CHAPTER I

1. INTRODCUTION

1.1 INTRODUCTION TO THE STUDY

Customer service isn’t just about reacting to what the customer wants. Anticipating a
customer’s needs is as important as reacting. Knowing and understanding your customer’s
SATISFACTIONs before they buy allows you to create an even stronger experience.
Adapting to customer SATISFACTIONs is about giving the customer what they want, the
way they want it, and being easy to do business with. And, that has everything to do with
creating “Customer Amazement”. With the advancement in telecommunication, electronic
payment systems are rapidly replacing the traditional modes of payment that involved
personal contact between buyers and sellers. Online payment systems entail online financial
transactions that utilize some form of a digital financial device, such as e- tokens, e-cash, and
checks.

An Online payment system facilitates the acceptance of electronic payment for online
transactions. Also known as a sample of Electronic Data Interchange (EDI), e-commerce
payment systems have become increasingly popular due to the widespread use of the internet-
based shopping and payment. Over the years, Credit cards have become one of the most
common forms of payment for online transactions. Turban et al goes on to explain that it
would be difficult for an online retailer to operate without supporting credit and debit cards
due to their widespread use.

A Smartcard is similar to a credit card; however it contains an embedded 8-bit

microprocessor and uses electronic cash which transfers from the consumers’ card to the
seller’s device. A popular smartcard initiative is the VISA Smartcard. Using the VISA
Smartcard you can transfer electronic cash to your card from your payment account, and you
can then use your card at various retailers and on the internet. There are companies that
enable financial transactions to transpire over the internet, such as PayPal. Also, the larger
mediaries further allow transactions to and from credit card accounts, although such credit
card transactions are usually assessed a fee to recoup the transaction fees charged to the
mediary.

Net payment is a well known system in India, which does not involve any sort of
physical card. It is used by customers who have accounts enabled with Internet Payment. It is

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typically seen as being safer than using credit cards, with the result that nearly all merchant
accounts in India offer it as an option.

PayPal is a global e-commerce business allowing BANKING and money transfers to

be made through the Internet. Online money transfers serve as electronic alternatives to
paying with traditional paper methods, such as cheque’s and money orders.

In underdeveloped countries the payment population is very less, especially in tier II

and tier III cities. Taking the example of India, there are more mobile phone users than there
are people with active payment accounts. Telecom operators, in such geographies, have
started offering mobile wallets which allows adding funds easily through their existing
mobile subscription number, by visiting physical recharge points close to their homes and
offices and converting their cash into mobile wallet currency.

Many payment Options such as Airtel Money and M-Pesa are being accepted as
alternate payment options on various e-commerce websites. Likewise, Alipay, Apple Pay,
Bitcoin, Chimp change LLC, eCash, Google Wallet are few more familiar forms of online
payment systems or modes that paves easy and paperless transactions.

Electronic Payment
E-payment systems, as a strategic information system, are considered one of the main
components of economic development, particularly in developing countries, and they greatly
help to reinforce the capabilities and provision of financial services. A payment system is in
fact a set of regulations that allows users to transfer money. The payment system is a
mechanism, which can transfer money from an account in a payment to an account in another
payment and therefore, its role in economy is like veins that flow money to different
economic firms. E-payment is a form of financial exchange that is done between a buyer and
a seller and electronic communication facilitates this financial exchange. On the other hand,
e-payment is defined as a payment service that uses information and communication
technologies, including cryptography and remote communication networks.

Generally, e-payment is paying money for a commodity in ecommerce, i.e. paying

money through electronic devices, particularly the internet. In performing an electronic
payment, there are at least four roles: payer, receiver, the payment serving the customer or the
financial institution issuing credit for the customer, and the payment serving the seller. E-
payment systems can be divided into three broad groups: traditional monetary transactions,
digital money, and credit debt payment. These BANKING systems have many requirements,

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such as security, acceptance, convenience, cost, control, tracking capability, and encryption
control

E-payment, as an alternative provision channel, provides many opportunities for the

growth and development of financial institutions. E-payment means providing payment
services and products through electronic channels. In other words, e-payment provide
financial services for its customers through the internet. The most important electronic
channels in e-payment are the internet, wireless communication networks, Automatic Teller
Machines (ATMs), phone payment, cell phone, fax, and sales terminal and booth. Internet
payment is considered a virtual and 24-hour branch of a payment that allows customers to
perform financial transactions free from time and location limits. E-payment allows
customers to perform different e-payment deals through the payment`s website at any time
and location and with higher speed and lower cost in comparison to the traditional method.

E-payment can be defined as the opportunity that allows customers to access payment
services without the need of physical presence in the payment and using secure mediums. E-
payment includes systems that allows customers to use payment services at three levels,
including information, communication, and transaction. E-payment minimizes
implementation costs of payment services like transportation costs, requirements, and
personnel and at the same time, maximizes wages ensued by providing different high quality
services, which maximizes BANKING` revenues.

Customer Satisfaction
Customer satisfaction and quality has long played an important role in the survival
and success in today`s competitive market. Customer satisfaction has attracted the most
attention in the marketing literature, since it has an important impact on customers` behaviors
and purchase intentions. Customer satisfaction is an emotional or cognitive reaction with a
certain focus (expectation, product, consumption experience, etc.) at a certain time (after
consumption, after selection, based on experience)]. In a credible categorization, regarding
the expected quality, customer requests are formed in three levels or layers and the realization
of each qualitative layer depends on the satisfaction of the previous one to increase persistent
customer satisfaction. These layers include basic quality (the minimum value that prevents
dissatisfaction), efficiency quality (performance necessities that ignoring them dissatisfies the
customers), and motivational quality (features that ignoring them does not dissatisfy the
customers, but realizing them by a manufacturer causes tangible customer satisfaction)

Speed and Efficiency

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 Speed in e-payment tools means for new technologies to quickly integrate with
current systems and methods to rapidly response to customers` needs and expectations. On
the other hand, the e-payment system is efficient when it performs the best operation at each
stage of the payment process. Therefore, it is necessary for users to be ensured of the
efficiency of the system, since otherwise, they will not use it. In fact, a system that has the
necessary efficiency should have the capability to process small payment processes without
suffering from costs and drawbacks. Thus, speed and efficiency mean performing the
transaction with a low time cost

Security and Trust Security

simply means defending benefits. Challenges that e-payment faces include privacy
and information security concerns. Naturally, users and commercial settings accept systems
that have high trust, since providing services and procedures by commercial units depends on
easy access and successful operations of the payment infrastructures. Therefore, we can say
that security and trust are important features in accepting epayment and e-payment and lack
of security is a great obstacle to accepting them. Thus, we can say that security in payment
systems means that the national and personal information are transformed to a form that its
disclosure to other groups is prevented and trust means whether the system is adequately
strong not to lost the transactions or the money in case of black outs, server failures, network
faults or unprecedented input from the users

Information and Accountability

The nature of responding and accountability is being committed to answering
questions and requests. The tendency of organizations to be accountable means to help
customers and provide services as promised Information is also one of the most basic levels
of internet payment. The payment introduces the services related information and its payment
operations through public or private networks. Informing and providing necessary trainings to
customers can be investigated from different angles. However, what seems most essential is
learning and training e-payment and e-payment services. The advantages of appropriate
information and providing training to customers not only reduce costs, but it can also have
social, economic, and cultural impacts, like reducing the cost of publishing bills, health, and
control
The Conceptual Model
Fig 1 presents the conceptual model of this research

Speed and Efficiency

Security and Trust 4 E-Payment Customer

Tools Satisfaction
 Accountability
Fig1. The research conceptual model

1.2 STATEMENT OF THE PROBLEM

In this fast moving world, people wouldn’t find enough time to spend on long standing
queues for making BANKING. In order to save their time and completes efficiently, they
prefer to do every payment via online. There come the online payment services, which reduce
human effort and saves nature by way of reducing or making zero use of papers.

Online payment doesn’t can be achieved by just a click. So that people can pay their
electric bills, mobile bills, shopping bills, EMI’s, insurance premiums, book tickets online,
business transactions and more. While going for pay through online people should consider
the security factors. Day to day many fraudulent cases have been witnessed through mass
Medias. Before transacting through online they should check whether it is a recognised
website or not. The consumers should aware of fraud and misleading websites or messages
seeking their account number, card number, PIN number or CVV number.

To face these security issues, people should be educated about the online payment
services and on the other there should be regulations for online BANKING prescribed by
government.
This study is to analyse how the people of Coimbatore city are preferred to online
payment services, and find out the problems faced by them while transacting online to make
life faster and effective.

1.3 OBJECTIVES OF THE STUDY

 To study SATISFACTION towards Online payment systems among the people of
Coimbatore city
 To know the familiar forms and websites of Online payment services
 To know the pros and cons of Online payment systems
 To understand the features influencing people to use online payment systems
 To study the customers expectations for better online payment services.

1.4 SIGNIFICANCE OF THE STUDY

This study will be of immense benefit to the intending and present customers of the
BANKING as it will open their eyes to the great advantages of the usage of electronic
payment and also to the payment, as the introduction and selling of this product will bring
about increase in the payment customers base, increase in deposit and as tools for favorable
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competitions in the industry. The research is equally significant because it would provide
answers to factors militating against the implementation of electronic payment in the
financial industry as a whole and also valuable tool for students, academician, institutions and
individuals that wants to know more about electronic payment system.

1.5 RESEARCH METHODOLOGY

Methodology
Research Methodology is a way to systematically solve the research problem. It may
be understood as a science of studying how research is done scientifically. So the research
methodology not only talk about the research methods but also consider the logic behind the
method we use in the context of our research study and explain why we are using a particular
method or technique or why we are not using others so that the research results are capable of
being evaluated either by the researcher himself or by others.
Research Design
The study is descriptive in nature. Descriptive studies are more than just a collection
of data they involve measurements, classifications, analysis comparisons, and interpretations.
It tells about what exists at present by determining the nature and degree of existing
conditions.

The research design taken up by me is descriptive study which gives the

characteristics associated with the people preferring online BANKING.

Source of Data
 The data that is collected for the purpose of study is been obtained from
Primary Source
 The data has been collected directly from respondents of different categories
with structured questionnaires.
 The Primary Data comprises information on “Survey of Customer’s
SATISFACTION towards online payment, with special reference to Coimbatore
City”.
 The data is been gathered from different age groups, different income groups,
gender based, educational qualification based and more, keeping in view the
objectives of the study.
 The data gathered has been put into various analysis and calculations in order
to find level of SATISFACTION and satisfaction attained by the respondents through
online BANKING.

Primary data:
The primary data were collected through structured questionnaire.

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Secondary data:
The required secondary was collected from books, magazines and web-sites.

Period of Study
 Research work was carried only for two months from February 2016 – March 2016

Sample Size
 120 respondents in the Coimbatore city have been selected as the sample for the
study.

Sampling Method
The sampling method used for this study is convenient sampling.

Sampling Techniques
The methodology followed for collecting data, selection of sample, and analysis of
data is as follows:

Data Collection Technique

The questionnaire has been designed and supplied to the respondents for collecting
primary data from customers to conduct the study.

STATISTICAL TOOLS USED

 Simple Percentage Analysis
 Chi-Square Analysis

SIMPLE PERCENTAGE ANALYSIS

The percentage method is used for comparing certain features, the collected data
represented in the form of tables and graphs in order to give effective visualization of
comparison made.

Simple percentage = No. of respondents

x 100
Sample Size
CHI-SQUARE ANALYSIS
For large sample sizes, the sampling distribution of x 2 can be closely approximated by
a continuous curve known as the chi – square distribution.

Hypothesis test in which the sampling distribution of the test statistic is a chi-square
distribution when the null hypothesis is true.
χ 2 = ∑ (O-E) 2

E
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1.6 LIMITATIONS OF THE STUDY
Just like coin has two sides, there have been limitations because of which the survey
may not be indicative of the views of the target population. A few of these have been
mentioned below.
 The sample size used for this research is very meagre as compared to the
population.
 The targeted area for survey is limited to the Coimbatore City.
 The respondents of all categories are not at same numbers
 The respondents information might be false or inaccurate or biased
 The sample of the respondents chosen for the study might not be
representative.
 Analysis of the proposed aspects might differ depending on the tools and
techniques used.

1.7 CHAPTER SCHEME

 Chapter I
This chapter demonstrates an introduction to the study, the statement of the
problems, objectives, Significance, research methodology and limitations of the study.

 Chapter II
This chapter summarizes the literature available in the field of “Customer
SATISFACTION towards online BANKING” by keep in mind the service provides and
their policies, guarantees, flexibility and simplicity of the service.

 Chapter III

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 This chapter constitutes the history of online payment systems, profile of
various service providers and their pros and cons

 Chapter IV
This chapter analyses the research in systematic manner with the suitable
interpretations with diagrammatic presentation and discussions.

 Chapter V
The final chapter renders the summary of findings, recommendations,
conclusions, managerial implications, and recommendations for future development for
better service.

CHAPTER II
REVIEW OF LITERATURE

Simon and Victor (1994) examined the reasons why ATM card holders accept or
reject EFTPOS and how they viewed the risk of EFTPOS when compared to credit and cash.
The authors signified that more marketing research and consumer participation was needed in
designing and introducing e-payment services so as to gain more user acceptance. They
signified that in order to reduce fears in the minds of people regarding security, it was
required to introduce risk reduction techniques such as money back guarantee, live
demonstration and free trial to reduce psychological, financial and time loss risk. The
researchers suggested that to prove e-payment methods more successful, it should be based
on proper marketing risk, prompt service support, sufficient legal protection and awareness.

Krishnan (2001) examined the evolution of E-payment in Malaysia and analyzed the
various electronic delivery channels used by local banks to assess the consumer reaction to
these delivery channels. The objective of the study was to present progressive development of
e-payment, electronic delivery channels and some pertinent issues for successful
implementation of E-payment. The study was based on a sample of 300 bank customers, and
revealed that 90 per cent of respondents visit their bank branches at least once every month,

9
63.3 per cent customers indicated four or more visits to ATMs every month, 20 per cent of the
respondents were using tele-payment services. Only 6.7 per cent customers indicated that
they would not be interested at all using these services. The results showed that among
different channels of e-payment like mobile payment, internet payment, ATM’s, PC payment;
ATMs were widely accepted by the people. The researcher also found that bank branches and
interaction with human tellers were still important. 60 per cent of the respondents had internet
access at home and it presents a positive indication of PC payment in future. The author
concluded that for successful implementation of e-payment, the major pre-requisites were
legal and physical infrastructure because e-payment requires a lot of tangible and
technological changes in banks.

Karjaluoto (2002), in his paper made an attempt to determine those factors that
influence the formation of consumer attitude toward electronic payment. The author studied
that how attitude towards technology in general impact on consumer behavior in an IT
environment. The author identified the beliefs, attitudes and intention of consumer towards
e-payment by means of 30 in-depth interviews and a mailed questionnaire in Finland. The
results of the study indicated that educated and relatively wealthy segment use more
electronic payment services. The author also recognized that a negative attitude toward
technology, valuing personal service and demographic characteristic were found to be the
most substantial barrier in adoption of electronic payment in Finland.

Singh and Singh (2002) described that technology has provided customers new ways
of delivering the products. Banks began to look e-payment as a mean to replace traditional
payment. E-payment products and services like ATM, EFT were a source of differentiation
for all the banks. The researchers analyzed the revised technology adoption life cycle model.
Customers were divided into five categories that are innovators, visionaries, pragmatists,
conservatives and skeptics and application of technology and marketing of payment services
was done on that basis. The authors explained that the banks required a dynamic strategic
technique for adoption of innovative technology. As customers became more sophisticated, it
becomes imperative for the banks to consider the use of technology to respond to the
continuous changing requirement.

Ibbotson and Moran (2003) evaluated the increased use of electronic payment
channels by small and medium enterprise (SME) payment customers. The level of usage and
satisfaction with electronic payment channels in the Northern Ireland was studied. The
objective of the study was to judge the relationship between banks and their small corporate
10
clients and the growing use of internet as a delivery channel for financial services. The results
of the study indicated that the level of satisfaction with e-banks was quite high according to
those customers who were using telephone, PC and internet payment. However, some
enterprises were already in the process of delivery and also seem to be satisfied with the use
of electronic channel of delivery. But the findings of the study highlighted the need for
further investigation of potential adoption of e-payment by SME payment clients in Northern
Ireland.

Li and Worington (2004) described the connectivity between the adoption rate of
internet payment and electronic connectivity. The researchers reported that electronic
connectivity was discussed through three components: personal computer connectivity,
internet connectivity and mobile connectivity. The researchers used regression to analyze the
relationship. The results of the study indicated that changes in the electronic connectivity had
a significant impact on the adoption rate of internet payment. The results also indicated that
proportion of internet payment customers would increase at various speeds relative to the
increase in internet connectivity, PC connectivity and mobile connectivity. This might help
banks to predict their future base of internet payment customers and thus an appropriate
marketing effort towards internet payment.

Pikkarainen et al. (2004) highlighted that electronic payment technology had created
new ways of handling daily payment affairs especially via online payment channel. The
authors adopted technology acceptance model to leverage the online environment. The model
indicated online payment acceptance among private payment customers in Finland through a
sample survey. The findings of the study indicated that perceived usefulness, information on
online payment, security and privacy, quality of service, ease of use on the website were the
main factors influencing online payment acceptance. The authors suggested that banks should
now more concentrate on their epayment issues so that online payment could become more
popular and adaptive for customers.

Singh (2004) examined the impact of online payment and internet payment. The
objective of the study was to find who uses internet, why and where. It also examined the
respondents’ reasons for not using payment online. The data was collected from two
universities of Kwazunatal. The researcher analyzed that males use more internet payment
than females. Main services used through websites were inter-account transfer, paying
accounts, checking balance/ statement, communication with the banks, etc. Security was the
main issue for not using payment online. The author suggested that to make online payment
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more adaptive, websites should be more attractive, more informative and colourful. Training
should be given to customers. Charges of online facilities should also be less. Banks should
advertise and publicize their new products and services offered on the websites so as to make
internet payment more popular among customers.

Erickson et al. (2005) studied the technology acceptance of internet payment in

Estonia. The objective of the study was to see that to what extent customers accept internet
payment as a tool for the satisfaction. The findings of the study suggested that internet
payment proved to be beneficial for the customers. However, banks need to put much efforts
not only into making a user friendly internet bank, but also to explain their customers how the
internet bank was useful to them.

Kassim (2005) explored the growing needs and expectations of the consumers in
Qatar. Due to competition, the banks had to offer a broader range of products and services at
more competitive prices through more efficient and convenient channels. The study
investigated the discrepancy between customer expectation and perception toward E-payment
services. The author compared the expected and perceived value of E-payment services
through mean responses which showed that largest discrepancies were found in the
availability of instructions and personnel assistance on how to use e-payment services and
functionality. The author concluded that to increase overall service quality of Epayment,
management and employees should find out what customers expect in terms of procedure
handling, efficiency, accessibility and updated information about products and services.

Lassar et al. (2005) explored the relationship between consumer innovativeness and
self-efficiency on the internet, online payment adoption and electronic commerce. To
understand the relationship, they used technology adoption model (TAM) which suggested
that use of technology based system totally depends upon the consumers feeling and attitude
towards it. The findings of the study suggested that level of consumers’ innovations matters
when it comes to adapting and utilizing e-payment products and procedures. The results
showed that products like telephone payment, EFT,online payment required active consumer
role in using the product, while in bill payment, consumer needs only set up process initially
and then monitor on a semi-regular basis. The author concluded that banks offering e-
payment need to recognize the importance of consumer innovation characteristics so that
consumer can be well benefited.

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 Wan et al. (2005) evaluated the adoption of four major payment channels i.e. branch
payment, ATM, telephone payment and internet payment in Hong Kong banks They also
highlighted the influence of demographic variables and psychological variables in adopting
the distribution channels. The results of the study indicated that among four channels, ATM
was most frequently used followed by internet payment and branch payment. Telephone
payment was the least adopted payment channel. Customers adopted these channels because
of safety, security, convenience and speediness offered by them. The researchers suggested
that banks should improve their website designs and navigations, strengthen website security,
allow more ways in which customers could check the accuracy of their transactions and
provide more useful financial information in a well organized manner.

Boatang (2006) explored some of the issues that affected the key decisions of banks
while adopting e-payment techniques. The decisions were related to entering epayment, e-
payment channel choice, customers and managing conflicts. The findings of the study
indicated operational constraints related to customer location, the need to maintain customer
satisfaction and the capabilities of the banks. The author pointed out the need for African
banks to understand customer needs, corresponding service to offer, the resources and
partnership required to offer it, and develop appropriate e-payment strategies that maximized
value for both customer and banks.

Chalam and Nageswara (2006) focused that as the computer touched each and every
aspect of the economy, so payment sector was not an exception to it. The objective of the
study was to find out change in payment sector through the techniques of epayment. The
authors evaluated several e-payment products like ATM, EFT, ECS, EDI, telepayment, etc. E-
payment had benefited to the individual through anywhere, anytime payment; to traders and
merchants through immediate settlement of payment; to banks through unlimited network,
online payment, attracting and retaining the customers, debit and credit card facilities; and to
the nation through globalization of trade, more exports, more transparency in business, etc.
The researchers concluded that emerging challenge in e-payment was due to lack of
awareness among people, no cyber laws by government and low density of telephone lines
and low computerization of payment activities. They recommended that banks should adopt
hardware and software security measures, appoint skilled personnel and adoption of digital
signature certification authority so as to tackle the major challenges in e- payment.

Flavian et al. (2006) explored how customers’ perception of traditional bank

influence their decision to adopt the services of the internet. The researchers found that if the
13
customer trusts in brick and mortar bank then it was possible that they feel more motivated to
use the online services offered by the same bank due to trustworthiness of the customer in the
traditional payment system. The results of the study suggested that to use internet payment;
trust, income, age, sex, education and employment were the most affecting factors for the use
of online payment services and the banks can reduce their costs and widen their market
through online payment adoption.
Gan et al. (2006) examined consumer choices between electronic payment and non-
electronic payment in New Zealand. The authors evaluated that decision to use electronic
payment was hypothesized to be a function of service quality, perceived risk factors, price
factors, service product characteristics, individual factors and demographic variables. The
findings showed that service quality, perceived risk factors, user input factors, employment
and education were the dominant variables that influence consumers choice of electronic
payment channels. The authors observed that consumer use e-payment because of its
suitability, convenience and reliability.

Lichtenstein and Williamson (2006) in their research article gave an outlook as to

how and which specific factors affect the consumer decision, whether or not to choose
internet payment services in the Australian context. The findings of the study brought out that
convenience was the main motive for customer to bank on the internet, while there was a
range of other influential factors that may be modulated by banks. The research suggested
that banks will be able to manage consumer experiences with moving to internet payment
only if they understood that such experience involves a process of adjustment and learning
over time, and not merely the adoption of new technology.

Nelubiri and Sinti (2007) examined the impact of internet payment on customers’
attitude, their needs and behaviour. The objective of the study was to see the internet payment
adoption in Malaysia. The authors used five perceived attributes that is relative advantage,
compatibility, complexity, trialability and absorbability for IB adoption. The results of the
study indicated that for better understanding of internet payment acceptance, it was very
necessary to observe customer attitude and perception towards internet payment. So, the
banks should adopt such internet payment facilities which could enhance processing of
transaction, inter-activity and customization.

Robbins (2008) tried to evaluate whether the adoption of e-payment by the banks
affected the importance of bank location. The study looked into the state of consumer
adoption of e-payment products and growth of e-payment products since 1995. The study

14
also investigated whether consumer choice had changed as a result of increased epayment use
and how banks had responded. The study also questioned why location was still important
today. The author focused that e-payment was not a perfect substitute of physical presence of
banks in the market. Consumers want the convenience of e-payment products but only of
those banks which fall close to their place. So, the location of a bank branch and electronic
payment were complementary to each other.

Walter (2008) evaluated why people use or choose technology enabled services like
internet payment, telephone bill paying and internet shopping service. The author used a
behavioural model for the study. The findings of the study showed that customers’ adoption
rate to use internet and telephone payment was influenced by their willingness to use service,
their personal capacity to engage in the service, the risks and advantage involved in the
services. The paper also brings out depict that while choosing technology enabled services,
customers want convenience, time saving, faster service and security. The author concluded
that for more use of technology enabled services, it should make more customers friendly,
reduce the system complexity and undue waiting time involved in the service handling.

Laukkanen (2009) highlighted the attributes in multi-channel electronic payment.

The main objective of the study was to understand the diverse retail channel
SATISFACTION of online bank customers by examining their channel attribute
SATISFACTIONs in electronic payment. For the research purpose, the author divided the
customers into two groups those who pay their bills over the internet, and those who use a
mobile phone for the service. With the help of Conjoint analysis, the results of the study
revealed that internet and mobile users differ in their SATISFACTIONs towards electronic
channels attributes in bill paying. It was found that screen size followed by location and
response time were the most important attributes for internet users. However, locations
followed by screen size and response time were the most important attributes for mobile
users. The author concluded that banks and producers should diversify consumer group so
that the use of electronic payment techniques and services could be increased.

Liao and Wong (2010) empirically explored the major considerations associated with
internet-enabled e-payment systems and systematically measured the determinants of
customer interactions with e-payment services. In order to study customers’ interaction with
internet payment, the respondents were asked to explain the extent of using internet payment
services. The results suggested that perceived usefulness, ease of use, security, convenience
and responsiveness to service requests significantly explained the variation in customer
15
interactions. Exploratory factor analysis and reliability test indicated that these constructs
were relevant and reliable. Confirmatory factor analysis confirmed that they possessed
significant convergent and discriminatory validities. Both perceived usefulness and perceived
ease of use have significant impact on customer interactions with e-payment services.
Perceived security, responsiveness and convenience also represented the primary avenues
influencing customer interactions. In particular, stringent security control was critical to e-
payment operations. The findings had managerial implications for enhancing extent of e-
payment operations and developing iable e-payment systems and services.

Deshmukh et al. (2011), The Secure Electronic Transaction (SET) protocol

specifically handles electronic BANKING. Fraud prevention is a primary motivator behind
SET. That would seem to indicate that the current model of using SSL to protect transactions
is adequate. SET has the potential to reduce the chance of fraud by providing rigorous
authentication measures in addition to encrypting transactions. SET provides a high degree of
privacy for customers by encrypting payment information so that only the payment can see it.

Deshmukh et al.(2012), All parties require the ability to make or receive BANKING
whenever necessary. Payment transactions must be atomic: They occur entirely or not at all,
but they never hang in an unknown or inconsistent state. No payer would accept a loss of
money (not a significant amount, in any case) due to a network or system crash. Availability
and reliability presume that the underlying networking services and all software and hardware
components are sufficiently dependable

These are Safety, Security, Soundness and Efficiency. Called the ‗Triple-S + E‘
principle in short, each of the principles, which have a synergistic inter-relationship, would
specifically address the following: -Safety will relate to addressing risk, so as to make the
systems risk free or with minimal risk. - Security will address the issues relating to
confidence, with specific reference to the users of these systems. - Soundness will be aimed
at ensuring that the systems are built on strong edifices and that they stand the test of time. -
Efficiency will represent the measures aimed at efficiencies in terms of costs so as to provide
optimal and cost effective solutions.

Ms Vaishnavi, Sapna S kaushik (2013) Electronic payment systems are central to

on-line business process as companies look for ways to serve customers faster and at lower
cost. Emerging innovations in the payment for goods and services in electronic commerce
promise to offer a wide range of new business opportunities. Electronic payment systems and

16
e-commerce are highly linked given that on-line consumers must pay for products and
services. Clearly, payment is an integral part of the mercantile process and prompt payment is
crucial. If the claims and debits of the various participants (consumers, companies and
BANKING) are not balanced because of payment delay, then the entire business chain is
disrupted. Hence an important aspect of ecommerce is prompt and secure payment, clearing,
and settlement of credit or debit claims.

Uday Ghatge, Aditya Thatte et al, (2014), the shortage of small coin change in India
over the last decade has been primarily triggered by an insufficient supply and mass blocking
of coins by a black market. The shortage results in significant loss for businesses which pay
premiums to procure coins, and for customers when business owners return ‘goodies’, e.g.
candies to the customer instead of small change. This paper presents “Missed Call Money”
(MCM),a concept of mobile phone based ‘coin wallet’ to overcome this economic problem in
India. Merchants as well as consumers would sign up for MCM so they can make small coin
BANKING using a unique, secure, and easy to use mobile based solution.

Economics week (Atlanta, GA) (2015), has announced the addition of the "Global
Online Payment Methods: First Half 2015"Around the world, the online and mobile
BANKING environments remain dynamic. The number of online payment users is growing
rapidly in emerging markets, having reached over 300 million in China alone by the end of
last year. The volume of online BANKING made through third-party providers grew by
almost one half in 2014. Mobile BANKING are developing even more rapidly: in Nigeria, for
example, mobile payment transactions grew more than ten-fold. Another observed shift
happening is the diminishing share of cash on delivery in some emerging markets, as credit
cards and alternative online payment methods rise. For example, in Russia, 2014 was the first
year that payment card overtook cash on delivery as the payment method most used by online
shoppers. Also, notable regulatory shifts are taking place. For example, in Japan authorities
have been considering a change in rules to enable BANKING to compete better in the online
BANKING market.

CHAPTER III
PROFILE OF THE ONLINE PAYMENT SYSTEMS
INTRODUCTION:

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 Payment and settlement systems in India are regulated by the Payment and Settlement
Systems Act, 2007 (PSS Act), legislated in December 2007.The Reserve Payment of
India continually strives towards ensuring the smooth progress of the BANKING system. In
India it is the BPSS (Board for Regulation of Payment and Settlement Systems) which is in
charge of regulating these systems.

India has multiple BANKING and settlement systems. RBI Still continues to evolve
new payment methods and slowly revamping the BANKING and settlement capability in
India. India supports a variety of electronic BANKING and settlement system, both Gross as
well as Net settlement systems.
The Gross systems is
 Real Time Gross Settlement (RTGS)

The Net settlement systems are;

 ECS - Credit
 ECS - Debit
 Credit cards and Debit cards
 National Electronic Fund Transfer (NEFT)
 Indo-Nepal Remittance Facility Scheme
 Immediate Payment Service

Electronic Payment and Settlement Systems in India:

The Reserve Payment of India is doing its best to encourage alternative methods of
BANKING which will bring security and efficiency to the BANKING system and make the
whole process easier for BANKING. The Indian payment sector has been growing
successfully, innovating and trying to adopt and implement electronic BANKING to enhance
the payment system. Though the Indian payment systems have always been dominated by
paper-based transactions, e-BANKING are not far behind. Ever since the introduction of e-
BANKING in India, the payment sector has witnessed growth like never before.
According to a survey by Celent, the ratio of e-BANKING to paper based transactions
has considerably increased between 2004 and 2008. This has happened as a result of
advances in technology and increasing consumer awareness of the ease and efficiency of
internet and mobile transactions.

In the case of India, the RBI has played a pivotal role in facilitating e-BANKING by
making it compulsory for BANKING to route high value transactions through Real Time
Gross Settlement (RTGS) and also by introducing NEFT (National Electronic Funds
Transfer) and NECS (National Electronic Clearing Services) which has encouraged

18
individuals and businesses to switch to electronic methods of payment. With the changing
times and technology so have changed the methods of BANKING in India. E-BANKING in
India have been growing at a fast rate of 60% over the last 3 years.

In India ‘plastics’ have been fast over-taking ‘papers’. With 130 million cards in
circulation currently, both credit and debit, and an increasing consumer base with disposable
income, India is clearly one of the fastest growing countries for payment cards in the Asia-
Pacific region. Behavioral patterns of Indian customers are also likely to be influenced by
their internet accessibility and usage, which currently is about 32 million PC users, 68% of
whom have access to the net. However these statistical indications are far from the reality
where customers still prefer to pay "in line" rather than online, with 63% BANKING still
being made in cash. E-BANKING have to be continuously promoted showing consumers the
various routes through which they can make these BANKING like ATM’s, the internet,
mobile phones and drop boxes.

Due to the efforts of the RBI and the BPSS now over 75% of all transaction volume are
in the electronic mode, including both large-value and retail BANKING. Out of this 75%,
98% come from the RTGS (large-value BANKING) whereas a meagre 2% come from retail
BANKING. This means consumers have not yet accepted this as a regular means of paying
their bills and still prefer conventional methods. Retail BANKING if made via electronic
modes are done by ECS (debit and credit), EFT and card BANKING.

CONSUMER SATISFATION
Consumer satisfaction is the degree of satisfaction provided by the goods and services
of a company as measured by the number of repeat customers. It is a marketing term that
measures how products or services supplied by a company meet or surpass a customer’s
expectation. It is very important. Because,

 It provides marketers and business owners with a metric they can use to manage and
improve their businesses.
 It is a point of differentiation.
 It reduces customer churn.
 It increases customer life time value.
 It reduces negative word of mouth.
 It is cheaper to retain customers than acquire new ones.
It is a leading indicator of consumer repurchases intention and loyalty.

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Electronic Clearing Service (ECS Credit)
Known as "Credit-push" facility or one-to-many facility this method is used mainly
for large-value or bulk BANKING where the receiver’s account is credited with the payment
from the institution making the payment. Such BANKING are made on a timely-basis like a
year, half a year, etc. and used to pay salaries, dividends or commissions. Over time it has
become one of the most convenient methods of making large BANKING

Known as many-to-one or "debit-pull" facility this method is used mainly for small
value BANKING from consumers/ individuals to big organizations or companies. It
eliminates the need for paper and instead makes the payment through BANKING/corporates
or government departments. It facilitates individual BANKING like telephone bills,
electricity bills, online and card BANKING and insurance BANKING. Though easy, this
method lacks popularity because of lack of consumer awareness.

Credit cards and Debit cards

As mentioned above India is one of the fastest growing countries in the plastic money
segment. Already there are 130 million cards in circulation, which is likely to increase at a
very fast pace due to rampant consumerism. India’s card market has been recording a growth
rate of 30% in the last 5 years. Card BANKING form an integral part of e-BANKING in
India because customers make many BANKING on their card-paying their bills, transferring
funds and shopping.

Ever since Debit cards entered India, in 1998 they have been growing in number and
today they consist of nearly 3/4th of the total number of cards in circulation.

Credit cards have shown a relatively slower growth even though they entered the
market one decade before debit cards. Only in the last 5 years has there been an impressive
growth in the number of credit cards- by 74.3% between 2004 and 2008. It is expected to
grow at a rate of about 60% considering levels of employment and disposable income.
Majority of credit card purchases come from expenses on jewelry, dining and shopping.

Another recent innovation in the field of plastic money is co-branded credit cards,
which combine many services into one card-where BANKING and other retail stores,
airlines, telecom companies enter into business partnerships. This increases the utility of

20
these cards and hence they are used not only in ATM’s but also at Point of sale (POS)
terminals and while making BANKING on the net.

Real-time gross settlement

The acronym 'RTGS' stands for real time gross settlement. The Reserve Payment of
India (India's Central Payment) maintains this payment network. Real Time Gross
Settlement is a funds transfer mechanism where transfer of money takes place from one
payment to another on a 'real time' and on 'gross' basis. This is the fastest possible money
transfer system through the payment channel. Settlement in 'real time' means payment
transaction is not subjected to any waiting period. The transactions are settled as soon as they
are processed. 'Gross settlement' means the transaction is settled on one to one basis without
bunching with any other transaction. Considering that money transfer takes place in the books
of the Reserve Payment of India, the payment is taken as final and irrevocable.
Fees for RTGS vary from payment to payment. RBI has prescribed upper limit for the
fees which can be charged by all BANKING both for NEFT and RTGS. Both the remitting
and receiving must have core payment in place to enter into RTGS transactions. Core
Payment enabled BANKING and branches are assigned an Indian Financial System
Code (IFSC) for RTGS and NEFT purposes. This is an eleven digit alphanumeric code and
unique to each branch of payment. The first four letters indicate the identity of the payment
and remaining seven numerals indicate a single branch. This code is provided on the cheque
books, which are required for transactions along with recipient's account number.

RTGS is a large value (minimum value of transaction should be ₹2,00,000) funds

transfer system whereby financial intermediaries can settle interpayment transfers for their
own account as well as for their customers. The system effects final settlement of
interpayment funds transfers on a continuous, transaction-by-transaction basis throughout the
processing day. Customers can access the RTGS facility between 9 am to 4:30 pm
(Interpayment up to 6:30 pm) on weekdays and 9 am to 2:00 pm (Interpayment up to 3:00
pm) on Saturdays. However, the timings that the BANKING follow may vary depending on
the payment branch. Time Varying Charges has been introduced on 1 October 2011 by RBI.
The basic purpose of RTGS is to facilitate the transactions which need immediate access for
the completion of the transaction.

BANKING could use balances maintained under the cash reserve ratio (CRR) and the
intra-day liquidity (IDL) to be supplied by the central payment, for meeting any eventuality

21
arising out of the real time gross settlement (RTGS). The RBI fixed the IDL limit for
BANKING to three times their net owned fund (NOF).

The IDL will be charged at ₹25 per transaction entered into by the payment on the
RTGS platform. The marketable securities and treasury bills will have to be placed as
collateral with a margin of five per cent. However, the apex payment will also impose severe
penalties if the IDL is not paid back at the end of the day.

The RTGS service window for customer's transactions is available from 8:00 hours to
19:00 hours on week days and from 8:00 hours to 13:00 hours on Saturdays. No Transaction
on weekly holidays and public holidays.

Service Charge for RTGS

a) Inward transactions – no charge to be levied.
b) Outward transactions –
For transactions of ₹2 lakhs to ₹5 lakhs -up to ₹25 per transaction plus applicable Time
Varying Charges (₹1/- to ₹5/-); total not exceeding ₹30 per transaction, (+ Service Tax).-
Above ₹5 lakhs - ₹50 per transaction plus applicable Time Varying Charges (₹1/- to ₹5/-);
total charges not exceeding₹55 per transaction, (+ Service Tax). No time varying charges are
applicable for RTGS transactions settled up to 1300 hrs.

National Electronic Funds Transfer (NEFT)

Started in Nov.-2005, the National Electronic Fund Transfer (NEFT) system is a
nationwide system that facilitates individuals, firms and corporates to electronically transfer
funds from any payment branch to any individual, firm or corporate having an account with
any other payment branch in the country. It is done via electronic messages. Even though it is
not on real time basis like RTGS (Real Time Gross Settlement), hourly batches are run in
order to speed up the transactions.

For being part of the NEFT funds transfer network, a payment branch has to be NEFT-
enabled. NEFT has gained popularity due to it saving on time and the ease with which the
transactions can be concluded. As at end-January 2011, 74,680 branches / offices of 101
BANKING in the country (out of around 82,400 payment branches) are NEFT-enabled. Steps
are being taken to further widen the coverage both in terms of BANKING and branches
offices.

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Indo-Nepal Remittance Facility Scheme
Indo-Nepal Remittance Facility is a cross-border remittance scheme to transfer funds
from India to Nepal, enabled under the NEFT Scheme. The scheme was launched to provide
a safe and cost-efficient avenue to migrant Nepalese workers in India to remit money back to
their families in Nepal. A remitter can transfer funds up to ₹50,000 (maximum permissible
amount) from any of the NEFT-enabled branches in India. The beneficiary would receive
funds in Nepalese Rupees.

Immediate Payment System (IMPS)

Immediate Payment Service (IMPS) is an initiative of National BANKING
Corporation of India (NPCI). It is a service through which money can be transferred
immediately from one account to the other account, within the same payment or accounts
across other BANKING. Upon registration, both the individuals are issued an MMID (Mobile
Money Identifier) Code from their respective BANKING. This is a 7 digit numeric code. To
initiate the transaction, the sender in his mobile payment application need to enter the
registered mobile number of the receiver, MMID of the receiver and amount to be
transferred. Upon successful transaction, the money gets credited in the account of the
receiver instantly. This facility is available 24X7 and can be used through mobile payment
application. Some BANKING have also started providing this service through internet
payment profile of their customers. Though most BANKING offer this facility free of cost to
encourage paperless payment system, ICICI payment and Axis payment charge for it as per
their respective NEFT charges.

Nowadays, money through this service can be transferred directly also by using the
receiver's payment account number and IFS code. In such case, neither the receiver of the
money need to be registered for mobile payment service of his payment, nor does he need
MMID code. IMPS facility differs from NEFT and RTGS as there is no time limit to carry
out the transaction. This facility can be availed 24X7 and on all public and payment holidays
including RBI holidays.

Bharat Bill Payment System

Bharat Bill Payment System (BBPS) is an integrated bill payment system
in India offering interoperable and accessible bill payment service to customers through a
network of agents, enabling multiple payment modes, and providing instant confirmation of
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payment. This is still in implementation stage. Guidelines for implementation of this system
were issued on November 28, 2014.

Comparison
The key difference between RTGS and NEFT is that while RTGS is on gross settlement
basis, NEFT is on net settlement basis. Besides, RTGS facilitates real-time ("push") transfer,
while NEFT involves twelve settlements from 8 am to 7 pm on week days and six settlements
from 8 am to 1 pm on Saturdays. Customers can access the RTGS facility between 9 am to
4:30 pm on weekdays and 9 am to 1:30 pm on Saturday. Thus if a customer has given
instruction to its payment to transfer money through NEFT to another payment in the
morning hours, money would be transferred the same day, but if the instruction is given much
later during the day, money may be transferred next day.

RTGS facility is available in over 1,13,000 branches across India, while NEFT is available in
little over 1,15,000 branches of a 100 BANKING.

Channels of e-BANKING
In their effort to enable customers to make BANKING the electronic way BANKING
have developed many channels of BANKING viz. the internet, mobiles, ATM’s (Automated
Teller Machines) and drop boxes.

The internet as a channel of payment is one of the most popular especially among the
youth. Debit and credit BANKING are made by customers on various payment’s websites for
small purchases, (retail BANKING) and retail transfers (ATM transfers).

ATM’s serve many other purposes, apart from functioning as terminals for
withdrawals and balance inquiries, such as payment of bills through ATM’s, applications for
cheque books and loans can also be made via ATM’s.

BANKING also provide telephone and mobile payment facilities. Through call agents
BANKING can be made and as the number of telephone and mobile subscribers are expected
to rise, so is this channel of payment expected to gain popularity.

Drop boxes provide a solution to those who have no access to the internet or to a
telephone or mobile. These drop-boxes are kept in the premises of BANKING and the
customers can drop their bills along with the bill payment slips in these boxes to be collected
by third party agents.

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Role of the RBI in encouraging e-BANKING
As the apex financial and regulatory institution in the country it is compulsory for the
RBI to ensure that the BANKING system in the country is as technologically advanced as
possible and in view of this aim, the RBI has taken several initiatives to strengthen the e-
BANKING system in India and encourage people to adopt it.
The Payment and Settlement Systems Act, 2007 was a major step in this direction. It
enables the RBI to "regulate, supervise and lay down policies involving payment and
settlement space in India." Apart from some basic instructions to BANKING as to the
personal and confidential nature of customer BANKING, supervising the timely payment and
settlement of all transactions, the RBI has actively encouraged all BANKING and consumers
to embrace e-BANKING.

In pursuit of the above-mentioned goal the RBI has granted NBFC’s (Non-Payment
Financial Companies) the permission to issue co-branded credit cards forming partnerships
with commercial BANKING.

The Kisan Credit Card Scheme was launched by NABARD in order to meet the credit
needs of farmers, so that they can be free of paper money hassles and use only plastic money.

A domestic card scheme known as Rupay has recently been started by the National
BANKING Corporation of India (NPCI), promoted by RBI and Indian BANKING
Association (IBA), inspired by Union pay in China, which will be promoting the use of cards
i.e. "Plastic money". Initially functioning as an NPO, Rupay will focus on potential
customers from rural and semi-urban areas of India. Rupay will have a much wider coverage
than Visa, MasterCard or American Express cards which have always been used for card-
based settlements.

The NREGA (National Rural Employment Guarantee Scheme) introduced by the

Government will ensure rural employment in turn ensuring that the employees get wages.
Each employee will have a smart card functioning as his personal identification card, driver’s
license, credit card which will also function as an electronic pass book, thus familiarising the
rural populations with e-BANKING.

However, the Indian payment system suffers from some defects due to certain socio-
cultural factors which hampers the spread of the e-BANKING culture even though there are
25
many effective electronic payment channels and systems in place. Despite the infrastructure
being there nearly 63% of all BANKING are still made in cash. A relatively small percentage
of the population pays their bills electronically and most of that population is from urban
India-the metropolitans. Also in some cases the transaction is done partially online and
partially "offline". The main reason for this apathy to switch to e-BANKING comes from
lack of awareness of the customer despite various efforts by the Government.

Electronic Bill Payment:

Electronic bill payment is a feature of online, mobile and telephone payment, similar
in its effect to a gyro, allowing a customer of a financial institution to transfer money from
their transaction or credit card account to a creditor or vendor such as a public
utility, department store or an individual to be credited against a specific account. These
BANKING are typically executed electronically as a direct deposit through a
national payment system, operated by the BANKING or in conjunction with the government.
Payment is typically initiated by the payer but can also be set up as a direct debit.

In addition to the bill payment facility, most BANKING will also offer various features
with their electronic bill payment systems. These include the ability to schedule BANKING
in advance to be made on a specified date (convenient for installments such as mortgage and
support BANKING), to save the biller information for reuse at a future time and various
options for searching the recent payment history. In many cases the payment data can also be
downloaded and posted directly into the customer's accounting or personal finance software.

IMPACT
From the consumers’ point of view, electronic payment of bills is cheaper, faster, and
more convenient than writing, posting and reconciling cheques. In addition, though
limitations exist, a wider range of payment accounts or credit cards can be used for the
electronic payment of bills.

Using electronic bill presentment and payment enables businesses to fast-track

customer BANKING and get access to funds faster, which in turn results in cash flow
improvement. For BANKING the advantages of electronic bill BANKING are a reduction in
processing costs minimizing paperwork and an increase in customer loyalty. In a 2003 study,
the BANKING said that "customers who pay online show more loyalty and are more
receptive to other offers". Although this technology was available from the mid-1990s,
uptake was initially slow until internet access by households increased. By 2000, adoption of
electronic bill payment systems started to dramatically increase.
26
Security
Over the years, the industry leaders in internet business transactions have worked
together to create a complex system for ensuring online payment security. This system
guarantees that consumers receive the goods for which they pay, and ensures that confidential
information, such as transactions and account numbers, remain safe and secure.

E-commerce, with the integration of the internet, supports technologies that improve
electronic data interchanges, mobile technology, online transaction processing, automated
data collection, electronic funds transfers, internet marketing, inventory management
systems, and supply chain management.

These technologies have vastly changed the way that businesses run. One large way in
which businesses have adapted is by improving and implementing online payment security
systems.
Businesses have worked valiantly to ensure the safety of money when it comes to
online payment security. However, it comes with a price tag. It is estimated that by
2017, businesses will spend $93 billion a year on cyber security. This safeguard technology
that people use daily to complete online transactions did not come overnight, but took
decades to create, perfect and implement.

Using firewalls to build trust

Many businesses have jumped into the online marketplace and have claimed their
slice of the digital pie. In fact, if a business isn’t allowing customers to access its products
with a few clicks of the mouse, it’s definitely missing out on a large audience. This is
precisely the reason why the majority of businesses have integrated e-commerce and m-
commerce websites into their business models.

The first ever secure and successful online retail transactions, which were made in
1994, were initiated by Internet Shopping Network and Net Market. The largest retail
corporations online to date are that of eBay and Amazon, both of who opened for business in
1995, while Alibaba opened in 2003 and Tmall in 2008. None of these retailers would be
where they are today without the successful implementation of firewalls, which were
essential to building trust with their users. Firewalls, which work as a barrier between the
internet and a connected computer, ensure that only those granted permission can obtain
access to the information on the computer. Because of firewalls, users can get online knowing
that they can purchase items online in safety.

27
 In 1991, Sir Tim Berners Lee, an English computer guru and scientist, opened up the
first World Wide Web server used for commercial purposes.

The creation of the web, plus the creation of different technological innovations, led
to the opening of Pizza Hut’s online shop in 1994. As a result, it claims to hold the title of the
company providing the “first-ever online purchase”.

Seeing that people would be using the internet to regularly make online financial
transactions, Netscape Communications created a way to ensure that shopping systems,
online payment and online retailers were able to offer their clients encryption through their
internet browser’s Secure Sockets Layer (SSL) to ensure secure data transfers.

The most common payment methods for online transactions, which are all protected
by SSL, are made through cash-on-delivery (COD), cheque or check BANKING, wire
transfers, gift cards billing charged to landlines or mobile phones, debit card, postal money
order, electronic money, credit card or PayPal.

PayPal, a company that touts itself as “your personal Fort Knox”, offers transactions
that are classified as the most secure and dependable payment processor for making online
BANKING in different currencies. Online payment transactions are usually processed in real-
time, which is why it is so important to ensure that security is at the forefront of the
businesses you transact with online. Companies such as Victoria’s Secret and its
affiliates also use SSL for secure financial transactions. Personal identification numbers for
all Probably one of the oldest, tested and true security measures that is often the cornerstone
of online payment security is that of personal identification.

Personal identification dates back hundreds of years, with tangible personal

identification numbers (PINs) starting with the issuance of social security numbers in 1936.

PINs are used almost daily. Whether you use your debit card at an ATM, which started
using them in 1960, or you use a four-digit number to unlock your iPhone, the majority of
people use a PIN at least once a week if not every day. The video below shows just how
important PIN is and how to best ensure that it is protecting your financial interests.

To strengthen the power of PINs, many organizations have implemented additional

security measures like the two-factor authentication to ensure the security of their clients.
Two-factor authentication requires that users use a combination of security components to
access their private information.

28
 Google was the first site to use two-factor authentication. They made it so that those
requesting access were required to have not only a password, but access to the phone number
used when creating the account. Since then, companies like Poker Stars, an online site that
deals in millions of financial transactions a day, have taken this system to the next level by
providing their users with a multitude of ways to ensure the security of their online
BANKING. They have implemented multiple ways to ensure the safety of their clients’
transactions, including password security, a six digit PIN, account security tokens and SMS
validation. Other than a DNA match, you can’t get much more verified than this. Privacy and
confidentiality of information, especially when it concerns financial data, is detrimental to
customer satisfaction. There are millions of financial transactions done online on a daily basis
involving BANKING to online shopping websites or merchant stores, bill BANKING or
payment transactions. Security of cashless transactions done on a virtual platform requires an
element of paymentability and trust that can only be generated from the best and most
reputable brands and leaders in the industry.

PROS AND CONS OF ONLINE PAYMENT SYSTEM:

Credit (and Debit) Cards:
As of 2012, there were 1.5 billion active credit cards in the United States alone. Credit
cards are the most common payment method in the world right now.

The Pros
Credit cards are the most common/preferred payment option. You’d be hard-pressed
to find someone without a credit – or at least a debit – card.
Accepting credit cards encourages impulse buys. Credit cards are easy to use and quick (at
least from the customer’s perspective) to process. The entire see it, want it, buy it cycle goes
by relatively quickly for those favoring credit purchases; which allows prospective customers
more leeway when it comes to buying on impulse.

Credit cards can be used to make PayPal purchases. If you’re already using PayPal,
like most online freelancers, then you’re already accepting credit cards! PayPal allows
customers to input a credit card number in lieu of logging in if they don’t have (or don’t
want) a PayPal account.

The Cons
Keeping track of all the laws and security precautions. There are several laws that
must be adhered to should you decide to accept credit cards. In order to prevent security
breaches and protect your clients, you’ll have to develop a higher level of awareness. Not to

29
mention, legally, you can’t hold onto a client’s information past a certain point without
getting into trouble.

Processing fees. Both credit and debit cards require processing fees in order to finally
receive your payment. (You’ll also need to hand over additional funds in order to purchase a
pin pad if you decide to allow debit cards)

Mobile BANKING
This payment option actually encompasses several smaller options. For the purpose of
this article, “Mobile BANKING” will be classified simply as any payment you can make or
receive on your phone; whether it be through an SMS message, a QR code, NFC, or anything
else.

The Pros
Nearly everyone has a phone. Like credit cards, it’s nearly impossible to find someone
without a phone. So, whether your client is sending you a payment through their phone, or
initiating a payment through your phone, you’ll be covered.BANKING are generally fast. So
long as your phone is up to snuff, the rest of the procedure goes quickly

The Cons
Certain mobile methods are prone to security leaks. Depending on which mobile
payment method you choose, you may have to worry more about security.
Not all readers are created equal. If you choose a mobile payment method that
involves using an app with an actual, tangible, card reader – like Square, Paypal Here, or
Inuit Go Payment – then you may have compatibility issues. Most mobile credit card readers
are iPhone compatible, but nothing else is guaranteed. Be sure to do your research.

An update can cramp your style. Whenever you depend on an app to help run your
business, you run the risk of said app “breaking” when an update is released. If you upgrade
the program you use and it’s no longer compatible with the phone you’re using to accept
BANKING on, you could be up a creek.

Electronic BANKING
My personal favourite. Electronic/online payment options such as PayPal or Stripe are
becoming the new normal for freelancers, entrepreneurs, and online shoppers.

The Pros
 It’s easy. Online BANKING are arguably the easiest payment option of all
 It’s international. By accepting electronic/online BANKING, you’re opening your
doors to international business. Most online payment services come complete with

30
 currency converters. A freelancer in the United States could be getting paid by a client
in Guatemala with absolutely no trouble whatsoever.
 It’s fast! Next to cash, there’s no quicker way to get paid than this.

The Cons
The fees are through the roof. With few exceptions, the fees involved in receiving
online BANKING are exorbitant. The cut taken out of your final pay is usually a fair trade for
the “pros” listed above; however, if you’re expecting an exceptionally large payment, you
might want to use a method that leaves you with the bulk of the profit.

There are, of course, other options for getting paid what you’re due(such as money
orders or direct deposits); however, we’ve covered the five most widely-used methods for
freelancers.

In the end, how you get paid is up to you. Part of running your own business and taking
charge of your own career is making the “money” decisions. But, no matter which payment
options you prefer, always send out professional-looking invoices, charge what you’re worth,
and don’t let late payers take advantage of you.

31
3.2 INDUSTRY PROFILE
In late 1970s technology such as Electronic Data Interchange (EDI) and Electronic
Funds Transfer (EFT) to promote e-commerce transactions, authorized to operate in order to
promote, such as purchase orders or invoices for electronic business documents. In 1979,
Michael Aldrich contrived a technique as e-commerce; the technique was about online
shopping to allow consumers and business through online transaction processing to shop
from home and to trade with other business. In 1980s the enlargement and receipt of credit
cards, automated teller machines (ATM) and telephone.

The first ATM's machines use of magnetically prearranged plastic, the money could
not automatically withdraw from users' accounts were off-line machines. So the customer
would perhaps be apprehensively to let a machine handle their money. But the cards used an
encoded magnetic strip, making them safe and reusable. Consequently, just the only
customers with good credit history were able to use ATMs. Therefore nowadays the ATM
industry Association states that there will 1 billion of users using this transaction in ATMs.
Almost 80 percent belong to the private sectors (Commercial Union ATM, 2000).

The process of conventional payment system and settlement involves a buyer-to-seller

transfer of cash or payment information such as cheque and credit card. The actual settlement
of payment takes place in the financial processing network. A cash payment requires a buyer's
withdrawals form his or her bank account, a transfer of cash to the seller, and the seller's
deposit of payment to his or her account. Non-cash payment mechanisms are settled by
adjustment such as crediting and debiting the appropriate accounts between banks based on
the payment information conveyed via cheque or credit cards. Non-cash payment requires
three separate elements. The buyer must have an agreed means of payment authorization and
restructuring its bank to affect a transfer of funds. The seller's bank and buyer's bank need an
agreed method of exchange payment instructions. This is referred to as payment clearing
(Singh Sumanjeet, 2009).

The process of electronic payment systems have been in operations since 1960s and
have been expanding rapidly as well as growing in complexity. After the development of
conventional payment system, Electronic Fund Transfer (EFT) based payment system came
into existence. It was first electronic based payment system, which does not depend on a
central processing intermediary. An electronic fund transfer is a financial application of
32
Electronic Data Interchange (EDI), which sends credit card numbers or electronic cheques
via secured private networks between banks and major corporations. To use EFT to clear
BANKING and settle accounts, an online payment service will need to add capabilities to
process orders, accounts and receipts. But a landmark came in this direction with the
development of digital currency. The nature of digital currency or electronic money mirrors
that of paper money as a means of payment. As such, digital currency payment systems have
the same advantages as paper currency payment, namely anonymity and convenience.

CHAPTER IV
DATA ANALYSIS AND INTERPRETATIONS

In this chapter the analysis is carried out to known about the respondent’s opinion
regarding various factors and their SATISFACTION towards online payment systems. This
chapter is classified into two divisions:
 4.1 Simple Percentage Analysis
 4.2 Chi-Square Analysis

Simple Percentage Analysis:

33
 Simple Percentage Analysis method is used for comparing certain feature. The
collected data represented in the form of tables and graphs in order to give effective
visualization of comparison made. It can obtain by applying the following formulae

Simple percentage = Actual Population × 100

Sample Size

Chi-Square Analysis:
Chi- Square analysis is used to test significance difference among dependent and
independent variables in online shopping. The Chi-Square test is one of the simplest and most
widely used non parametric tests in statistical work. The quality Chi-Square describes the
magnitude of discrepancy between theory and observations

The formula used to test the significant is as follows:

X2 = (O – E) 2
E
Where,
O = Observed frequency
E = Expected frequency

TABLE NO: 4.1

TABLE SHOWING THE GENDER WISE DISTRIBUTION OF RESPONDENTS

GENDER No. Of RESPONDENTS PERCENTAGE

Male 62 52
Female 58 48
Total 120 100
Source: Primary data

INTERPRETATION
The above table pictures the gender wise distribution of the respondents. The
respondents have been nearly equals to each other, as Male respondents contribute 52% and
Female respondents with 48%. It shows that both genders are using online payment services
utmost equal. The following pie chart shows it clearly,

INFERENCE
 Majority of the respondents are Male respondents (52%).

34
 EXHIBIT No.4.1
EXHIBITS SHOWING THE GENDER WISE RESPONDENTS

35
 TABLE NO :4.2
TABLE SHOWING THE AGE WISE DISTRIBUTION OF RESPONDENTS

AGE No. Of RESPONDENTS PERCENTAGE

Up to 20 22 18
21 to 40 63 53
41 to 60 20 17
61 & above 15 12
TOTAL 120 100
Source: Primary Data

INTERPRETATION
The above table shows the age wise distribution of respondents. People aged 21 to 40
have been more than the other age categories. On the other hand, old age respondents’ i.e. 61
and above are least respondents. Age categories of Up to 20 and 41 to 60 holds Second and
third position respectively. It shows that young people are using the online payment services
than the other age group people.

INFERENCE
 Majority of the respondents belongs to the age category of 21 – 40 years (53%)

EXHIBIT No 4.2
EXHIBIT SHOWING THE AGE WISE RESPONDENTS

36
 TABLE: NO :4.3
TABLE SHOWING THE QUALIFICATION WISE DISTRIBUTION OF
RESPONDENTS

QUALIFICATION No. Of RESPONDENTS PERCENTAGE

School Level 19 16
College Level 71 59
Professional 24 20
Others 6 5
TOTAL 120 100
37
Source: Primary Data

INTERPRETATION
The above table shows that the respondents who have achieved college level of
education are using at a high rate of 59% where the people falling under other category is the
least with 5%. The table clearly picture that respondents with a minimum educational
qualification are using online payment services.

INFERENCE
 Greater parts of the respondent are the achievers of College level educational
qualification (59%).

EXHIBIT No 4.3
EXHIBIT SHOWING THE EDUCATIONAL WISE DISTRIBUTION OF
RESPONDENTS

38
 TABLE NO :4.4
TABLE SHOWING OCCUPATION WISE DISTRIBUTION OF RESPONDENTS

OCCUPATION No. Of RESPONDENTS PERCENTAGE

Employee 15 12
Business 9 7
Professional 12 10
Student 62 52
Housewife 14 12
Others 8 7

39
 TOTAL 120 100
Source: Primary Data

INTERPRETATION
The above table shows that most of the respondents are Students with 52%, followed
by employees (12%), Housewives (12%) and Professionals (10%) respectively. On the other
it reveals a shock distribution that business men are least respondents with 7% shares with
others category. The following bar diagram represents the occupation wise distribution.

INFERENCE
 Students (52%) are the majority respondents for the survey study.

EXHIBIT No 4.4
EXHIBIT SHOWING OCCUPATION WISE DISTRIBUTION OF RESPONDENTS

40
 TABLE NO : 4.5
TABLE SHOWING MARITAL WISE DISTRIBUTION OF RESPONDENTS

MARITAL
STATUS No. of RESPONDENTS PERCENTAGE

Married 51 43

Unmarried 69 57

TOTAL 120 100

Source: Primary Data

INTERPRETATION
The above table shows the martial status of the respondents of this study. It reveals that
majority of the respondents are Unmarried (57%). It also states that the remaining 43% is
contributed by Married respondents. The exhibit shows the distribution diagrammatically

INFERENCE
 Majority of the respondents are Unmarried respondent’s (57%).

41
 EXHIBIT No 4.5
EXHIBIT SHOWING MARITAL STATUS WISE DISTRIBUTION OF
RESPONDENTS

TABLE NO : 4.6
TABLE SHOWING THE TYPE OF FAMILY RESPONDENTS BELONG

FAMILY TYPE No. of RESPONDENTS PERCENTAGE

42
 Nuclear 82 68

Joint 38 32

TOTAL 120% 100

Source: Primary Data

INTERPRETATION
Table conveys the Type of family the respondents belong to. In the collected responses
68% of the respondents are from Nuclear family, whereas 32% of respondents belong to joint
family people. The following exhibit shows it clearly

INFERENCE
 Larger parts of the respondent are from Nuclear family (68%) background.

EXHIBIT No 4.6
EXHIBIT SHOWING RESPONDENT'S FAMILY TYPE

43
 TABLE NO :4.7
TABLE SHOWING RESPONDENT’S FAMILY SIZE

FAMILY SIZE No. of RESPONDENTS PERCENTAGE

2 to 3 Members 32 27
4 to 6 Members 68 57
7 & above Members 20 16
TOTAL 120 100
Source: Primary Data
44
INTERPRETATION
Above table represents family size of the respondents. In relation to the above table the
family with size of 4 to 6 members have contributed more than the rest. It belongs to 57% of
respondents followed by family with 2 to 3 members (27%) and family with 7& above
members (16%).

INFERENCE
 57% of respondents followed by family with 2 to 3 members.

EXHIBIT No 4.7
EXHIBIT SHOWING RESPONDENT’S DISTRIBUTION ON THEIR FAMILY SIZE

45
 TABLE NO: 4.8
TABLE SHOWING MONTHLY EARNINGS WISE DISTRIBUTION

MONTHLY INCOME No. of RESPONDENTS PERCENTAGE

Up to 10000 40 33
10001 - 20000 34 28
20001- 30000 30 25
30001 & above 16 14
TOTAL 120 100
Source: Primary Data

INTERPRETATION
The above statistics shows earnings of the respondents on monthly basis. It exhibit that
33% of respondents are earning up to 10000 per month, where as only 14% of the
respondents are earning more than 30000 per month. In addition, 28% of the respondents are
earning up to 20000 and 25% of respondents are earning up to 30000 per month.

INFERENCE
 Most of the respondents are earning a month income up to 10000 rupees (33%).

46
 EXHIBIT No 4.8
EXHIBIT SHOWING MONTHLY INCOME WISE DISTRIBUTION OF
RESPONDENTS

TABLE NO:4.9
TABLE SHOWING MODE OF AWARENESS RESPONDENTS

MODE OF AWARE No. of RESPONDENTS PERCENTAGE

47
 Friends and Relatives 40 33
Neighbours 30 25
Media 50 42
TOTAL 120 100
Source: Primary Data

INTERPRETATION
The above table demonstrates the Mode by which the respondents get aware of online
payment services. As a victim of technological advancement, it shows that 42% of
respondents have been aware by Media, followed 33% by friends and relatives. To the least,
25% of the respondents are aware by communicating with neighbours.

INFERENCE
 Media (42%) is the major source of awareness creator among the respondents.

EXHIBIT No 4.1.9
TABLE SHOWING MODE OF AWARENESS BY RESPONDENTS

48
 TABLE NO:4.10
TABLE SHOWING THE FORM OF MEDIA THAT AWARE RESPONDENTS

MEDIA FORM'S No. of RESPONDENTS PERCENTAGE

Television 13 26

Social Media 18 36

Internet 17 34

Others 2 4
49
Source: Primary Data

INTERPRETATION
The above table shows how the various forms of media have created awareness among
50 respondents. As a peak, Social Media (36%) i.e., Facebook, Twitter etc and Internet (34%)
i.e.. sites for shopping have contributed more than the television media (26%) . Apart, forms
of media like newspaper, radio have contributed least awareness.

EXHIBIT No 4.1.10
EXHIBIT SHOWING FORM OF MEDIA DISTRIBUTION

50
 TABLE NO:4.11
TABLE SHOWING THE LEVEL OF AWARENESS AMONG THE RESPONDENTS

LEVEL No. of RESPONDENTS PERCENTAGE

Fully aware 19 16

Partly aware 68 57

Just aware 33 27

TOTAL 120 100

Source: Primary Data

INTERPRETATION
Table shows the Awareness level among the respondents on online payment. More than
half (57%) of the respondents are partly aware. In contrast, only few respondents are fully
aware (19%). There are 27% of respondents who just aware of online BANKING.

INFERENCE
 Majority of the respondents in this survey are partly aware (57%) respondents.

51
 EXHIBIT No 4.11
EXHIBIT SHOWING THE AWARENESS LEVEL DISTRIBUTION

TABLE NO:4.12
TABLE SHOWING INFLUENCING FEATURE AMONG RESPONDENTS

FEATURES No. of RESPONDENTS PERCENTAGE

Time Saving 46 38

52
 Customer Care Services 24 20
Convenience 20 17
24 hours Accessibility 21 18
Different Payment Modes 9 7
TOTAL 120 100
Source: Primary Data

INTERPRETATION
The above table shows various features that influence respondents towards online
BANKING. Time saving feature have attracted 38% of the respondents to use online payment
services. Customer services have attracted 24% of respondents to use this service, followed
by 24hours accessibility (21%), Convenience (20%) and Different payment modes (9%)
respectively.

INFERENCE
 Though there may many features influence respondents, Time saving (38%) aspect of
this service has influenced most of the respondents.

EXHIBIT NO:4.12
EXHIBIT SHOWING INFLUENCING FEATURE AMONG RESPONDENTS

53
 TABLE NO:4.13
TABLE SHOWING HOW OFTEN THE RESPONDENTS PAY ONLINE

BASIS No. of RESPONDENTS PERCENTAGE

Daily 9 7%

Weekly 21 17%

Monthly 49 41%

Occasionally 41 34%

54
 TOTAL 120 100%
Source: Primary Data

The above statistics shows that how often the respondents are paying through online
payment services. 41% of respondents are pay through online on monthly basis. Only 7% of
respondents are using it on daily basis. Occasional users are placed second, as they have
contributed 34% of respondents.

INFERENCE
 Most of the respondents transact through online on a monthly basis (41%).

EXHIBIT No 4.13
EXHIBIT SHOWING HOW OFTEN RESPONDENTS PAY ONLINE

55
 EXHIBIT NO:4.14
TABLE SHOWING READING HABITS OF RESPONDENTS BEFORE
TRANSACTING

READING No. of RESPONDENTS PERCENTAGE

Yes, whole part of it 27 23%

Yes, Just scans through it 53 44%

No 40 33%

TOTAL 120 100%

Source: Primary Data

INTERPRETATION
Table shows the whether the respondents will read the policy statement before
conducting transactions or not. 44% of respondents say yes, but they just scan through the
policies, where as 23% of respondents who say yes have the habit of reading the policies
wholly. It is shocking that 33% of respondents do not possess the habit of reading the policy
statements which cost them a lot.

INFERENCE
 Larger parts of the respondent are the habitants of just scanning (44%) the money
back policies.

56
 EXHIBIT NO:4.14
EXHIBIT SHOWING READING HABITS OF RESPONDENTS BEFORE
TRANSACTING

TABLE NO: 4.15

TABLE SHOWING ANNUAL SPENDING OF RESPONDENTS THROUGH ONLINE

SPENDING p/a No. of RESPONDENTS PERCENTAGE

57
 Below 3000 47 39%

3000 to 5000 39 32%

5000 to 10000 27 23%

10000 and above 7 6%

TOTAL 120 100

Source: Primary Data

INTERPRETATION
Table tells us the annual spending made by respondents via online payment systems. As
for spending is concern, 39% of respondent are spending less than 3000 rupees per annum.
On the other hand, just 6% of respondent are spending more than 10000 rupees per annum. In
between, 32% are spending 3000 to 5000 rupees per annum and 23% are spending 5000 to
10000 rupees per annum.

INFERENCE
 The survey reveals that most of the respondents spend less 3000 rupees (39%) per
annum via online BANKING.

EXHIBIT NO: 4.15

EXHIBIT SHOWING ANNUAL SPENDING OF RESPONDENTS THROUGH
ONLINE

58
 TABLE NO:4.16
TABLE SHOWING DISTRIBUTION OF MOST FREQUENT PAYING MODE

MODE OF PAY No. of RESPONDENTS PERCENTAGE

Debit Card 39 33%
Credit Card 19 16%
Net Payment 45 37%
Service Websites 17 14%
TOTAL 120 100%
Source: Primary Data
59
INTERPRETATION
The above table shows the mode of payment by which the respondents have made
online BANKING. Interestingly, recent advancement in payment called Net payment has
been used by 37% of respondents as a mode of payment. Debit card is been used is 33% of
respondents as mean of pay through online. Apart, Credit card has been used by 16% of
respondents followed by service websites (Rupay, PayPal, Airtel money, M pesa etc) are used
by 14% of respondents.

INFERENCE
 Net payment (37%) is found to be the most frequent mode of pay preferred by the
respondents.

EXHIBIT No 4.16
EXHIBIT SHOWING THE MOST FREQUENT MODE OF PAYMENT

60
 TABLE NO: 4.17
TABLE SHOWING MOST OFTEN USED CATEGORIES FOR ONLINE PAYMENT

CATEGORIES No. of RESPONDENTS PERCENTAGE

Travel 21 18%

Tickets 41 34%

Business Transactions 10 8%

Services 35 29%

Online Shopping 9 8%

Others 4 3%

TOTAL 120 100%

Source: Primary Data

INTERPRETATION
The above tabulation shows the categories that are often used by the respondents to pay
online. The table shows that 34% of respondents are using the online payment services for
buying tickets to movies, concerts etc,.. followed by 29% of respondents are using the online
payment services for paying services like electricity bill, insurance premium, taxes, and more.
As a least part, only 8% of respondents are spending through online while shopping online.
This is because of the cash on delivery scheme provided by the shopping websites. As equals
to online shopping business transactions (8%) have been made through online payment
services

61
INFERENCE
 Most of the respondents are making online BANKING routinely for getting tickets
(Movies, concerts, etc.,).

EXHIBIT NO:4.17
EXHIBIT SHOWING MOST OFTEN USED CATEGORIES FOR ONLINE
PAYMENT

TABLE NO: 4.18

62
TABLE SHOWING RESPONDENT’S REDUCED FREQUENCY TO TRADITIONAL
PAYMENT

Y/N No. of RESPONDENTS PERCENTAGE

Yes 76 63%

No 44 37%

TOTAL 120 100%

Source: Primary Data

INTERPRETATION
The above table shows whether the online payment services have reduced their
traditional form of payment services. 63% of the respondents respond as yes, it has reduced
their frequency of traditional BANKING. On the other hand, 37% of respondents don’t agree
with it. The following exhibit (4.1.18) will help to show it clearly

INFERENCE
 Majority of the respondents agrees that the online payment system has reduced the
frequency (63%) of their traditional form.

EXHIBIT NO:4.18
EXHIBIT SHOWING FREQUENCY REDUCTION TO TRADITIONAL PAYMENT

63
 TABLE NO:4.19
TABLE SHOWING LEVEL OF SATISFACTION TOWARDS ONLINE PAYMENT
FEATURES

Highly Highly
Factors Satisfied Neutral Dissatisfied
Satisfied Dissatisfied
Charges 43 (36%) 47(39%) 16 (13%) 12 (10%) 2 (2%)
Time 42 (35%)
64 (53%) 11 (9%) 2 (2%) 1 (1%)
Consumption

64
 Security
46 (38%) 38 (32%) 11 (9%) 4 (3%)
21 (18%)

Network 25 (21%) 44 (37%) 24 (20%) 22 (18%) 5 (4%)

Customer
14 (12%) 16 (38%) 31 (26%) 25 (21%) 4 (3%)
Service Care
Mode of
Payment 25 (21%) 45 (38%) 33 (27%) 12 (10%) 5 (4%)

Accessibility 28 (23%)
36 (30%) 37 (31%) 12 (10%) 7 (6%)
Money back
Gurantee 13 (11%) 39 (33%) 30 (25%) 27 (22%) 11 (9%)

Offers 23 (19%) 38 (31%) 33 (28%) 9 (8%) 17 (14%)

Source: Primary Data

INTERPRETATION
The above show the level of satisfaction on various factors. Initially, on charges
imposed for online payment, 39 % of respondents are satisfied where as just 2% are highly
dissatisfied with 13% stands neutral.

On the Second factor, Time Consumption, 53% of respondents are satisfied; 35% are
highly satisfied whereas 1% of respondets are highely dissatisfied with time factor
Thirdly, the Security factor has highly satisfied 38% of respondents, wherea 9% of
respondents are dissatisfied with security follwoed by 3% of highly dissatified. 38% of
respondents stands neutral on security factors.

Network factor have satisfied 37% of respondents, whereas 18% of respondents are
dissatisfied with it. 20% of respondents are neither satisfied nor disssatisfied.

Customer Care services have gained 38% of satisfaction from the respondents followed
by 12% of Highly satisfied respondents. On the other side, 21% of respondents are
dissatisfied and 3% of respondents are highly dissatisfied, remaining 26% of respondents
remains neutral.

Mode of payment offered by services have attracted satisfactory level from 38% of
respondents; 21% of highly satisfactory level respondents; 27% of respondents satisfaction
remains neutral. To the contrast, 10% of respondents are dissatisfied and 4% are highely
dissatisfied

65
 Accessibility factor, 23% of respondents are highly satisfied with the accessibility
factors ,followed by, 30% are satisfied; 31% remains neutral; 10% are dissatisfied and 6% are
highly dissatisfied

Money back gurantee has been still lack in online BANKING, as a result of it, 22% of
respondents are dissatisfied with money back gurantees and only 11% of people are highly
satisifed with such policies. As usual, neutrally satisfied respondents are at 25%.

Offers provided by online payment services have satisfied 31% of respondents and it
has highly satisfied 19% of people. To the contrary, 28% are neutrally satisfied; 8% are
dissatisfied and 14% are highly dissatisfied because of offers by online payment services.

INFERENCE
 Nearly quadrant of respondents are agreed with they have been charged for online
BANKING

TABLE NO:4.20
TABLE SHOWING WHETHER CHARGES HAVE BEEN CHARGED ON ONLINE
PAYMENT SERVICES

Y/N No. of RESPONDENTS PERCENTAGE

Yes 89 74%

No 31 26%

TOTAL 120 100%

Source: Primary Data

INTERPRETATION
Table shows that 74% of respondents are agreed that they have been charged for online
payment services and 26% are disagree with the fact that they are being charged for online
payment services.

INFERENCE
 Of those 74% who said yes, Majority of the respondents felt that they are charged at a
moderate rate.

66
 EXHIBIT NO: 4.20
EXHIBIT SHOWING DISTRIBUTIONS ON CHARGES HAVE BEEN MADE
OR NOT

67
 TABLE NO:4.21
TABLE SHOWING HOW MUCH DO THEY CHARGE FOR RESPONDENTS SAY
YES

MEANS No. of RESPONDENTS PERCENTAGE

High Rate 18 21%

Moderate Rate 51 57%

Lower Rate 20 22%

TOTAL 89 100%
Source: Primary Data

INTERPRETATION
The above represents how much charges have been made on online payment services.
On which, 57% of respondents say that they have charged at moderate rate and 21% says that
they are highly charged. More than that 22% of respondents are paying low rate charges.

EXHIBIT No 4.21
EXHIBIT SHOWING THE RATE OF CHARGES MADE ON ONLINE BANKING

68
 TABLE NO: 4.22
TABLE SHOWING IF THE RESPONDENTS ENJOY ADDITIONAL BENEFITS

Y/N No. of RESPONDENTS PERCENTAGE

Yes 61 51%

No 59 49%

TOTAL 120 100%

Source: Primary Data

INTERPRETATION

69
 The above tabulation shows that 51% of respondents says that they enjoy additional
benefits while they pay through online. 49% of the respondents says that they never enjoy
benefits on online payment systems. There is huge difference between the respondents say
yes and no. The exhibit shows it clearly indeed.

INFERENCE
 Majority of the respondents agrees that they are enjoying some additional benefits
(51%) while paying via online.

EXHIBIT No 4.22
EXHIBIT SHOWING RESPONDENTS RESPONSE TO ADDITIONAL BENEFITS

70
 TABLE NO:4.23
TABLE SHOWING THE ADDITIONAL BENEFITS ENJOYED BY SOME
RESPONDENTS

FORMS OF GIFTS No. of RESPONDENTS PERCENTAGE

Free Gifts 12 19%
Zero Charges 33 54%
Gift Vouchers 16 26%
Others 5 1%
TOTAL 61 100%
Source: Primary Data

INTERPRETATION
In relation to the above table, respondents said yes have enjoyed benefits any of the
above form. 54% of respondents enjoyed zero charges on payment as an benefit, to the least
just 1% of respondents enjoyed another benefits than free gifts and gift vouchers.

INFERENCE
 In those 51%, majority of them are enjoying Zero charges on payment (54%), as their
additional benefit.

71
 EXHIBIT No 4.23
EXHIBIT SHOWING FORMS OF BENEFITS ENJOYED

TABLE NO:4.24
TABLE SHOWING PROBLEMS FACED BY RESPONDENTS WHILE PAY ONLINE

PROBLEMS No. of RESPONDENTS PERCENTAGE

Security 19 16%

72
 Server Problems 44 37%
Modes of Pay 25 20%
Money Back Policies 11 9%
Poor Customer Care 9 9%
Inconvenience 10 8%
Others 2 1%
TOTAL 120 100%
Source: Primary Data

INTERPRETATION
The above statistics states the problem faced by the respondents while they pay through
online. 37% of respondents face problems in servers while pay through online, followed by
security problems (16%), modes of pay (20%) as high problematic areas. Just 8% of
respondents felt problems in inconvenience, followed by Money back policies (9%) and poor
customer care (9%).

INFERENCE
 Server problem (37%) is the severe problem faced by most of the respondents
responded this survey.

EXHIBIT No 4.24
EXHIBIT SHOWING PROBLEM FACED BY RESPONDENTS WHILE PAYING
THROUGH ONLINE

73
 TABLE NO:4.25
TABLE SHOWING RECOMMENDATION FACTOR OF RESPONDENTS

Y/N No. of RESPONDENTS PERCENTAGE

Yes 87 73%

No 33 27%

TOTAL 120 100%

Source: Primary Data

74
INTERPRETATION
This above answers the question whether the respondents are going to recommend
others to use online payment services or not. 73% of the respondents are ready to recommend
online payment services because of their satisfactory level, where as 27% of other
respondents are not ready to recommend as they might face some dissatisfaction or problem
towards such services.

INFERENCE
 Majority of the respondents are happy to recommend the online payment systems to
their neighbours, friends and relatives.

EXHIBIT No 4.25
TABLE SHOWING THE RESPONSE TO RECOMMENDATION FACTOR

75
 CHI-SQUARE TABLE NO: 26
RELATIONSHIP BETWEEN GENDER AND INFLUENCING FEATURE
Hypothesis:
H1 - There is a significant relationship between gender of the respondents and features
of online payment system
H0 - There is no significant relationship betweeen gender of the respondents and
features of online payment system
Observed value (O)

Factors V1 V2 V3 V4 V5 Total
Male 24 13 11 9 5 62
Female 22 11 9 12 4 58
Total 46 24 20 21 9 120

Expected value (E)

Factors V1 V2 V3 V4 V5 Total
Male 24 12 10 11 5 62
Female 22 12 10 10 4 58
Total 46 24 20 21 9 120

Chi-square calculation:
X2 = (O – E) 2
E
Where, O = Observed frequency
E = Expected frequency

76
Table showing the computed value of chi-square analysis:

O E (O-E)2 (O-E)2 / E
24 24 0 0
13 12 1 0.083
11 10 1 0.1
9 11 4 0.363
5 5 0 0
22 22 0 0
11 12 1 0.083
9 10 1 0.1
12 10 4 0.4
4 4 0 0
Total 1.129

Computed value = 1.129

Degrees of freedom = (R-1) × (C-1)
= (2-1) × (5-1) = 4
Table value @ 5% level of significance = 9.49

Inference:
Since the calculated value from the above table is lesser than the table value. In other
terms, calculated value (1.129) < table value (9.49), Therefore, Null hypothesis is accepted.
Hence, there is no significance difference between gender of the respondents and feature of
online payment systems.

CHI-SQUARE TABLE NO: 27

RELATIONSHIP BETWEEN GENDER AND LEVEL OF AWARENESS
Hypothesis:
H1 - There is a significant relationship between gender of the respondents and level of
awareness
H0 - There is no significant relationship between gender of the respondents and level
of awareness
Observed value (O)

77
 Factors V1 V2 V3 Total
Male 13 35 14 62
Female 6 33 19 58
Total 19 68 33 120

Expected value (E)

Factors V1 V2 V3 Total
Male 10 35 17 62
Female 9 33 16 58
Total 19 33 16 120

Chi-square calculation:
X2 = (O – E) 2
E
Where, O = Observed frequency
E = Expected frequency

Table showing the computed value of chi-square analysis:

O E (O-E)2 (O-E)2 / E
13 10 9 0.9
35 35 0 0
14 17 9 0.529
6 9 9 1
33 33 0 0
19 16 9 0.562
Total 2.989

Computed value = 2.989

Degrees of freedom = (R-1) × (C-1)
= (2-1) × (3-1) = 2
Table value @ 5% level of significance = 5.99

Inference:

78
 Since the calculated value (2.989) from the above table is lesser than the table value
(5.99). Hence, the calculated value is less than table value, H0 is accepted. Therefore there is
no significant relationship between gender of respondents and their awareness level.

CHI-SQUARE TABLE NO:28

Hypothesis:
H1 - There is a significant relationship between Age of the respondents and feature
influencing them
H0 - There is no significant relationship between Age of the respondents and feature
influencing them
Observed value (O)
Factors V1 V2 V3 V4 V5 Total
Upto 20 10 3 4 4 1 22
21 – 40 24 11 12 11 5 63
41 – 60 7 6 3 3 1 20
61 and above 5 4 1 3 2 15
Total 46 24 20 21 9 120

Expected value (E)

Factors V1 V2 V3 V4 V5 Total
Upto 20 8 4 4 4 2 22
21 – 40 24 13 11 11 5 63
41 – 60 8 4 3 3 1 20
61 and above 6 3 2 3 1 15
Total 46 24 20 21 9 120

Chi-square calculation:
X2 = (O – E) 2
E
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 Where, O = Observed frequency
E = Expected frequency

Table showing the computed value of chi-square analysis:

O E
10 8 4
3 4
4 4
4 4
1 2
24 24
11 13
12 11
11 11
5 5
7 8
6 4
3 3
3 3
1 1
5 6
4 3
1 2
3 3
2 1
(O-E)2 (O-E)2 / E
0.5
1 0.25
0 0
0 0
1 0.5
0 0
4 0.307
1 0.090
0 0
0 0
1 0.125
4 1
0 0
0 0
0 0
1 0.166
1 0.333
1 0.5
0 0
1 1
Total 4.771

Computed value = 4.771

Degrees of freedom = (R-1) × (C-1)
= (4-1) × (5-1) = 12
Table value @ 5% level of significance = 21.0

Inference:
Since the calculated value (4.771) from the above table is lesser than the table value
(21.0). Hence, the calculated value is less than table value, H0 is accepted. Therefore there is
no significant relationship between age of respondents and feature influencing them.
CHI-SQUARE TABLE NO:29
Relationship between Monthly income and Annual pay made via online
Hypothesis:
H - There is a significant relationship between monthly income and annual payment
made via online
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 H0 - There is no significant relationship between monthly income and annual payment
made via online
Observed value (O)

Factors V1 V2 V3 V4 Total
Upto 10000 21 13 6 1 40
10001 – 20000 14 12 6 2 34
20001 – 30000 7 11 10 2 30
30001 & above 5 4 5 2 16
Total 47 39 27 7 120

Expected value (E)

Factors V1 V2 V3 V4 Total
Upto 10000 16 13 9 2 40
10001 – 20000 13 11 8 2 34
20001 – 30000 12 10 6 2 30
30001 & above 6 5 4 1 16
Total 47 39 27 7 120

Chi-square calculation:
X2 = (O – E) 2
E
Where, O = Observed frequency; E = Expected frequency

Table showing the computed value of chi-square analysis:

O E (O-E)2 (O-E)2 / E
21 16 25 1.562
13 13 0 0
6 9 9 1
1 2 1 0.5
14 13 1 0.076
12 11 1 0.090
6 8 4 0.5
2 2 0 0
7 12 25 2.08
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 11 10 1 0.1
10 6 16 2.66
2 2 0 0
5 6 1 0.166
4 5 1 0.2
5 4 1 0.25
2 1 1 1
Total 10.184

Computed value = 10.184

Degrees of freedom = (R-1) × (C-1)
= (4-1) × (4-1) = 9
Table value @ 5% level of significance = 16.9

Inference:
Since the calculated value (10.184) from the above table is lesser than the table value
(16.9). Hence, the calculated value is less than table value, H0 is accepted. Therefore there is
no significant relationship between monthly income of respondents and their annual online
payment.

CHAPTER V
FINDINGS, SUGGESTION AND CONCLUSION
5.1 FINDINGS
 Majority of the respondents are Male respondents (52%).
 Majority of the respondents belongs to the age category of 21 – 40 years (53%)
 Greater parts of the respondent are the achievers of College level educational
qualification (59%).
 Students (52%) are the majority respondents for the survey study.
 Majority of the respondents are Unmarried respondent’s (57%).
 Larger parts of the respondent are from Nuclear family (68%) background.
 Most of the respondents are earning a month income up to 10000 rupees (33%).
 Media (42%) is the major source of awareness creator among the respondents.
 Of those 42% , most of the respondent’s awareness is been created by social medias
like Facebook, twitter etc.,
 Majority of the respondents in this survey are partly aware (57%) respondents.
 Though there may many features influence respondents, Time saving (38%) aspect of
this service has influenced most of the respondents.
 Most of the respondents transact through online on a monthly basis (41%).
 Larger parts of the respondent are the habitants of just scanning (44%) the money
back policies.
 The survey reveals that most of the respondents spend less 3000 rupees (39%) per
annum via online BANKING.
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 Net payment (37%) is found to be the most frequent mode of pay preferred by the
respondents.
 Most of the respondents are making online BANKING routinely for getting tickets
(Movies, concerts, etc.,).
 Majority of the respondents agrees that the online payment system has reduced the
frequency (63%) of their traditional form.
 Nearly quadrant of respondents are agreed with they have been charged for online
BANKING
 Of those 74% who said yes, Majority of the respondents felt that they are charged at a
moderate rate.
 Majority of the respondents agrees that they are enjoying some additional benefits
(51%) while paying via online.
 In those 51%, majority of them are enjoying Zero charges on payment (54%), as their
additional benefit.
 Server problem (37%) is the severe problem faced by most of the respondents
responded this survey.
 Majority of the respondents are happy to recommend the online payment systems to
their neighbours, friends and relatives.

CHI – SQUARE:
 There is no significant relationship between Gender of the respondents and feature
influencing them
 There is no significant relationship between Gender of the respondents and Awareness
level of the respondents
 There is no significant relationship between Age of the respondents and feature
influencing them
 There is no significant relationship between the respondents monthly income and
annual spending via online BANKING.

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5.2 SUGGESTIONS
 Provide a number of payment methods.
 Can allow BANKING without requiring an Account.
 Deliver a Seamless Design
 Don’t redirect people
 Make errors easy to fix
 Ask for essential information only
 Provide Reassurance on security and Privacy.
 Keep distractions to a Minimum.
 Have clear calls to action
 Can create awareness among people of different income groups
 To the maximum, every system of payment can be changed to online mode.
 Can make it more convenient for the users.
 May concentrate on security aspects, customer care, accessibility, and money policies
among websites.
 Try to solve the frequent problems faced by the respondents.

CONCLUSION

The study survey on the customer SATISFACTION towards online payment has
received by 120 in and around Coimbatore city. It is shows that, people are moving fastly to
the next level of payment method. Instead of carrying cash, which is not secure, it would be
better for the people to pay their regular bills via online payment systems. It reduces human
efforts and saves a lot of trees (can reduce production of paper). The study reveals that the
respondents are bothering about security factors in the online payment systems.

It is the role of the service provider to built trust in the hearts of people. It is also an
responsibility of the people who transact via online, to check whether it is secured or not. At

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last the government should have limited control in making payment via online payment
systems.

BIBLIOGRAPHY
BOOK & JOURNAL REFERENCES:
 Statistical Methods – Dr. S.P Gupta – 37th Edition – 2008 – Sultan Chand and sons,
New Delhi.
 Global Online Payment Methods – 2015 – Economics Week Journal (Atlanta GA) –
ISSN: 1945 – 6905 – Date 11.09.2015 – Page: 357
 Availability and Reliability Research Article - May 2013 - Deshmukh et al.- Page 35
- International Journal of Emerging Research in Management &Technology - ISSN:
2278-9359 - (Volume-2, Issue-5)
 Research Article May 2013 - Deshmukh et al. - Page 33 - International Journal of
Emerging Research in Management &Technology - ISSN: 2278-9359 - (Volume-2,
Issue-5).
 International Journal of Emerging Research in Management &Technology - ISSN:
2278-9359 - (Volume-2, Issue-5) - Payment Processing Systems and Security for E-
Commerce

WEBSITE REFERENCES:
 www.business2community.com
 www.entrepreneur.com
 www.theguardian.com
 www.wlv.ac.uk>wolf
 www.wikipedia.co.in

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 SURVEY QUESTIONNAIRE ON
A CUSTOMER SATISFACTION TOWARDS ONLINE BANKING WITH SPECIAL
REFERENCE TO COIMBATORE CITY

Please Tick [√] on the relevant boxes and if not please specify, [*] indicates mandatory)
1. Name :
2. Gender* :
Male
Female
3. Age* :
up to 20
21- 40
41- 60
61 and above
4. Educational Qualification:
School level
College level
Professional
Any other (specify) ________
5. Occupation*:
Employee
Business
Professional
Student
Housewife
Other (specify) ______
6. Marital Status:
Married
Unmarried
7. Type of Family:
Nuclear
Joint

8. Size of the family:

2 to 3 members
4 to 6 members

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 7 and above
9. Monthly Income*: (in Rupees)
Up to 10000
10001 – 20000
20001 - 30000
30001 and above
10. How do you aware of online payment?
Friends and Relatives
Neighbors
Media
11. If Media means, which form of media it is?
Television
Social Media (like Facebook, Twitter…)
Internet (like Shopping sites)
Others (specify)
12. Rate your awareness level:
Fully aware
Partly aware
Just aware
13. Which feature influence you to go for online BANKING?
Time saving
Customer services
Convenience (No queue)
24hours accessibility
Different payment modes
Others (specify) __________

14. How often do you have online payment?

Daily
Weekly
Monthly
Occasionally
15. Will you read the money back policies of websites and BANKING before conducting
transactions?
Yes, whole part of it
Yes, just scans through it
No
16. How much do you usually pay on online per month (in Rupees)?
3000 below
3000-5000
5000-10000
10000 and above

87
 17. What’s your most frequent mode of payment through online?
Debit Card
Credit Card
Net payment
Service websites (like Rupay, PayPal...)
18. Which is your most often used category for online BANKING?
Travel (flight and train tickets...)
Tickets (for movies, concerts….)
Business Transactions
Services (EB bill, insurance, tax…..)
Online shopping (Flipkart, Amazon...)
others (specify) __________
19. Have you reduced the frequency of traditional payment due to online payment?
Yes
No

20. Level of Satisfaction towards online BANKING:

Highly Highly
Satisfied Satisfied Neutral Dissatisfied Dissatisfied
Charges on online payment
Time Consumption
Security
Network
Customer service care
Mode of payment
Accessibility
Money back guarantee
Offers
21. Do the websites/ BANKING charging for online payment?
Yes
No
22. If yes means, how do they charge?
At high rate
At moderate rate
At lower rate
23. Have you ever enjoy any additional benefits while paying online?
Yes
No
24. If yes means, what form it would be?
Free gifts
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 Zero charges on payment
Gift vouchers
Others (specify) _______
25. While transacting online, where do you face problem more often?
Security
Server problems
Modes of pay
Money back policies
Poor customer care
Inconvenience
Others (specify) ______________
26. Will you recommend others to use online payment?
Yes
No
27. Your suggestions for improving the services of online BANKING.
___________________________________________________________________________
___________________________________________________________________________
*Thank you*

89