions. By 2016, it was believed that one out of seven persons have started
using electronic payment methods in and around United Kingdom. When a consumer survey study was
conducted in United States in the year 2016, it was found that the three fourth of the respondents use
digital payment method and only 11% of the them use cash as their payment method. With various
benefits there also comes some concerns associated with it. There have been various disputes on the
digital payment concept amongst the people as people are considering it as a creepy move which has
resulted in negative interest rates, banking transaction tax and a global taxation regime. It has the
capacity to help central governments and develop the overall economy. However, the loss of money
shifts the overall management of transactions, interest, and individual use of cash, and knowledge
regarding these, to the state and service providers. Various countries have also imposed restrictions and
prohibitions over digital currencies such as Bit coin. To overcome the situation of crime and terrorism,
various issues have been raised on “fortuitous” and dangerous consequences. It can be concluded that
negative interest rated are fully enforced and money usage can be regulated in great detail.
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A cashless society is easily accessible and fast. A shift to digital economy will reduce the problems of
drawing cash and enabling that cash-in-hand is enough to make transactions in areas where only money
payments are allowed. Government bodies can also study the transaction behaviour of consumers easily
when it is operated through online payment gateways. Existence of illegal cash would get completely
diminished with the existence of this technology. Recording of transaction can be performed hassle free
with lease amount of time allocation.
1.2.2 Types of cashless payment modes:-

The various types of research payment methods are:
TYPES OF CASHLESS
PAYMENT MODES
CREDIT E- MOBILE UPI UNSTRUCT
CHEQUE ONLINE WALLE GIFT AADHAR
DEMAND CARD WALLET APPS URED
TRANSFER- TS CARD ENABLED
DRAFT OR S PAYMENT SUPPLEME
NEFT or NTARY
DEBIT SYSTEM
RTGS SERVICE
CARD
DATA
1. Cheque
Cheque is one of the oldest forms of cashless mode of payment. Cheques are used to send a particular
amount to some other person. Firstly, they get deposited in their respective banks and then bank
processes these cheques to the clearing house. The whole process of sending and receiving the cheque
gets recorded and there is an evidence of each and every transaction. However, there can be some
circumstances where the cheques get bounced due to insufficient balance in the sender’s account or
because of an incorrect signature. So, if this payment mode is not convenient for you, you can try other
methods of cashless transactions.
2. Demand Draft
Demand draft is another elementary way for cashless payments. It is one of the safest methods through
which money exchange can be performed between the two parties. The banker signs the demand draft
before sending it to the receiver. Therefore, the chances of default in the demand draft are very less. The
main drawback with demand drafts and cheques is of location and time. For enabling transactions, the
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person would have to visit the bank, and only then further processing can be performed which in itself
takes a lot of time to proceed.
3. Online Transfer- NEFT or RTGS
The third easiest payment modes are electronic transfers using NEFT or RTGS. For the purpose of
transferring money online, the most basic requirement is online banking facility. Transactions with
RTGS and NEFT are more quick as compared to that of cheques and demand drafts. With the availability
of net connection, digital transmission of payments can be made easily possible.
4. Credit card or Debit card
Another cashless payment mode is Credit card or Debit card. The employment of credit card or debit card
was confined in India but nowadays there has been an increase in the number of people using these
services. The drawback to this method is the Swipe card facility (SCF) which is available at the
merchant’s end.
5. E-Wallets
The next payment mode is e-wallets. We can make the use of e-wallets for purchasing products such as
bus ticket, flight ticket, groceries etc. The fundamental need to enable the use of e-wallet is internet
connectivity. Nowadays the mostly used e-wallets are paypal, transferwise, Payza etc. Once you have
signed or registered in the e-wallets the next thing you have to do is register your debit or credit card with
your e-wallet id. E-wallets can also be used for money transfer and online shopping.
6. Mobile Wallets
The next online payment method is mobile wallets. While making transactions using mobile wallets it is
not necessary to have a credit card, debit card or any internet banking password. With the help of IMPS
we can easily load money in the wallet. Mobile wallet applications can be easily downloaded from play
store. The examples of mobile wallets are paytm, mobikwick etc.
7. UPI Apps
UPI is an online payment system which helps to do various financial transactions on the mobile phone.
UPI allows the individual to send and receive money using virtual payment gateway without entering the
details about the bank. Merchants will have to enrol with their respective banks to receive money using
UPI. Like in the case of POS machine, the merchants would have to make a current account in the bank
for receiving payments. The examples of few UPI Apps are PhonePe, SBI Pay, ICICI Pocket, Axis Pay
UPI App etc.
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8. Gift Card
The next cashless transaction mode is a gift card. Gift card is a card which can be easily purchased from
banks and merchants. A gift card is filled with a specific amount with the help of which any item can be
purchased.
9. Aadhaar Enabled Payment System
Aadhar Enabled Payment System is one of the best models of digital payment method. AEPS is similar to
a mini ATM which uses fingerprint sensors and mobile phones for enabling transaction. The benefit of
this facilty can be utilized by a consumer only when they link their aadhaar card to the bank account.
AEPS system can used to enable transactions like Aadhaar to Aadhaar fund transfer, cash deposit, cash
withdrawal etc.
10. Unstructured Supplementary Service Data
USSD digital payment method is also an option for those people who are neither having internet
connectivity nor a smart phone. Unstructured Supplementary Service Data is a mobile payment service.
With any mobile phone, by dialling *99# we can avail this service. Almost every bank including SBI,
ICICI, BOB, Axis Bank and PNB support this service.
Digital payments in India have been experiencing continuous growth and with growth of internet,
cashless payments and other mobile transaction modes, the country is ready to witness a tremendous rush
in the adoption of cashless payments. According to Ratan Watal, principal advisor Niti Aayog and former
finance secretary, cashless payments have grown 55% by volume and 24.2% by value in the year 2016-
17 in comparison to the previous years. Information received from the Reserve Bank of India (RBI)
indicates that the degree of adoption of cashless payments had accelerated when the demonetization of
500 and 1000 rupee notes took place in India but the effect gradually slowed down with the onset of
2017. The volume of cashless transaction has foreseen an exponential growth in volume and value
whether it be digital wallet, interbank transfer or payment by debit or credit card. At merchant places, the
number of card transaction at point of sale (PoS) terminal have undergone a huge serge which depicts
that people have started making transactions by debit card instead of withdrawing cash from ATM to
make payment. In January 2017 the number of payments through debit card increased to one billion from
817 million with respect to that in the previous year. It has been significant that ATM transaction are
more or less same at 700 million, the transaction at Point of Sale terminal has incremented three times
from 109 million in January 2016 to 328 million in Jan 2017.
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According to Lokvir Kapoor, the Chief Executive Officer at PineLabs “the card transaction post
demonization saw a significantly huge growth as a result of infrastructure for the acceptance of card at
various merchant location.” PineLabs has helped this growth by deploying an effective number of Point
of sale at retailers across the country. Also the number of offering by various service providers such as
cash back, no transaction charge up to certain limit will further help in growth of digital transactions. The
government has also pressurized banks to deploy one million point of sale terminals within a period of
three months to increase the number of pos terminals to a number of 2.52 million. India is heading on the
path of a major digital revolution. The future economy will be driven by cashless transaction which will
be possible through digitalization of payment mechanism at different location such as smart phone,
internet banking, card transaction etc. The focus of present study is to find how respondents are adopting
cashless payments and what factors are responsible for their perception towards adopting cashless
payment mode. The study collected response from 100 respondents and analyzed their perception,
preferences and satisfaction level of cashless payment mode. It further identifies the barriers and
challenges to the adoption of digital payment.
1.2.3 Overview of Dominance of Cash in India
History of origin of a paper currency in India.
Until the eighteenth century, gold and silver coins were utilized by various people in the Republic of
India. Within the nineteenth century, folding money came into existence. E-paper money Act which
came in the year 1861 gave government the monopoly of issuing notes amongst the people Republic of
India. 'Victoria Portrait' Series were issued primarily as a set of British Republic of India notes in
denominations of 10, 20, 50, 100 and 1000. Alternative colonial governments have additionally written
notes to be used in their territories in the Republic of India. For example, France’s Banque Delaware
l’Indochine issued its own “roupie” notes and also the Portuguese issued “rupia” notes. Notes issued by
the Britishers were made by the Bank of European nation till India’s first currency machine was
established in Nasik in 1928. In 1935, the responsibility and authority of handling India’s cash was
handed over to the newly-formulated run batted in. Initial post-Independence notes came move into
existence in the year 1949. Few years following their existence, run batted in notes of different
denominations that includes images of monuments and different editions of a brand new “Mahatma
Gandhi series” of notes. During the initial time in 2016 Rs 2,000 currency note were being introduced
with the decleration of E-Government of Republic of India (GoI) on eighth November 2016 regarding the
conclusion of existing INR500 and INR1000 currency notes and introduction of latest notes , the Indian
economy created an emotional bonding towards a cashless economy. Dr. Ambedkar stated that a limited
level of devaluation of the currency would influence the business category further because of the earning
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sector in existence. A really steep devaluation would damage the latter as they might be hit by high
inflation. In effect, he afore mentioned that the belonging of those 2 teams ought to be balanced whereas
thinking about the world of the rupee, as a result of a really steep devaluation would cut the actual wages
of the earning sector as a result of inflation. The Republic of India conducted demonetization earlier the
initial time on twelve of Jan 1946, second time on 16 Jan 1978, IRD time on eighth Nov 2016. Abundant
has been modified within the Indian economy since Ambedkar did his educational qualification financial
social science. Many countries have used the word and also the policy with huge restriction and
discomfort, for it disrupts social science and population of a giant. E French was the primary objective to
use the word devaluation, during the years between 1850 -1855 African nation, Nigeria, Zimbabwe,
D.P.R.K., country and the Republic of India are the countries that attempted demonetization. Australia
became the primary country to compound notes to prevent widespread simulation. Whereas large number
of the Republic of India remains were questioned upon. A 2010 study by Moody's depicted that the world
value registered an extra zero. Two share points within the rate of growth as a result of electronic
payment instruments. Over ninety- nine percent of payments by volume are still in cash payments in the
Republic of India, in accordance with the McKinsey world Insights report. The question then aroused
that with this low percentage of cashless transactions and cashless base, can there be opportunities for
India to accept digital payments? With the focus on this background, the paper focuses on the influence
of devolution on our economy, simulated currency, and problems associated with cashless economy. The
Times of the Republic of India enlightened this story and questioned a variety of Indian bankers how
they viewed of this concept to cut back the quantity of restricted 'black money' flowing into the economy
through these high-currency notes. Prices of interlinked activities like printing a lot of currency bills,
transportation, further increased because the cost of your time spent in tally and storing bills can increase.
This created a need for a system to eliminate such additional activities which are associated with cashless
payment transactions. This research further studies what can be the factors which a consumer considers
while making a payment whether it be digitally or through any other cashless payment mode.
1.3 BENEFITS
Since the Nineteen eighties, the variety of transaction methods available to consumers have consecutively
increased, however the perception of consumers about payment mode choice on consumer purchase
behaviour is not well evaluated. So, the main scholastic advantage of the study is that it will add value
and contribute knowledge to this under-researched area in the consumer research category. By removing
the facility of payment in credit at the point of purchase, the effects of the cashless payment mode can be
more precisely calculated. Also, by analyzing the cognitive and subjective factors that consumers have
with payment methods, the study will add value to our knowledge of the nature of our visceral and
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somatic relationship with payment modes and provide a clearer picture of how payment modes can affect
the purchase made by consumers by using these modes.
The findings may also help us in directing towards the actions of community, environment groups,
government and business decisions. For example, if the use of cashless payment systems irrespective of
the debit-credit factor affects judgement decision as to how much is spent or what is bought and affects
money management, this has relationship with lifestyles and budgeting/saving. So, consumer awareness
and educational programs must be designed to alert and advise customers which can be useful in the long
run. Business decision makers and the top management of a company may see an additional benefit in the
first instance and initiate more accurate investigation into product category/form and pricing effects. If no
differences are found, then problems with the viewpoint of social commentators and environmental
activists will be allayed.
There are various direct as well as indirect benefits of going cashless for India. We list them below.
Direct Benefits:
(a)High maintenance costs
According to the Reserve Bank of India (RBI), the preliminary estimates of the amount of currency in
circulation (as of June 2016) is figured to be INR 16.61 trillions, out of which only 5% of the currency is
with the bank. Between April 1994 to June 2016, currency has shown an annual growth rate of 17%,
while the proportion of bank currency has remained around 5%. It was calculated that, for the period
2009–2010, RBI beared an annual cost of INR 2800 crores for printing currency notes (Das and Agarwal
2010). This amounted to 0.4% of the total currency in circulation. This cost does not combine the cost of
transportation, security, detection of simulations, storage etc. In addition to the printing cost, if we were
suppose to add the costing of maintaining and storage of these currencies through ATMs alone, the cost
of printing and distributing of the cash would compile together as 0.2% of India’s GDP. Considering
these costs, an average growth of cashless transactions by 5% a year will save more than INR 500 Crores
yearly.
(b)Financial records and tax collections
Although it is difficult to obtain accurate calculations of the amount of “black money” in the country, it is
certainly depicted, both in terms of value and as a percentage of GDP. As a prevention strategy, the
Government declared an immediate demonetization of all high-value currencies. Schneider (2006)
calculates the amount of India’s black money economy between 23% and 26% of the GDP. Some recent
calculations consider it between 40% and 75% of the GDP. In addition to this, India is among the
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countries having the lowest tax callection. Economic Index of Freedom data has calculated the tax burden
in India (tax revenue as a percentage of GDP) at only 17.6%, which is lower than the global average that
is of 25%. The lower tax burden is mostly due to low tax acceptance in the economy, as well as have a
complicated tax structure. While the direct tax rate is 30.9% in India, as opposed to a global average of
35.6%, only 1% of the total population in India contributes in paying income tax. The effort is therefore
to increase indirect tax collection. With cashless transactions, all transactions would leave digital fore
steps. A system that motivates and incentivizes the “buyer” to pay through cashless instruments
(increasing use of bank-to-bank transactions without involving physical currency) will have higher
financial transparency. This is perhaps the most direct method of fighting issues of corruption and black
money in India. Recently, Bhattacharya and Singh (2015) use a panel of 54 countries over 2005–2013
and find a strong relationship between high currency notes and corruption. For India, perhaps, the
indirect benefits of going cashless are stronger. We highlight two broad benefits, which are precisely
important in the Indian context. The first one is promoting financial inclusion and the second is a better
targeting of benefits.
Indirect benefits:
(a)Financial inclusion
The percentage of population covered under the banking sector is still low in India (slightly above 60%),
despite making various initiatives and improvements. The inclination towards financial inclusion in India
has emerged from the Pradhan Mantri JanDhan Yojana in August 2014, the Jan Dhan Aadhaar Mobile
trinity formulated in the Government’s Economic Survey 2014–2015, as well as the special thrust on
financial inclusion by the Financial Stability and Development Council. As of July 2016, approximately
228 million accounts have been opened under the PMJDY scheme. However, one fourth of them are
accounts with zero-balances. The biggest problem associated to financial inclusion is that the accounts
opened under such schemes mostly lie slumbering (Gangopadhyay 2009). Various models have invested
to activate the accounts with mixed results. India has tried the banking interrelationship model, drawing
upon the experiences of Latin American countries such as Brazil and Mexico with this model, a
conditional cash transfer program in Brazil, and mobile banking technology in Kenya, Uganda, Tanzania,
and other African nations). However, mobile banking is perhaps best suited and appropriate according to
the problem of connecting to users to the banks. Most previous models in India have focused on how to
make it easier for the individuals to access cash. The focus should be on how efficiently can they carry
after their financial transactions.
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(b)Stopping leakages
A cashless economy could stop leakages in the economy. In the year 2009, the Planning commission
estimated that only 27% of Public Distribution System expenditure reached the focused lower income
groups. The use of computerized methods to keep record of all transactions with respect to government-
to-person (G2P) payments can have a large amount of impact on the economy as a whole in terms of
efficiency, safety, and transparency. It also brings previously unbanked system of the economy into the
fold of formal financial services by segregating a regular flow of money into their accounts. It is evident
from the other countries that this method is already in operation. In South Africa, over 80% of banking
beneficiaries receive government transfers into an account and the percentage is as high as 88% in Brazil.
Mexico’s shift to digital G2P payments led to a cut in spending.
1.4 RATIONALE
The inspiration for this study is due to the growing importance of technological developments in the
payment methods over time. The purpose of examining the causes behind the increased adaptation to
digital payment methods than physical money is also one of the major reasons for conducting this study.
The rationale for the study is to analyze a rational set of perceptions that gives a simplification to the
factors behind the use of cashless financial transactions. There is particular interest to identify the
benefits they provide to the customer. The main inspiration of this study is to formulate the existing
research for the use of cashless financial transactions, with recognition to the perceived benefits and
drawbacks to the preferred transaction pattern.
1.5 AIM and OBJECTIVE

There is been a good progress in cashless payment penetration at developing country markets, initiatives
are also being made to promote the usage of mobile payment exhaustively where proportionate part of
people fall into innovators category (Viehland & Leong, 2007). This study considers analyzing the
factors that persuade the adoption of cashless payments is of utmost importance in the present day to day
life. Further literature review leads us to many research questions that are listed as:
• Are customers ready to imbibe this new modes of cashless payment?
• What is the consumption pattern of consumers towards cashless transaction methods?
• What are the factors that would increase or reduce the adoption of cashless payments in the consumer
market?
• Do these factors accelerate the adoption of cashless payment solution?
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From these research questions we can arrive at specific research objectives by analyzing the variables or
driving forces behind the usage of cashless financial transactions in order to gain an insight about
perceptions of Indian consumers towards their cashless transactions. The researcher looks to attain this
aim by following three main objectives:
 To investigate the perception and attitude of Indian consumers about digital transactions.
 To explore the main driving force of people preferring cashless transactions over cash
transactions.
 To evaluate the future scope of cashless economy in India.
All the above sub objectives sum up to contribute for the main objective of the study that is to determine
the factors affecting the cashless transaction by people.
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2. LITERATURE REVIEW
2.1 Research Variables

The minor research project is conducted with the help of a questionnaire to analyze the variables that
affect the user’s perception to adopt cashless transaction services. With the help of literature review an
initial model has been formulated which would include the hypothesis for each variable. The model
includes the following variables (Table 1): Behavioural Intention, Perceived Usefulness, Perceived Ease
of Use, Trust, Innovativeness, Subjective Norms, and Functionality.
Table 1: Conceptual definition of the research variables
RESEARCH CONCEPTUAL DESCRIPTION REFERENCE

VARIABLES
Behavioural “ A person’s perceived likelihood or Fishbein, M., & Ajzen, I.
Intention ‘subjective probability’ that he/she will (1975). Belief, attitude,
perform cashless transactions.” intention and behaviour: an
introduction to theory and
research.
Perceived "The degree to which a person believes Davis, D. (1989). Perceived
Usefulness that using cashless payment services usefulness, perceived ease
would enhance his or her job of use and user acceptance
performance". of information
technology.
Perceived Ease of "the degree to which a person believes Davis, D. (1989). Perceived
Use that using cashless transactions would usefulness, perceived ease
be free from effort" of use and user acceptance
of information
technology.
Trust –security in digital payments. Cho, D. Y., Kwon, H. J., &
–confidentiality of personal data. Lee, H. Y. (2007). Analysis
–trustworthiness in the results obtained of trust in internet and
through online transaction. mobile commerce
–integrity of the terms used for digital adoption.
payment.
Innovativeness “The willingness of an individual to try Midgley, D., & Dowling,
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out any new mode of payment other G. (1978). Innovativeness:
than cash”. the concept and its
measurement. Journal of
Consumer Research
Perceived enjoyment “Performing cashless transactions (Ryan & Deci, 2000)
because it is inherently enjoyable and
interesting”
Subjective Norms “Perceived social pressure which Ajzen, 1991
influences an individual to behave in a Yang et al. (2012)
particular way”. Influence from friends,
colleagues are critical factors affecting
mobile payment adoption.
Functionality –transaction speed Kim, H. W., Chen, H. C., &
–connection to the network speed Gupta, S. (2007). Value-
–interface comprehensibility based adoption of mobile
–infrastructure availability internet: an empirical
Investigation.
2.1 Behavioural intention

In various models of behavioural intention, such as the Technology Adoption model and Theory of
Reasoned Action, there has been an initiative to analyze the variables that affect the consumer’s decision
on using a technology. Fishbein and Ajzen (1975) in their research first described the term “Behavioural
Intention” to portray “a person’s subjective probability that he/she will perform some behavior”.
Figure 1.1: Fishbein – Ajzen model (1975)
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Davis (1989), also continued with this idea to justify the Technology Adoption Model, which in the end
concludes to the “Actual System Use”. On studying these theories there is a variable included in the
formulated research, entitled “Behavioural Intention” to outline a person’s subjective probability that he
or she will adopt cashless payment services.
2.2 Perceived Usefulness

“Perceived usefulness” has been a contributory variable in many of the technology adoption models that
have been propounded since 1989, when Davis first used this term. It is been defined as “the extent to
which a person believes that using a particular system would improve his or her performance in job”.
Perceived usefulness has been used as a variable in various surveys for different types of technologies
and systems, such as cashless payments, mobile commerce, application frameworks, eCRM, and
generally technology adoption models. In all the above studies, the perceived usefulness for the cashless
payment transactions influences positively individual’s adoption intention of digital technology. Thus, it
is rationally expected that the same relationship between the model’s variables could also be applied to
the present study.
2.3 Perceived Ease of Use
“Perceived Ease of Use” has been referred as an essential concept in many of technology adoption
models. It is described as “the degree to which a person believes that using a particular system would be
free of effort”. It has been used as a variable in a various studies for different types of technologies and
systems, such as cashless payments, mobile commerce, application frameworks, eCRM, and generally
technology adoption models. In all the above studies, the perceived ease of use of the technology
associated has a direct positive influence on the behavioural intention to use a particular technology.
Technology Acceptance Model also depicts a strong relationship between the perceived ease of use and
perceived usefulness as associating variables on consumers’ behavioural intention.
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Figure 1.2 : Technology Acceptance Model- Davis (1986)
The Technology Acceptance Model flowchart in the above figure was established by Davis (1986). The
model was formulated to explain consumer behaviour with respect to technology. The main objective
was to provide constructs on beliefs, attitudes and intentions of the technology. When used in payment
methods, the variables used in the model works to analyze consumer’s perceptions of the actual
usefulness or the ease of use.
This is explained as the degree to which the user expects the system to be free of effort (Davis et al.,
1989).
Researches conducted on Adoption intention model have studied that there is a positive effect of
perceived ease of use on perceived usefulness when using technologies like: mobile commerce, cashless
payment services or technology acceptance models. Hence, it is important to hypothesize that the same
relationship could be included in our research regarding the mobile services.
2.4 Trust
Trust has been a very essential tool while analyzing the perception of consumers towards using cashless
payments system. Cashless payments are susceptible to various uncertainties and danger therefore the
importance of trust is relatively high than that of any other variable. According to various researches,
trust has been defined as a privacy protection which enables a user to choose the way in which his or her
personal information can be used. Pavlou (2006) stated that “trust is the belief that allows consumers to
willingly become vulnerable to the online retailers after having considering the retailers’ characteristics”
including goodwill trust (benevolence) and credibility (honesty, reliability, and integrity).
Trust can further be subdivided into two sub categories: trust in service providers and trust in technology.
According to Bhattacherjee’s study on cashless payment services, trust in service providers refers to the
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customers perception of service provider’s abilities and knowledge with reference to the expected
behaviour, integrity- the customers perception of service provider that he or she will comprehend a set of
principles or rules of acceptance to exchange to the users during and after the exchange, and
benevolence- which means that the intention of service provider is to provide services for the betterment
of the consumers beyond its own objective of profit maximization. Whereas on the other hand, trust in
technology is referred to as the transaction protocols, technical standards, payment systems and security
while making conducting cashless payment transactions.
2.5 Innovativeness
According to Information Technology innovativeness can be defined as “ the willingness of a customer
to opt for new payment service options”. The technology acceptance models define innovativeness as the
extent to which a consumer is using a new product, concept or an innovative good or service. Under the
guidelines of Technology Readiness Index (TRI) theory, innovativeness as a variable is combined with
technology adoption as well as other integrated factors such as discomfort, optimism, and insecurity.
According to the individuals who have a competent information on innovation and are considered to
knowledgeable about technology, regard the innovativeness within a technology has having an positive
differential effect on the perceived ease of use. Walczuch et al. further studied innovativeness as having a
positive impact on perceived usefulness and perceived ease of use regarding the adoption of cashless
payment services from service employees. According to Kuo and Yen in their research paper they
analyzed that there is a positive relationship between perceived usefulness and perceived ease of use.
Their study depicted that innovativeness highly influences the perceived ease of use of cashless payment
services. Lu et al. studied the influence of social influence and personal innovativeness on cashless
payment services and found that there is no direct effect on users intention to adopt the digital services.
Innovativeness has also been perceived as an important factor affecting the use of digital payment
services. According to Chen and Tong in their research they discussed the importance of innovation for
the telecommunication industry and mobile payment system. Making innovativeness an important
variable for the analysis of users intention towards digital payment modes.
The adoption of cashless payment has also been analysed by the “Diffusion of Innovation Theory”
(DOI). This was introduced by Roger (1962), this approach shows how innovations are adopted by
individuals in society through a sequence by classifying users into adopter categories. Relating this to
cashless transactions in society, the adoption of cashless payment methods is subject to how willing
consumers are to use new technology (cited in; Tee & Ong, 2016).
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Figure 1.3: Diffusion of Innovation Model; U.K. Consumer Payment Study (2016)
Figure 1.3 signifies the analysis of the Diffusion Of Innovation theory using different payment methods.
The figure shows that the use of payment cards and contactless payment has been widely accepted in
society and the use of mobile payment is still being established. The statistical data which depicts the
introduction and adoption of mobile payments in the early adoption stage could be a result of variables
used in the model.
2.6 Perceived Enjoyment

While perceived usefulness and perceived ease of use are two basic variables which represent only
extrinsic motivations, perceived enjoyment as a construct mentions intrinsic motivation which is equally
important as other variables. According to Ryan and Deci (2000), perceived enjoyment refers to “doing
something because it is highly interesting or enjoyable”. Intrinsic motivation is an essential factor
affecting behavioural intention to use technologies in the integrated model developed by Venkatesh et al.
(2002). This study also follows with the argument that consumers use a particular technology only when
there are some rewards associated with it. (Igbaria, Parasuraman, & Baroudi, 1996). Some studies
examined that perceived enjoyment is associated with intention to use mobile chat services and cashless
payment services.
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2.7 Subjective Norms
According to Ajzen (1985), subjective norms are norms which represents perceived social pressure while
performing a particular behaviour. The more are the appropriate subjective social norms associated with
a behaviour, the stronger is the objective to conduct the behaviour should be (Ajzen, 1991). While
Mallat et al. in the year 2009 revealed that social and group pressure is strongly related to intention of
using mobile payment services.
Figure 1.4: Mallet et al. (2009)
Yang et al. in the year 2012 concluded that pressure from friends, colleagues and others in the social
group is an important factor affecting mobile payment adoption. It is showing that subjective pressure has
a positive effect on intentions to use cashless payment services including chat, text message, contact and
payment.
2.8 Functionality
According to Kim S. and Garrison (2008) in extension to the Technology Acceptance Model defined the
variable “Perceived Ubiquity” as the “ perception of an individual towards mobile wireless technology
serving customized and uninterrupted connection and communication between the individual and other
individuals or networks. In addition to this, “Perceived Reachability” was defined as the “ the extent to
which an individual would reach out to other individuals at any given time and place” mentioning that
the technology used has the ability of being connected. The findings have authenticated the positive
effect of perceived ubiquity and perceived reachability on behavioural intention under the Technology
Adoption Model. Dholakia et al. referred functionality to “anytime and anywhere” capability as an
essential factor. According to Gulcin, functionality is referred to the accessibility that is everywhere and
all the time access to mobility- as an essential user necessity for cashless transaction. The latter also
mentioned among the most important requirements of digital payment users, is the need for
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comprehensible interface which guides the user of the mobile application through services stages. Lei-da
Chen (2004), also, refers to response time as an essential factor in his suggested model of consumer
acceptance of mobile payments. In the study hereby, we incorporate from the above literature the
understanding of the service’s response time, the connection speed (to the mobile internet), the
comprehensive interface, and the technological infrastructure (regarding the provision of access to the
services from anywhere and anytime) and introduce the construct “Functionality”.
2.2 Review of Literature

Nguyen et al. (2016) examined the factors that influence consumer’s intention towards using digital
payment services. The researcher used primary data to investigate the impact of consumers perception of
mobile payment services and social influence on use intention. With the help of empirical values of the
489 Vietnamese consumers it was confirmed that there is a significant relationship between the variables
and behavioural intention. Perceived Trust came out to be the strongest variable predicting the intention
to use mobile payment services followed by other variables such as perceived ease of use, perceived
enjoyment, perceived behavioural control, perceived usefulness and lastly subjective norms. primary
data was used is mostly influenced by trust and perceived ease of use. So the service providers main
focus should be on building consumers trust by providing clear, understandable and easy to use services.
With the help of this study, researcher suggests mobile payment service providers on mainly focusing on
building consumer trust and making services easy, clear and understandable for them.
Fong et al. (2016) in their research study evaluated the factors which influence an individual’s intention
towards using mobile payment services and also intentions to conduct a causal relationship between
current users (early adopters) and potential users (non- adopters). The findings depict that the constructs
that affect current users intentions to use mobile payment services are subjective norms, compatibility,
perceived trust, and perceived cost. Whereas compatibility, subjective norms, ease of use, and perceived
risk influenced potential users intentions to use mobile payment services. Perceived risk and subjective
norms strongly influence potential users, while perceived cost has had a stronger influence on current
users in terms of their intention to use mobile payment services.
According to Zarmpou, Vlachopoulou, Saprikis and Markos (2012) in their research focused upon the
factors that affect the adoption of mobile services through their effect on behavioural intention. The study
is based upon behavioural intention theories, such as Technology Acceptance Model, Diffusion of
Innovation, Unified Theory of Acceptance and Use of Technology. The study concluded that behavioural
intention is directly affected by perceived usefulness, innovativeness and relationship drivers.
Pavlou and Featherman (2003) in their research project focused mainly upon the factors that create
negative utility to consumers with respect to the e service adoption. They further conducted their study
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using the derivations of perceived risk theory and specific risk facets which were operationalized, tested
and integrated with the Technology Acceptance Model which ultimately results in a compounded e
services adoption model. The research findings indicated that e-services adoption is adversely affected by
performance-based risk , perceptions, and perceived ease of use of the e-service. This analysis can help
further researchers as a basis to indicate what level of risk perceptions must be devalued to encourage
more adoption of e- payment services within the target market.
Dr. Padashetty and Prof. Kishore (2016) in their research project investigated the factors that affect the
adoption of cashless payment in India. It was examined that Perceived Use, Trust, Expressiveness and
Perceived Ease of Use play a very critical role in influencing the digital payment solution. It was
considered useful by the respondents because of the time it saves with its single point of purchase and
payment. The mobile payments were considered easy to use by the respondents because people carry cell
phones with then most of the time and the mobile is therefore easily available in any situation. According
to them teenagers use mobile payment applications more frequently than other age groups. Their
recommendation to the marketer for growth in use of cashless payments in other age groups would be by
slowly persuading them and preparing an effective marketing campaign that would help convert non user
to a user of mobile payments. through complete analysis of data and found that the elements like
Perceived Use, Trust, Expressiveness and Perceived Ease of Use play a crucial role in facilitating
adoption of mobile payment solution.
Alice Elizabeth Davies (2017) in her research project focused particularly upon the attitudes and
perception of students regarding cashless financial transactions. The aim objective of her to conduct this
research was to reveal the driving forces behind the use of cashless transaction. With the help of her
research findings it was emerged that the most preferred method of payment in the is through card with
the use of contactless payment method. Through her study she also identified that the main reason for the
specific preference of payment method was convenience, ease of use and the aspect of time saving. It
was also found that mainly the younger generation students prefer using cashless payment methods as
their mode of payment because of their inclination towards using new and innovative payment
technologies. The study showed that cash is more appropriate payment mode for personal budgeting
according to people, because of psychologiocal attachment and increased value associated with it. The
study concludes with the view that students’ attitudes and perceptions of cashless financial transactions
are of a positive nature.
Singh and Rana (2017) examined in their research project that there is a positive impact of consumer
perception on the adoption of digital payment mode. For the analysis of this significance they used a
structured questionnaire. ANOVA and frequency analysis were used as the constructs for interpreting the
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responses of the individuals. With the help of ANOVA test they found that there is no significant
variance in consumer perception considering the demographic factors such as gender, age, profession and
annual income of the individuals. However, education was found to have significant effect for the
adoption of digital payment services.
Singhal and Padhmanabhan (2008) in their research paper explored the various factors which are
responsible for internet banking with respect to the perception of respondents. After analysis they found
that ‘utility request’, ‘security’, ‘utility transaction’, ‘ticket booking’ and ‘fund transfer’ are major factors
affecting people perception towards internet banking. Whereas from the total respondents, 50% of them
believed that digital banking is easy and convenient way for banking and it has various transaction
related benefits associated with it. And in the current scenario digital payment system has become a
“need to have” rather than a “nice to have” service.
Singh and Srivastava (2016) focused their research on examining the factors which influence the
adoption of mobile banking system in India and also validate the model by explaining the behavioural
intention behind mobile banking in the Indian banking sector. For this purpose they used six contructs,
namely, perceived ease of use, computer self-efficacy, social influence, perceived financial cost, security,
and trust to identify the main influential factors on mobile banking system. With the help of their study
they revealed that security, computer self-efficacy, perceived ease of use, and perceived financial cost, in
that order of influence, affect customers’ intention to adopt mobile payment system.
Chandra et al. (2010) conducted research to derive relationship between trust and consumer adoption of
cashless payment services. The study was based upon the technology adoption model and trust as their
core grounds for research. The study propounded two main factors of trust facilitators; they include
“mobile service provider characteristics” and “mobile technology environment characteristics”. Further
the research highlighted with the help of their findings, that there is a differential importance of trust
facilitators- “perceived reputation” and “perceived opportunism” of the mobile service provider, and
“perceived environmental risk” and “perceived structural assurance” of the mobile technology.
Jashim Khan (2011) examined the emotional and cognitive associations which people have while using
payment modes and also evaluated whether these associations have an effect upon the choice of payment
mode and payment behaviour. This research focuses on understanding the perception of consumers
towards any type of payment methods whether it is cash, card or any other cashless payment modes. The
study finds the reasons behind people using physical payment methods which are affecting the
perception, judgements and behaviours of individuals. The research findings have indicated that payment
modes affect both value and volume of purchase. The respondents who use debit cards spend
comparatively higher than that to the other cash group. Respondents using debit cards for payment
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exhibit positive feeling about their preferred payment mode. However irrespective of which payment
mode they are using, respondents do not like receiving gifts of money being deposited in their bank
accounts. They believe that electronic card use will impair their money management skills and awareness
towards spending.
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3. RESEARCH METHODOLOGY
RESEARCH DESIGN
The research paper formulated is exploratory, descriptive, empirical and analytical in nature. Since the
study is been conducted on 101 respondents, descriptive analysis was formulated to characterize the
respondents in a well defined manner. In other words, it basically helped in describing the population
selected for the paper. Factor analysis was used as a tool to convert large group of data into smaller
relatable data. Through this approach we can find the correlation between the variables and determine
their interdependency.
An exhaustive and in-depth literature review makes this research paper an exploratory research too. It
helped in providing conclusive results necessary towards achieving the research objectives and
investigated the topic at different levels of depth. This primitive and elementary research, further helped
in finding the sampling methodology, data collection method and research design.
The study focuses upon the primary data as the main source of data collection, which makes this research
design empirical in nature as well. The primary data was collected with the help of a well- structured and
designed after questionnaire. The data thus collected was tabulated and quantitative in nature serving the
qualitative needs as well. The hypothesis was formulated with the help of suitable tests through which
analysis and interpretation of the conclusion was being made.
This research study is analytical in nature as this research comprehensively works towards understanding
the various factors which affect the adoption of cashless payment modes in India, working towards
critical evaluation of the concept.
SAMPLING DESIGN
For the targeted sample, the design propounded to employ for the research study includes:
Population- People who use cash or card or any other cashless payment mode for making transaction are
the main focus group of the study. The population will be from the Indore region only.
Sampling Frame- Those who have purchased goods and services by using either cash or any other
cashless transaction will be selected for recording of the responses.
Sample Size: The study has been focused on getting the responses from 101 respondents.
Sample Methods- Purposive Convenience sampling of the non-probability sampling techniques will be
used for the data collection.
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SCOPE OF THE STUDY
Cashless payments system has come as an emerging concept in the past few years. After demonetization
there was a drastic increase in the number of people conducting their payments through non- cash
methods. The people perception towards cashless payment modes is subject to various qualitative norms
and beliefs of the focus group. As these focus groups are from the Indore district and nearby areas, it has
imposed a restriction for conducting the study within a limited area. The questionnaire for the analysis of
the results was based upon the factors including perceived ease of use, perceived usefulness, behavioural
intention, trust, innovativeness, perceived enjoyment, subjective norms and functionality as the main
constructs deriving a particular perception of individuals towards cashless modes of payment.
COLLECTION OF PRIMARY DATA
Primary data was collected through a well-structured questionnaire that was constructed to collect
information relating to awareness to the cashless payment modes, and the main factors which are
responsible for a particular behaviour of individuals towards cashless transactions. Non-probabilistic
purposive convenient sampling was used to select sample size of respondents. The assessment year for
collecting the primary data is 2016 – 2017. A focus group of 100 respondents were selected for
conducting the final research analysis. Therefore, the questionnaire was being prepared considering the
major constructs for cashless payment. Problem areas were identified and were understood with the help
of guide and refined. The final questionnaire was prepared after making corrections and modifying few
questions.
TOOLS FOR ANALYSIS
All data collected was tabulated and scrutinized with the help of descriptive analysis and numerous
statistical tools. Statistical Package for Social Sciences (SPSS) is a widely used program for statistical
analysis that makes use of descriptive statistics, bivariate statistics, linear regression and cluster analysis.
The study undertaken is a descriptive as well as exploratory and empirical in nature, therefore, using
SPSS made sense and was a well-thought decision.
Specific statistical tools used for this study include:
Factor Analysis- Factor analysis is a statistical tool used to determine the factors affecting the
interdependent variables. Through factor analysis we can find the correlation between the variables and
their interdependency towards other sets of data. After using factor analysis, we can hypothesize which
major factors are significant with the underlying objective of analyzing the perception of consumers
about cashless transactions.
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Kaiser-Meyer-Olkin Measure of Sampling Adequacy- KMO measure of sampling is a statistical tool
which is used to indicate the percentage variance which can be caused by the underlying factors. The
KMO measure values ranging from 0.5 to 1.0 indicate significance of the factors and its usefulness
towards the study whereas values below 0.5 indicate that the factors analysis for the mentioned variables
won’t be useful.
Bartlett's test of sphericity- Bartlett’s test of sphericity is a statistical test used to analyze the hypothesis
that there is a correlation between the variables of the population. In other words, population correlation
matrix is an identity matrix this can be verified by checking whether the variable correlates perfectly with
itself (r = 1) or has no correlation with the other variables (r = 0).
Chi-Square Analysis- The Chi-Square analysis is customarily used for analysing association between
two variables. The null hypothesis for this analysis is that no association exists between the variables and
that they are independent of each other. After running this test on SPSS, the p-value of the Chi-Square
statistic will conclude the association of the variables under study. Any value above 0.05 (level of
significance) indicates no association and any value below 0.05 shows that variables are not independent
of each other.
In this study we have variables that with common understanding should have a dependent relationship
amongst each other. To determine whether demographic variable like gender has an impact on family
income, or gender has an impact on age of an individual, or education has an impact upon family income
or education has an impact on age; Chi square analysis can be used.
Cramer’s V- Cramer’s V is fundamentally a post-test after Chi-Square to determine the strength of

association established. While, Chi-Square points out whether two variables are co-dependent on each
other or not, Cramer’s V focuses on their intensity or level of co-dependence on each other. Cramer’s V
varies between 0 and 1. While values close to 0 indicate little association, values close to 1 show a very
strong and desirable association. The application of test was significant to the study because while Chi-
Square pointed out the dependency and association, it left out the strength of the same. And to talk about
101 respondent’s responses, the level and magnitude of association between variables was foremost.
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LIMITATIONS OF THE STUDY
The study was centrally focused in the selected region of Indore city and its nearby districts, and
therefore conclusions were drawn by giving due importance to the fact while generalizing the results.
Further, the findings of this paper may not be applicable to other regions. Due to the shortage of time and
resources available, the size of the sample had to be restricted to 101 respondents only. Also, because the
study talks about the perception of individuals towards cashless payment modes, their reluctance to
unveil information on certain topics had to be confronted. Regardless of the above stated limitations, all
efforts were carried out to ensure completeness and precision in data collection.
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RESEARCH FLOWCHART
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4. DATA ANALYSIS AND INTERPRETATION
DEMOGRAPHIC VARIABLES
The respondents of the questionnaire with respect to gender depict, there are 52.5% of the male
respondents and 47.5% of the female respondents who have contributed to the survey.
GENDER NUMBER OF
RESPONDENTS
Male 53
Female 48
Gender
Female
48% Male
52%
Figure 4.1: Graphical Representation of Gender respondents
The respondent of the questionnaire with respect to age, where 85.1% of respondent lie between 15 to 29
age group, 5.9% of the respondent lie between 30 to 39 age group, 3% of the respondent lie between 40
to 49 age group, and 1% of the respondent are above 59.
AGE GROUP NUMBER OF RESPONDENTS

15 – 29 86
30 – 39 6
40 – 49 3
50 – 59 5
Above 59 1
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Age
15 - 29 30 - 39 40 - 49 50 - 59 Above 59
1%
3%
5%
6%
85%
Respondents of the questionnaire with respect to income depict that 39.6% of the respondents are under
the income criteria of 5,00,000, 37.6% of the respondents are between the income criteria 5,00,000 –
10,00,000, 11.9% of the respondents are between the income criteria 10,00,000 – 15,00,000 and 10.9% of
the respondents are having income above 15,00,000.
INCOME NUMBER OF
REPONDENTS
Under 5,00,000 40
5,00,000 – 10,00,000 38
10,00,000 – 15,00,000 12
Above 15,00,000 11
Income
Under 5,00,000
5,00,000 - 10,00,000
10,00,000 - 15,00,000
Above 15,00,000
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FACTOR ANALYSIS
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .877
Bartlett's Test of Sphericity Approx. Chi-Square 1.316E3
Df 190
Sig. .000
The Kaiser-Meyer-Olkin test value with the help of factor analysis was calculated to be 0.877. This tells
us that there is a significant association between variables and the perception of Indian consumers about
cashless transactions. With the help of KMO test we can clearly conclude that there is a strong
association between the variables and consumer attitude. Since the KMO value of the sample is 0.877
which is more than 0.5. This indicates that the sample is adequate and feasible for factor analysis.
Alternate Hypothesis is accepted.
H0: THERE IS NO STATISTICALLY INTERELATIONSHIP BETWEEN THE VARIABLES

AFFECTNG THE PERCEPTION OF CONSUMERS ABOUT CASHLESS TRANSACTIONS.
H1: THERE IS A STATISTICALLY SIGNIFICANT RELATIONSHIP BETWEEN THE

VARIABLES AFFECTING THE PERCEPTION OF INDIAN CONSUMERS ABOUT
CASHLESS TRANSACTION.
The Bartlett’s Test of Sphericity indicated the p= 0.000. Since the p value is less than α = 0.05 (95% level
of significance), this tells us that there is statistically significant relationship between the variables and is
appropriate for the use under factor analysis. With the help of these results we can conclude that there is a
strong association between the variables and consumer perception towards cashless transactions.
Alternate Hypothesis is accepted.
H0: THERE IS NO STATISTICALLY INTERELATIONSHIP BETWEEN THE VARIABLES

AFFECTNG THE PERCEPTION OF CONSUMERS ABOUT CASHLESS TRANSACTIONS.
H1: THERE IS A STATISTICALLY SIGNIFICANT RELATIONSHIP BETWEEN THE

VARIABLES AFFECTING THE PERCEPTION OF INDIAN CONSUMERS ABOUT
CASHLESS TRANSACTION.
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Total Variance Explained
Initial Eigen values Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings
Compon Cumula
ent Total % of Variance Cumulative % Total % of Variance Cumulative % Total % of Variance ve %
1 9.440 47.200 47.200 9.440 47.200 47.200 3.991 19.953 19.95
2 1.655 8.276 55.476 1.655 8.276 55.476 3.317 16.587 36.54
3 1.333 6.663 62.139 1.333 6.663 62.139 3.147 15.733 52.27
4 1.072 5.358 67.497 1.072 5.358 67.497 3.045 15.224 67.49
5 .883 4.416 71.913
6 .829 4.147 76.060
7 .690 3.448 79.508
8 .611 3.053 82.561
9 .524 2.620 85.181
10 .448 2.242 87.422
11 .420 2.102 89.525
12 .385 1.927 91.452
13 .361 1.803 93.254
14 .310 1.552 94.807
15 .239 1.194 96.000
16 .206 1.032 97.032
17 .182 .910 97.943
18 .156 .782 98.725
19 .140 .701 99.425
20 .115 .575 100.000
Extraction Method: Principal Component Analysis.
Once we have analyzed the feasibility of the factors towards cashless payment modes, we shall now
determine the main components contributing towards this significant relationship between the variables.
On the basis of Varimax Rotation with Kaiser Normalisation, 4 factors have been extracted. Each factor
is constituted of all those variables that have factor loadings greater than that 0.5. 20 variables were
clubbed into 4 factors. 4 factors were extracted from the 20 variables used in the study. These 4 extracted
factors explained 67.497% of the variability and concluded that approximately three fourth of the
behavioural perception of respondents towards cashless transactions is due to these factors.
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Identification of the Core Factors
a
Rotated Component Matrix
Component
1 2 3 4
Learning to use cashless

payment service is easy for .845 .132 .030 .103
me.
My intention with cashless

payment services is clear .745 .232 .104 .252
and understandable.
It is easy to use cashless

.694 .266 .212 .331
payment service.
Using cashless payment

.639 .214 .477 .137
services is useful to me.
If I have the access to

cashless payment service, I .609 .263 .498 -.020
would intend to use them.
The cashless transaction

.543 .330 .104 .226
speed is important for me.
Using innovative features in

cashless payment service
.164 .776 .095 .188
influences me to purchase
various products.
Using an innovative feature

of cashless payment service, .322 .698 .105 .300
makes me happier.
People important to me think

that I should use cashless .229 .648 .157 .357
payment services.
It is expected that people like

.273 .605 .257 .201
me using payment service.

services helps me to save .418 .527 .481 -.088
time.
I intend to increase the use

of cashless transactions in .111 .115 .848 .243
future.
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I will frequently use cashless
.057 .113 .729 .401
transactions in future.

.421 .424 .581 .042
services improves my
efficiency in work.
I would strongly recommend

others to use cashless .411 .182 .561 .399
payment services.
The cashless payment

service provider is .423 .044 .019 .747
trustworthy.
The usage of cashless

payment service gives a .339 .319 .253 .700
reliable impression.
I find cashless payment

-.009 .341 .384 .654
services pleasant.
I find cashless payment

.013 .392 .319 .582
services fun and exciting.
The cashless payment

service provider keeps .277 .432 .218 .544
customers interest in mind.
Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.
We can identify the core factors contributing to the significance of variables towards cashless
transactions, with the help of the values under Rotated Factor Matrix table. The Rotated Factor Matrix
represents the rotated factor loadings, which are the correlations between the variables and the factors.
Core factors would represent the rotated factors that have been extracted from the total factors. To
identify the variables included in each factor, values with the highest contribution towards any of the four
factors, has been highlighted.
Thus by using the rotation sum of squared loadings method, we can conclude that Factor 1 accounts for
19.953% of the total variance; Factor 2 accounts for 16.587% of the variance, Factor 3 accounts for
15.733% of the variance and Factor 4 accounts for 15.224% of the variance. All the factors together
explain for 67.497% of the variance in the perception of consumers towards cashless payment mode.
39 | P a g e
Core Factors- The variables that have been included into each core factor have been named as under:
FACTOR VARIABLES INCLUDED NAME OF FACTOR

 Learning to use cashless USEFULNESS
1 payment service is easy for me.
AND EASE OF USE
 My intention with cashless
payment services is clear and
understandable
 It is easy to use cashless

payment service.
 Using cashless payment

 If I have the access to cashless

payment service, I would intend
to use them.
 The cashless transaction speed

is important for me.
2  Using innovative features in INNOVATIVENESS AND

cashless payment service SUBJECTIVE NORMS
various products.
 Using an innovative feature of

cashless payment service,
makes me happier
 People important to me think

that I should use cashless
payment services.
 It is expected that people like


services helps me to save time.
3  I intend to increase the use of BEHAVIOURAL INTENTION

cashless transactions in future.
 I will frequently use cashless
services improves my efficiency
in work.
 I would strongly recommend
others to use cashless payment
services.
40 | P a g e
4  Cashless payment service TRUST
provider is trustworthy.
 The usage of cashless

payment service gives a
reliable impression.
 I find cashless payment
services pleasant.
 The cashless payment service

provider keeps customers
interest in mind.
CONCLUSIONS OF FACTOR ANALYSIS-
FACTORS VARIABLES INCLUDED FACTOR LOADING

Usefulness and ease of use  Learning to use cashless 0.845
payment service is easy for me.
 My intention with cashless

0.745
payment services is clear and
understandable
 It is easy to use cashless 0.694

payment service.

0.639
 If I have the access to cashless

payment service, I would intend 0.609
to use them.
 The cashless transaction speed

0.543
is important for me.
Innovativeness and subjective  Using innovative features in 0.776

cashless payment service
norms
various products.
 Using an innovative feature of 0.698

cashless payment service,
makes me happier
 People important to me think

0.648
that I should use cashless
payment services.
41 | P a g e
 It is expected that people like 0.605

0.527
services helps me to save time.
Behavioural Intention  I intend to increase the use of 0.848

cashless transactions in future.
 I will frequently use cashless
0.729
 Using cashless payment 0.581
services improves my efficiency
in work.
0.561
 I would strongly recommend
others to use cashless payment
services.
Trust  Cashless payment service 0.747

provider is trustworthy.
 The usage of cashless payment 0.700

service gives a reliable
impression.
 I find cashless payment 0.654
services pleasant.
0.582
 The cashless payment service

provider keeps customers 0.544
interest in mind.
The Factor Analysis has thus identified 4 core factors that affect the perception of consumers while
adopting cashless payment modes. They can be categorized as under: -
A. USEFULNESS AND EASE OF USE

B. INNOVATIVENESS AND SUBJECTIVE NORMS
C. BEHAVIOURAL INTENTION
D. TRUST
FACTOR 1: USEFULNESS AND EASE OF USE
This factor suggests the degree of necessity fulfilment of the individual with the use of cashless payment
modes. The first factor explains 19.953% variability on the attitude of the cashless payment users. It is
42 | P a g e
necessary for the service providers to prepare such services which fulfil the perceived usefulness and
ease of use of the individual.
FACTOR 2: INNOVATIVENESS AND SUBJECTIVE NORMS
The second factor relates to the changing innovation in cashless technology as well as social and group
norms as a core factor contributing to the perception of the individual towards cashless payment use. The
factor explains 16.587% of the variability on the perception of respondents towards cashless services.
Therefore, the service providers must constantly work towards bringing new and innovative schemes for
the people to see a sustainable growth in the use of cashless services.
FACTOR 3: BAHAVIOURAL INTENTION
This variable explains 15.733% of the variability with the individual perception about cashless services.
The service provider must therefore consider analyzing the subjective probability of the individual for
conducting any particular transaction. This way they can scrutinize their focus group and formulate
effective and efficient services.
FACTOR 4: TRUST
Trust is a very important factor determining the transaction pattern of an individual towards a particular
cashless service. It contributes to 15.224% of the variability with the people perception of cashless modes
of payment. The service provider must prepare their services with propounded security and safety
features so the people feel reliable about using any cashless service from a service provider.
CHI – SQUARE TEST:
Gender*Family Income
Chi-Square Tests
Value Df Asymp. Sig. (2-sided)

a
Pearson Chi-Square 4.002 3 .261
Likelihood Ratio 4.142 3 .246
Linear-by-Linear Association 1.569 1 .210
N of Valid Cases 101
43 | P a g e
Symmetric Measures
Value Approx. Sig.
Nominal by Nominal Phi .199 .261
Cramer's V .199 .261
The Chi-Square test here indicates that p=.261. This tells us that there is no statistically significant
association between the gender and family income; and depicts that there is no interrelationship
between the gender and family income of an individual.
Phi and Cramer’s V are both tests of strong association. It can be seen here that the strength of
association between the variables is very weak and is generally not acceptable.
The null hypothesis is therefore accepted.
H0: THERE IS NO ASSOCIATION BETWEEN GENDER AND FAMILY INCOME.
H1: THERE IS ASSOCIATION BETWEEN GENDER AND FAMILY INCOME.
CHI- SQUARE TESTS
Gender*Age
Chi-Square Tests
Asymp. Sig. (2-

Value df sided)
Pearson Chi-Square 6.816a 4 .146
a. 8 cells (80.0%) have expected count less than 5. The minimum

expected count is .48.
44 | P a g e
Symmetric Measures
Value Approx. Sig.
association between Gender and Age; that is no particular age group has an inter-relationship with gender
while considering people perception towards cashless payment services.
Chi and Cramer’s V are both tests of strong association. It can be seen here that the strength of
association between the variables is weak and cannot be used for association.
The null hypothesis is therefore accepted and alternate is rejected.
H0: THERE IS NO ASSOCIATION BETWEEN GENDER AND AGE GROUP.
H1: THERE IS ASSOCIATION BETWEEN GENDER AND AGE GROUP.
Chi-square Tests-
 Education * Family Income
Chi-Square Tests
Asymp. Sig. (2-

Value df sided)
a
Linear-by-Linear Association .482 1 .488
a. 13 cells (65.0%) have expected count less than 5. The minimum

expected count is .22.
45 | P a g e
Symmetric Measures
Value Approx. Sig.
association between Education and Family Income of an individual using cashless services; this means
that educaton is not a determinant of family income.
association between the variables is weak and is only minimally acceptable.
The null hypothesis is therefore accepted.
H0: THERE IS NO ASSOCIATION BETWEEN EDUCATION AND FAMILY INCOME OF AN

INDIVIDUAL
H1: THERE IS ASSOCIATION BETWEEN EDUCATION AND FAMILY INCOME OF AN

INDIVIDUAL
Chi-square Tests-
 Education * Age
Chi-Square Tests
Asymp. Sig. (2-

Value df sided)
a
a. 22 cells (88.0%) have expected count less than 5. The minimum expected count
is .02.
46 | P a g e
Symmetric Measures
Value Approx. Sig.
The Chi-Square test here indicates that p=.000. This tells us that there is statistically significant
association between education and age; and it means that age of a particular person does have an effect
upon the education pursued.
association between the variables is moderately strong and is desirable.
The null hypothesis is therefore rejected and alternate is accepted.
H0: THERE IS NO ASSOCIATION BETWEEN EDUCATION AND AGE OF AN INDIVIDUAL.
H1: THERE IS ASSOCIATION BETWEEN EDUCATION AND AGE OF AN INDIVIDUAL.
47 | P a g e
5. CONCLUSION
FACTOR ANALYSIS-
In the preliminary stage of the factor analysis, two tests were performed to ensure that the data is suitable
for factor analysis in which the Kaiser Meyer-Olkin (KMO) measured the sample adequacy and the
Bartlett’s test of Sphericity measured the appropriateness of data. KMO value was found high (0.877)
which indicated that the data set is highly desirable for factor analysis. The Bartlett’s test of sphericity
was used to test the multivariate normality of the set of distributions and found significant value at 0.00
level of confidence. Through analysis of pre-requisite phase of factor analysis we found that the sample
and data is appropriate and adequate and also the items have large proportion of its variance accounted
by the factors which are suitable pre-requisites for factor analysis. The main contributing factors resulting
in a particular behaviour of an individual are:
1. USEFULNESS AND EASE OF USE – with 19.953% of the variability.

2. INNOVATIVENESS AND SUBJECTIVE NORMS – with 16.587% of the variability.
3. BEHAVIOURAL INTENTION – with 15.733% of the variability
4. TRUST – with 15.224% of the variability.
CHI – SQUARE AND CRAMER’S V-
NULL HYPOTHESIS RESULT (α=0.05)
There is no association between Gender and Family Accepted

Income.
There is no association between Gender and age. Accepted
There is no association between Education and Accepted
Family Income
There is no association between Education and Rejected
Age.
The table above concludes the results of the Chi-Square and Cramer’s V tests. The accepted null
hypothesis represents that the relationship at hand wasn’t statistically significant to each other, while the
highlighted rejected null hypothesis represents that the relationship at hand was statistically significant to
each other and there was a strong association and desirable association between the two variables
constituting a relationship.
48 | P a g e
6. REFERENCES
 Ninh Nguyen, Tuan Khanh Cao, Phuong Linh Dang & Hien Anh Nguyen. Predicting Consumer
Intention to Use Mobile Payment Services: Empirical Evidence from Vietnam. International
Journal of Marketing Studies; Vol. 8, No. 1; 2016 ISSN 1918-719X E-ISSN 1918-7203
http://dx.doi.org/10.5539/ijms.v8n1p117
 Theodora Zarmpou, Vaggelis Saprikis, Angelos Markos, Maro Vlachopoulou (2012). Modeling
users acceptance of mobile services. Electron Commer Res (2012) 12:225–248.
 Shamsher Singh and Ravish Rana. Study of consumer perception of digital payment mode.
Journal of Internet Banking and Commerce, December 2017, vol. 22, no. 3
 Dr. Sanjeev Padashetty and Prof. Krishna Kishore SV. An empirical study on consumer adoption
of mobile payments in Bangalore city : A case study. Journal of Arts, Science & Commerce ,E-
ISSN 2229-4686, ISSN 2231-4172.
 Chandra, S., Srivastava, S. C., & Theng, Y.-L. (2010). Evaluating the role of trust in consumer
adoption of mobile payment systems: An empirical analysis. Communications of the Association
for Information Systems, 27, 561-588.
 Mohammad Auwal Kabir, Siti Zabedah Saidin, Aidi Ahmi. Analysis of factors that influence
electronic payment adoption. Journal of Engineering and Applied Sciences 12 (Special Issue3)
6560-6568 (2017) ISSN:1816-949X
 Sindhu Singh, R.K. Srivastava, (2018) "Predicting the intention to use mobile banking in India",
International Journal of Bank Marketing, Vol. 36 Issue: 2, pp.357-378
 Mauricio S. Featherman, Paul A. Pavlou (2003) Predicting e-services adoption: a perceived risk
facets perspective. Int. J. Human-Computer Studies 59 (2003) 451–474
 Bhattacherjee, A. (2002). Individual trust in online firms: Scale development and initial
test.Journal of Management Information Systems, 19(1), 211–241.
 Cho, D. Y., Kwon, H. J., & Lee, H. Y. (2007). Analysis of trust in internet and mobile commerce
adoption. In Proceedings of the 40th Hawaii international conference on system science (HICSS).
 Pavlou, P. (2003). Consumer acceptance of electronic commerce: Integrating trust and risk with
the technology acceptance model. International Journal of Electronic Commerce, 7(3), 101–134.
 Chen, L. (2008). A model of consumer acceptance of mobile payment.International
JournalofMobile Communications, 6(1), 32–52.
 Fishbein, M., & Ajzen, I. (1975). Belief, attitude, intention and behaviour: an introduction to
theory and research. Reading: Addison-Wesley.
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APPENDIX
50 | P a g e

Minor Research Project FINAL

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Minor Research Project FINAL

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INTERNATIONAL INSTITUTE OF PROFESSIONAL STUDIES,

DEVI AHILYA VISHWAVIDHYALAYA, INDORE

MINOR RESEARCH PROJECT ON

AN EVALUATION OF THE PERCEPTION OF INDIAN CONSUMERS ON

Submitted in fulfillment of the requirements of the Master of Business Administration

PROJECT MENTOR: SUBMITTED BY:

Dr. Kapil Jain Purnika Kaul

MBA (MS) 5Yrs.

Date: May 15, 2018 Purnika Kaul

Place: Indore MBA-MS (5 years)

Dr. Kapil Jain Place: Indore

Assistant Professor Date: 15 May, 2018

S.NO PARTICULARS PAGE NUMBER

1.2 RESEARCH OUTLINE

1.2.2 Types of cashless payment modes:-

3. Online Transfer- NEFT or RTGS

4. Credit card or Debit card

9. Aadhaar Enabled Payment System

10. Unstructured Supplementary Service Data

1.2.3 Overview of Dominance of Cash in India

History of origin of a paper currency in India.

(a)High maintenance costs

(b)Financial records and tax collections

1.5 AIM and OBJECTIVE

• Are customers ready to imbibe this new modes of cashless payment?

• What is the consumption pattern of consumers towards cashless transaction methods?

• Do these factors accelerate the adoption of cashless payment solution?

2.1 Research Variables

Table 1: Conceptual definition of the research variables

RESEARCH CONCEPTUAL DESCRIPTION REFERENCE

2.1 Behavioural intention

Figure 1.1: Fishbein – Ajzen model (1975)

2.2 Perceived Usefulness

2.3 Perceived Ease of Use

2.6 Perceived Enjoyment

Figure 1.4: Mallet et al. (2009)

2.2 Review of Literature

COLLECTION OF PRIMARY DATA

TOOLS FOR ANALYSIS

Specific statistical tools used for this study include:

Cramer’s V- Cramer’s V is fundamentally a post-test after Chi-Square to determine the strength of

Figure 4.1: Graphical Representation of Gender respondents

AGE GROUP NUMBER OF RESPONDENTS

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .877

Bartlett's Test of Sphericity Approx. Chi-Square 1.316E3

Alternate Hypothesis is accepted.

H0: THERE IS NO STATISTICALLY INTERELATIONSHIP BETWEEN THE VARIABLES

H1: THERE IS A STATISTICALLY SIGNIFICANT RELATIONSHIP BETWEEN THE

Alternate Hypothesis is accepted.

H0: THERE IS NO STATISTICALLY INTERELATIONSHIP BETWEEN THE VARIABLES

H1: THERE IS A STATISTICALLY SIGNIFICANT RELATIONSHIP BETWEEN THE

1 9.440 47.200 47.200 9.440 47.200 47.200 3.991 19.953 19.95

2 1.655 8.276 55.476 1.655 8.276 55.476 3.317 16.587 36.54

3 1.333 6.663 62.139 1.333 6.663 62.139 3.147 15.733 52.27

4 1.072 5.358 67.497 1.072 5.358 67.497 3.045 15.224 67.49

5 .883 4.416 71.913

6 .829 4.147 76.060

7 .690 3.448 79.508

8 .611 3.053 82.561

9 .524 2.620 85.181

10 .448 2.242 87.422

11 .420 2.102 89.525

12 .385 1.927 91.452