INTRODUCTION

PhonePe Private Limited or PhonePe is an Indian PhonePecommerce payment

system and digital wallet company headquartered inBangalore, India. It was founded in
December 2015, by Sameer Nigam and Rahul Chari. PhonePe app went live in August
2016 and was the first payment app built on Unified Payments Interface (UPI).

The PhonePe app is available in over 11 Indian languages. Using PhonePe, users
can send and receive money, DTH, recharge mobile, data cards, make utility payments,
buy gold and shop online and offline. In addition PhonePe also allows users to
book Ola rides, pay for Redbus tickets, order food on Freshmenu, eaf, fit and avail
Goibibo Flight and Hotel services through microapps on its platform.

PhonePe is accepted as a payment option across 5 million offline and online

merchant outlets covering food, travel, groceries, movie tickets etc. The app crossed 100
million user mark in June 2018 and also crossed 5 billion transactions in December 2019.

It is licensed by the Reserve Bank of India for issuance and operation of a Semi Closed
Prepaid Payment system.

Digital transactions are defined as transactions in which the customer authorizes

the transfer of money through electronic means, and the funds flow directly from one
account to another. These accounts could be held in banks, or with entities/ providers.
These transfers could be done through means of cards (debit/credit), mobile wallets,
mobile apps, net banking, Electronic Clearing Service (ECS), National Electronic Fund
Transfer (NEFT), Immediate Payment Service (IMPS), prPhonePepaid instruments or
other similar means.

The Union Cabinet has given its approval for introduction of steps for promotion
of payments through cards and digital means. The move aims at reducing cash
transactions. Several short term (to be implemented within one year) and medium term
measures (to be implemented within two years) have been approved for implementation
by the Government Ministries/ Departments/ Organisations. The Guidelines are as
follows.

Since the dawn of history, there has been trading between two parties exchanging
goods facPhonePeto-face. Eventually such trading became complicated and inconvenient;
money was invented so that a buyer could acquire something he needed from a seller
without necessarily exchanging goods. Security of the monetary systems was guaranteed
by the local, regional, national, and eventually international banks controlling the printing
of money. In course of time, new ways of payment such as payment orders, cheques, and
later „plastic‟ money were invented. These allow payment without „actual‟ money.
Mapping between the payment instrument and real money is still guaranteed by banks
through secure financial clearing networks.

Eventually, remote payment became possible using those same instruments,

although security then started to become a challenge. Verifying a hand-written signature
on a cheque or a credit card mail order is impossible when buyer and seller are not
facPhonePetoface; in this case the buyer must take the additional risk of sending in a
payment before having received his purchase or the seller must send the purchased items
before having received the payment. Phone order purchases are riskier since no signature
at all can be provided: the seller runs the risk that the buyer may deny having made the
purchase and demand a refund even after he has received the goods. Recently, there has
been a great deal of interest in facilitating commercial transactions over open computer
networks, such as the Internet. The introduction of open networks renders the security
issues even more critical. Clearly then, without new security measures, envisioning
electronic commerce over open computer networks is utopic. In this article, we attempt to
provide an overview of electronic payment systems focusing on issues related to their
security.
OBJECTIVES OF THE STUDY

Improve the ease of conducting card/digital transactions for an individual.

Reduce the risks and costs of handling cash at the individual level.
Reduce costs of managing cash in the economy.
Build a transactions history to enable improved credit access and financial
inclusion.
Reduce tax avoidance.
Reduce the impact of counterfeit money.
REVIEW OF LITERATURE

Many empirical studies have been conducted on the subject of „Plastic Money‟ in
India and abroad. The major emphasis of research has been on various issues like frauds,
security, usage pattern, new method of PhonePe, etc. The previous work done on plastic
money needs perusal. It has been reviewed to indicate in a general way the type of work
done on this subject in India. It is expected that the critical examination of the studies
would give focus to our problem and help to indicate the areas which have remained
neglected at the hands of the researchers. From the review of literature, it was found that
hardly there was a study which examined the perception of both users and traders on the
usage of plastic money. Also, many studies concentrated on individual cards, for
instance, credit or debit card and neglected the joint effect and new innovative cards like
smart card, charge card and check card. In this study, an attempt is made to include all
types of cards in the analysis.

Handelsman and Munson (1989), “Switching behaviours from credit card to cash
payment among ethnically diverse retail customers” shows that the credit card sales
constitute an important revenue source for many retailers. Their ever increasing use and
evaluation into other forms, such as debit and electron cards, demands that retailers gain a
more complete understanding of how they are used by diverse consumer segments.
Particularly needed is a better understating of the propensity to switch over from credit
card to cash payment and the incentive required to initiate switching. In view of the cost
to the retailer of administering credit card payment systems, the retailer‟s overall profit
position may be enhanced by converting a larger proportion of credit card sales to cash
sales. Four aspects of credit card usage and switching ethnicities are investigated,
propensity to switch over from credit card to cash payment at various levels of monetary
incentive, the effect of product price on propensity to switch, the frequency of credit card
usage, and the preferred method of payment of credit card balances (installment versus
full payment). Several significant differences are shown among the three ethnic groups
studied (Anglo-American, ChinesPhonePeAmerican and his panic-American) in these
usage behaviours such differences might even be extended to international comparisons
involving consumers domiciled in different countries.

Barker (1992) in his study, Globalization of credit card usage: The case of a
developing economy” investigate the attitude of Turkish consumers towards credit cards,
and the approach of card issuers by surveying two samples of 200 card holders and non-
holders. The better educated, middle aged members of the upper middle class seem to be
the prime target; the most important reasons for using a credit card were “case of
payment”, followed by “risk of carrying cash”, Non holders do not carry credit cards
because they do not know much about it; informal sources of information appear to be
more influential than mass media advertising in penetrating the market; proposes that the
usage and the administration of credit cards are influenced very much by the
infrastructure of the country and hence, credit card companies have to modify their
marketing and administrative procedures rather than following a standardized approach.

Natarajan and Manohar (1993) “Credit Cards–an Analysis”. A study has been
attempted to know that to what extent the credit cards are utilized by the cardholders and
the factors influencing the utilization of credit cards. The study is confined to cards
issued by the Canara Bank. A random sampling technique is used to collect the data. Ten
components i.e. numbers of purchases, shops, percentage of purchases, place, frequency,
type of product, type of services, cash withdrawal facilities, add on facility, insurance
schemes are identified and used for the measurement. Chi square test has been conducted
to know the level of utilization. For this, both personal and nonpersonal factors also have
been taken into consideration. Chi square test reveals that sex, age, educational
qualification of card holders has no relationship with utilization of Can Card. While
occupation, income, employment status of spouse, mode of getting card has relationship
with utilization of Can Card.
 Vora and Gidwani (1993), “Plastic at a premium” show the usage facilities and
varieties of cards. The research shows that credit card is extremely useful to those people
who use it as to increase their purchasing power through the plastic card. Different cards
provide the different packages to attract the customers like teleticketing, discounts,
insurance coverage and provide reward points etc. According to author, the card holders
market has a potential to grow to 7 million, if all tax paying citizens are taken into
account. But these manful efforts at upgrading services can only have a limited impact as
long as the Indian customer remains credit shy. For this, they have to change their
spending habits and keep their card active, so that a piece of plastic becomes a premium
card in an effective way.

Mathur and George (1994), “Use of credit-cards by older American” shows the
usage behavior pattern of older people with credit card spending. Using a large national
sample of respondents from different age groups, finds that older adults use credit cards
as frequently as younger adults when circumstances and opportunities for consumption in
both groups are similar. Contrary to it, the commonly held belief that older people do not
use credit cards, the data suggests the need for practitioners to stop thinking about
consumer targets in terms of age and focus more on circumstances that determine one‟s
likelihood to use credit cards. Factors such as income, employment, retirement status,
shopping habits should be considered. While credit card usage may overall decline with
age, certain segment of mature consumers continue making use of credit cards throughout
the life. The data in the present study suggests alternative criteria like income and
employment status, for appealing to mature Americans. Targeting older consumers on the
basis of age might not only alienate them but is also likely to reach fewer prospective
customers.

Simon and Victor (1994), “Customers‟ Risk Perceptions of Electronic Payment

Systems” finds that one reason for the slow adoption rate of electronic fund transfer at
point-of-sale (EFTPoS) is that consumers perceive that EFTPoS has a higher level of risk
than other traditional payment methods. Study shows that EFTPoS has the lowest
physical risk and highest financial risk, the credit card has the lowest psychological risk
and highest time loss risk, while cash has the highest physical risk and lowest
performance risk. Physical risk, financial risk and time loss risk for cash payment are
significantly higher when purchase is large while performance risk for EFTPoS and credit
card payment is significantly higher when the purchase is small. Users of EFTPoS have a
significantly higher level of perceived financial and time loss risk than non-users, while
non–users have higher level of psychological risk. Article suggests that in order to reduce
customer‟s fears and worries, it is also appropriate to consider introducing some risk
reduction techniques. e.g. endorsements by key people in society (reducing psychological
risk), money-back guarantee (reducing financial risk) and live demonstration and free
trial (reducing time loss risk). Research indicates that technological excellence cannot
dictate success; a good marketing mix, prompt service support, sufficient legal protection
and educational efforts, etc. are also relevant.

Almeida (1995), “The Future in cards” shows that credit card business is booming
as more than 1.1 million Indians have credit cards with them. Their numbers are expected
to grow at an even faster pace as issuing banks get aggressive. Studies show that more
than 4000 business establishments in the country accept credit cards. The country now
provides all the ingredients for a healthy credit cards industry: a rapidly expanding,
increasingly acquisitive middle class, a growing yen for travel and entertainment
sophisticated merchant establishment and greater transparency in financial system.
Acquiring banks for business from merchant establishment has brought the commission
down and if the issuing bank happens to be also the acquiring bank, it get the entire
merchant discount. Finally, no payment system can ever replace cash in India on a wide
spread basis.

George (1995), “The card majors lead the way” shows that VISA and Master Card
play a major role in any international payment system. Both VISA and Master Card act
also as franchisers, lending their names to member banks‟ card and acting as guarantor of
payment to merchants willing to accept the cards. For this and for handling transactions,
VISA and Master card charge a fee which varies from country to country, but is
approximately 3 cents (90 paisa) per transaction. They are card clearing agencies. VISA
and Master card each have nearly 22000 banks all over the world as their members and
handle several million transactions each day. This gives them a transaction handling
capability unmatched by any individual bank. They are not credit card companies but
function on the line to provide a global network that allows authorization, clearing and
settlement of card transactions, both of credit and debit cards.

Kaynak (1995), “Correlates of credit card acceptance and usage in an advanced

developing Middle Eastern Country.” Study shows that with increases level of socio
economic and technological development, credit card usage particularly increases in
developing countries. An empirical research study conducted in urban Turkey indicates
that there are certain relationship between socio-economic and demographic
characteristics of Turkish consumers and their credit card holding and usage behaviors. It
was observed that one of the determinants of credit card use is related to the age of the
family head and family life–cycle stage. Generally, those household heads who are in
middle and upper age having large discretionary income level are more likely to use
credit cards. This may be termed a social class effect of credit card usage and acceptance.
Despite most of credit card users are urban dwellers, more educated with professional
type of jobs, and high income earners. Authors feel that getting more people to use credit
cards is indeed a marketing challenge. For this credit card issuers are meeting this
challenge by offering to cardholders different benefits and incentives and by urging
merchants to promote debit/credit at the point of sale.

Torbet and Marshall (1995), “One in the eye to plastic card fraud.” Paper explores
the potential use of behavioral and physiological biometric techniques in the battle
against credit card fraud in the retail environment. It discusses different techniques such
as automatic speaker, dynamic signature verification, fingerprint, facial recognition,
retinal and iris scanning, hand and finger geometry. Author feels that while biometric
technologies have the potential to reduce plastic card fraud there are several problems
which must be addressed before they can be used in retail environments, like the
recognition performance, speed of use, usability, customer acceptance, device cost are
considered along with industry standards for biometric devices.

Worthington (1995), “The cashless society” paper describes the cashless society,
where clumsy and expensivPhonePeto handle coins and notes are replaced by efficient
electronic payments initiated by various types of plastic cards is a tantalizing prospect for
the twenty-first century. Some of the interested parties stand to gain more than others if
the cashless society becomes a reality. Paper outlines the rationale of those who are keen
to promote the cashless society and the implications for marketers charged with winning
consumer acceptance for payment by plastic card. Commencing with a European-wide
view of the European plastic card market, focuses on recent developments within the UK,
one of Europe‟s leading countries in the use of plastic cards as a means of payments. The
plastic card payment product is analyzed under the three headings of pay later, pay now
and pay before and a view is offered as to the future prospects for each type of plastic
card in contributing to the development of the cashless society.

Joshi (1996), “Variants in plastic.” Author analysis that card issuers seeks to
introduces the emerging payment card technology like debit and smart cards. Credit cards
are being gradually revolutionised by various factors: introduction of customers– friendly
technology, a competitive marketing environment, the rise of the financially sophisticated
consumer who avoids paying interest and the emergence of new competitors. The
concept of debit cards as a new emerging payment system has gained acceptance in the
Asia-Pacific region in past few years. Being a new concept, mass acceptance is gradual
and not instantaneous. It shows that spending on credit cards is higher than debit cards
but the number of transactions are more on debit cards. There are technological and
infrastructure hurdles for debit cards as it is significantly different from credit cards. For
this, system should be on line and the investments in technology are huge. Study shows
that profit margins in debit cards are onPhonePethird than those from credit cards. Author
believes that India by virtue of a late starter in the card industry is at an advantage as it
can except to shorten its learning curve by utilizing global experience and expertise in
electronic payment system.

Maganty (1996), “Changing Dimension.” the author discusses the emerging trend
and importance of debit card in daily lives of Indian society. Debit cards are expected to
be in use in places where most transactions are done by cash or cheque in supermarkets,
petrol stations, convenience stores. There cards are designed for customers who like
paying by plastic card but do not want credit. These cards not only keep the cardholder
debt free but also provide a detailed account of spending. These types of cards are ideal
for those who have a tight budget and want to keep within it. Study shows that there are
two types of debit cards i.e. on line and off line debit cards. With the computerization and
modernization plastic money will become the status symbols in the 21st century of Indian
traditional bound society.

Radhakrishan (1996) study on “DEBIT CARDS” shows that the debit cards also
have found wide acceptability than credit cards because of assurance of payments to
retailers, switching of cardholders to debit card because of using interest free period to
avoid high interest cost, annual charges as compared to debit cards etc. The study shows
that the growth of service industry in the country, electronic fund transfer, point of
services offer a large potential for banks to cutting down cost associated with the paper
based clearing and payment services. The introduction of debit cards can take place
subsequently and the objective should be to attain a critical mass in issuing number of
such cards so that the operation becomes cost effective.

Worthington (1996), “Smart Card and retailer-who stand to benefit?” Paper

describes the major current payment options which are open to consumers, and accepted
by retailers with a review of the costs and benefits of each payment option. Retailers, as
the merchant acceptors of payment by suffer from the introduction of the smart card.
Article sets out to explore the pros and cons of the smart card for retailers. The
introduction of the smart card will not eliminate any of the existing method of payment
and it is probable that the smart card will even introduce new means by which
nonfinancial data, such as purchase patterns, can be collected and exchanged. There will
also be substantial costs involved for retailers such as upgrading thousand of stores and
head office systems, replacement of point-of –service terminals, training to thousands of
cashiers for the acceptance of smart cards. The smart card could be a useful addition to
the existing payment options at the point of service. It could offer retailers to access to
new delivery channels and better communication channels and help to maintain
relationship with customers.

Chan Ricky (1997), “Demographic and attitudinal differences between active and
inactive credit cardholders–the case of Hong Kong,” The study was to examine the
demographic and attitudinal differences between “inactive” and “active bank credit
cardholders in Hong Kong. The groups of card holders have been classified according to
their differences in usage rates. Active card holders” in this study were operationalized as
those whose monthly card usage rate was over ten times, where as “inactive card holders”
were those whose monthly card usage rate was below ten times. As far as, demography is
concerned, income was found to be the single most important variable influencing the
card usage rate. Specifically inactive card holders were found to earn less than their
active counterparts Paper also examine, to induce less resourceful card holders to
increase there card usage rate, card issuers are advised to strengthen their co-operation
with various retailers so as to turn their cards into the most preferred mode of payment.
Nash and

Sinkey (1997), On competition, Risk, and Hidden Assets in the Market for Bank
Credit Cards” show that the market for credit cards has been the subject of recent
attention and controversy because of “High” profits earned on credit cards and substantial
premiums on the resale of credit card receivable. This paper estimates risk-return profiles
for credit card banks and explores the role of intangible assets in determining resale
premiums on credit card receivable. In addition, the effect on resale market of
securitization and the opportunity cost of acquiring new accounts are analyzed. Using
alternative measure of risk and alternative control groups, authors find, for the year 1989
to 1995, that Credit-Card banks earned significantly higher return on assets but that these
returns were associated with greater risk-taking.

Black and Morgan (1998), “Risk and democratization of credit cards”. Research
paper show the dramatic rise in credit card chargPhonePeoffs in the midst of a vigorous
expansion suggest that bank card borrowers have become inherently riskier. This paper
investigates how the mix of credit card borrowers has changed in recent years, and how
those changes affect delinquency risk. The new card holders seem riskier along several
dimensions. They tend to earn less, and as a result, they owe relative to income. This rise
in debt burden almost certainly contributed to the rise in charge offs, since debt burdens
are a key determinant of delinquency risk. Cardholders are also more likely to work at
relatively unskilled blue collar jobs. This occupation shift may also have contributed to
the rise in chargPhonePeoffs, since delinquency rates are higher in those occupations,
perhaps income is more cyclical. Some of the personal characteristics and attitudes that
have changed, such as martial status and job tenure also imply somewhat higher risk.

Fernand (1998), “What credit card firms won‟t tell you.” shows that convenience
of credit card is not without its cost. The author warned the customers to use the card in
effective and in a rational way because while choosing a particular card, the cardholder
need to check different cost like annual fees, transaction fees, membership fees, and
interest on revolving credit, lost card liability, reward point and facilities attached to
different cards. Sometimes attractive facilities caught the cardholders in their debt trap if
they don‟t appraise the card before using it. It happens in the normal course, that card
companies won‟t tell each and every thing to cardholder like whether interest charges are
annually or monthly, transaction fees for using ATM , annual fees VS. transaction fees,
lost card liabilities for unauthorized use of card etc. According to author the card pushers
offer a convenience but a good thing never comes with any strings attached.

Gambir (1998), “Credit cards in India”. He describes that credit cards are
relatively new to India. Treated as a status symbol and as a vehicle of consumerism
Indian banks burst this business. Till recently as it did not go along very well with the
spirit of people because they do not have much money to spend because of bad economic
conditions. But with increasing economic and financial liberalization and growing
prosperity of the urban middle class banks fells that it is desirable to enter into this line of
business. Author feels that Credit Cards and money transfers with latest technological
changes would definitely reduce the burden on cash in our system. Therefore, RBI has to
give an impetus to the popularity of plastic money which is consistent with present policy
of economic and monetary liberalization.

Carow and Kenneth (1999), “Debit, Credit, or Cash: Survey evidence on Gasoline
Purchases.” analyzed the consumer‟s payment option to use debit, general purpose credit
cards, gasoline credit cards, or cash. Based on the results from a nested multinomial logit
model, author‟s found consumers are more likely to use cash when they have less
education , lower incomes, are middlPhonePeaged and own fewer credit cards. Debit and
credit card users are younger, more educated and hold more credit cards. Respondents
who use their debit card are less likely to use their gasoline credit card. The result
suggests that greater debit card usage will place the greatest competitive pressure on the
gasoline credit card program.

Plouff, Yandenbosch and Hulland (2000), “Why smart cards have failed looking
to consumers and merchant reactions to a new payment technology” describes that more
than a decade, bankers and other outside financial services community such as hardware
manufacturers have sought to solidify the place of smart card technology as a viable retail
point-of-sale alternative and, more boldly, as an outright replacements for cash in
everyday consumption situations around the globe. Despite strong development efforts
and numerous fact- finding market trials, many banks have found smart card technology
to be a losing proposition. This article presents a detailed case study of both consumer
and merchant adoption of one smart card –based retail point-of-sale system. The system,
called “Exact”, was test marketed for a full year in Canadian market. Various perceptual
and demographic data from consumers as well as firm –level data from retailers are both
presented and assessed. The ensuing discussion offers pragmatic suggestions for those in
the financial services community as to how the apparent difficulties and shortcomings of
smart card technology may be overcome.

Steindl (2000), “Credit cards, Economization of money, and Interest Rates.”

shows the effect of interest rates on use of credit cards, which are increasingly used to
finance consumption. The corollary is a reduction in money demand, which reduces the
interest rates. Greater credit card usage increases the demand for credit, which raises the
interest rate. Three models employing a credit market are used to resolve the problem.
The principal result is that each establishes that the interest rate must rise. An additional
implication is the counterintuitive result that credit does not simply substitute for money
in financing expenditure; rather increased credit card use must result in increased
consumption expenditure.

Warwick and Mansfield (2000), “Credit card consumer: college students

knowledge and attitude”. Given the proliferation of the credit card industry in today‟s US
household, and the aggressive promotional tactics employed to get college students to
sign on as customers. This exploratory study takes a look at the credit card activity of
college students at Midwestern campus. The majority of students surveyed did not report
knowledge of their credit card interest rate. Students appear to have a realistic attitude
toward using credit cards, although not knowledgeable about the details of their card.
This study raise the question of whether universities and business schools are doing a
better job of preparing their students to be knowledgeable consumers in the market place
or not.

Leung and Lai (2001), “Improving the quality of the credit authorization processes
a quantitative approach”. This paper proposes that the quality of a company‟s
authorization system should be measured by two major considerations. First, the system
should enhance quality of customers service by reducing the waiting time at the point of
sale. Second, it should reduce the risk of accepting transactions of bad credit. In this
paper, a major credit card company is used to demonstrate how the credit authorization
process can be improved using a quantitative approach. Opportunities for quality
improvement were first identified though brainstorming sessions with top management,
by using quality improvement tools. A queuing model was then used to redesign the
authorization process. Finally, simulation model was used to test and evaluate the new
process design. As a result of these improvements, it was determined that more than
US$2.5 million were saved annually and authorization efficiency was improved by more
than 40 percent.

Azhagaiah (2002), “Credit creation through plastic money.” This paper focuses the
issues of credit cards usage among consumers. It exhibits the recent development,
evaluate the present status ad assesses the future of the consumer indebtedness by credit
card debt. It also discusses the financial position of the banking sector in India. Strategies
used by the banks to meet competition in credit/debit cards are also discussed. Credit to
individuals and house holds has a vital role to play to create bank‟s credit and money
supply. Author point out that the role of credit cards in the money market, in the years to
come, will be very bright. There is no doubt, the banks which concentrate more on credit
cards will get more benefits by means of credit creation.

Lee, Jinkook (2002), “Consumers Use of Credit Cards: Store Credit Card usage as
an Alternative Payment and Financing Medium.” asserts consumers use of storeissued
credit cards with particular attention to their function as an alternative payment and
financing medium. Using 1998 survey of consumer finances data, the researchers found
that credit availability through bank cards is negatively correlated with consumer use of
store cards as a financing medium, suggesting the role of store cards as a supplementary
credit line. A negative relationship is also found to exist between consumer‟s bankcard
usage and their use of store cards for a transaction purpose, indicating that store cards
function as a substitute payment medium. Consumer‟s usage of store cards varies
according to function and is related to number of variables including the use of bank
cards, credit history, and attitude towards credit, income, education and ethnicity.

Chakravorti (2003), “Theory of credit card networks: A survey of the literature”

shows that credit card provide benefits to customers and merchants not provided by other
payment instruments as evidenced by their explosive growth in the number and value of
transactions over the last 20 years. Recently, credit card networks have come under
scrutiny from regulators and antitrust authorities around the world. The cost and benefits
of credit cards to network participants are discussed. Focusing on interrelated bilateral
transactions several theoretical models, have been constructed to study the implications
of several business practices of credit cards networks.

Gupta (2003) “Legal and regulatory framework of credit cards” asserts that the
regulations of credit card business in India is diffused and need to be streamlined.
Whereas in developed countries the law on credit card business in comprehensive and
straight forward, its Indian version requires a structural change. Hence, there is a need to
explore that various legislative premises of the inferior and unclear Indian version for
protection of interest of cardholders and healthy growth of the industry.

Saha (2003), “The booming credit card business of Indian banker.” In this study
analysis has been done of the credit card business in India. Article is both from the
banker point of view and from the users point of view. It is estimated that the credit card
volume is increasing around 15% p.a. on average for last 10 years and volume of
transaction increased by 20% on an average in last 10 years in India. Various hypothesis
and objectives are set to find out which bank offer varieties of services to consumer in
relation to credit card. A comparative analysis is made for all the credit cards. In general,
most of the credit card is doing very well and the competition is cut throat. Different
factors such as income level, fees customers‟ service network, add on card facility,
revolving credit facility, insurance facilities, cash withdrawal charges, lost card liabilities
etc. taken into account for selecting the best credit card provider in country. The study
also finds that city bank is the best card which provides all the facilities at the minimal
charges.

Bandyopadhyay (2004) in his article “Credit cards look for an Ace” put the light
on various issues like, major card players are issuing cards without much checking
credentials. It adds to non performing assets [NPA] levels in its portfolio but overall,
about 0.6 percent of personal consumption expenditure in India is through credit cards.
He suggested that (I) the increasing card use could be by making all utility payments
through cards by installing more electronic draft capture (ii) the government can do by
waiving the tax on credit cards which is a big disincentive for card users (iii) to bring
down the default rate, bank must set up credit bureau. This will enable banks to detect the
first sign of default in advance and sound a red alert so that prospective defaulters can be
weeded out.

Bhargava (2004) title “Debit cards: A new generation plastic money” analyses that
debit cards are fast catching up with the customers. A combination of factors like ease of
availability, debit-averse profile of customer and zero interest rates are propelling the
usage of Debit Cards. The study emphasizes to increase the usage of these cards, bank
will need to improve infrastructure and continues to focus an increasing installations of
point of sale [POS] in smaller cities and on the locations which are frequently used by
cardholders, and to develop new marketing programmers that educate customers on the
benefits of replacing cash with plastic.
 Braunsberger (2004), “The effectiveness of credit–card regulations for vulnerable
consumers”. The study investigates how vulnerable consumers (i.e. College students)
might respond to the revised credit card disclosure requirement (i.e. amendments in Truth
in Lending Act) and investigates credit card knowledge of college students. The study
examine external validity issues, that is, whether urban college students are more
knowledgeable about credit cards than rural students, and whether adult populations are
more knowledge than student populations. This study further investigates the relationship
among objective and subjective knowledge and product usage. The result shows that
consumer in general are not very knowledgeable about credit cards. In order to avoid
government regulation of the industry, it is recommended that credit card issuers become
involved in educating consumers.

Cunningham (2004) “College Student credit card usage and the Need for on
campus financial counseling. And planning services”. The purpose of this study was to
examine the use of credit cards among college students and the need for on-campus
financial counseling and planning service. The research objective was two fold: (a) to
determine if college students are responsible with their credit cards and (b) to evaluate the
need for on-campus financial counseling. Participants in the survey (N=110) completed a
survey consisting of various question about students‟ use of credit cards. Results showed
that while a majority of the students who completed the survey were very responsible
with their credit cards, there as a group (composed of study) who were having significant
credit problems. The paper concludes with suggestion regarding on campus financial
counseling services.

Easwar and Kumar (2004) asserts in the studies titled,” Credit cards: on a growth
trajectory” that the perception of owning credit card has changed and they are viewed as
being convenient substitute to carrying cash and also availing credit for short period. But
in the context of home country, India ranks at the bottom in terms of usage of credit
cards, when compared to China, Taiwan and Malaysia.
 Goyal (2004) “Role of supplementary services in the purchase of credit card
services in India” describes that service products being intangible and experiential in
nature are different to evaluate prior to purchase and consumption. Consumers perceive
risk while purchasing services and rely on various information sources to make a
purchase decision. In services, personal sources of information and considered more than
non personal sources of information. The present study focuses on understanding the
significance of supplementary services as non personal source of information of
consumers for prPhonePepurchase evaluation of credit card services. In other words,
whether information regarding supplementary services can help consumers make
prPhonePepurchase evaluation of credit cards. In addition to prPhonePepurchase
evaluation, the impact of supplementary services is studied towards post-purchase
evaluation credit card services. Supplementary services being a part of full service
product offer by marketers can be utilized as a beneficial tool to create interest and
developing awareness among consumers. Hogarth and

Hilgert (2004) “Consumers resolution of credit card problems and exit behaviors.”
Using data from the survey of consumers, this study focuses on consumer‟s resolution
efforts with credit card problems and the likelihood of “exiting”- that is, discontinuing the
use of a given credit card or of the financial institutions associated with the card. Among
all households with a problem, nearly two-thirds (63 percent) were able to resolve their
problem, while over half (55 percent) exited. Exist was associated with marital status,
race, how dissatisfied the consumer was, the number of problem related to credit cards,
and attribution. Holding all the else constant, consumers who were likely to resolve their
problem were only half as likely to exist. Thus, credit card companies need to carefully
and quickly address their customer problems and resolve their complaints.

Humphrey (2004) “Replacement of cash by cards in US consumer payments”

Authors uses over the past 25 years time series data. The results shows that the share of
cash in consumer payments appears to have fallen from 0.31 in 1974 to 0.20 in 2000,
cheques replaced cash during the 1970, credit cards replaced some cheques during the
1980, while debit cards replaced both cash and cheques in the 1990s. Author feels even
though, cash is not projected to go to zero anytime.

Prasad (2004), “Product innovation-A suggestion from a Reader: KCC vs. ATM”
article examined the utility of Kisan credit card from the point of view of both the Kisan
Credit Card (KCC) holders and commercial banks. It is an innovative product designed
by the government of India (GOI) in consultation with RBI/NABARD. The facility of
issuance of “cheque Books” to KCC borrowers is one of the important improvement. But
this product needs further improvements by making it a technology driven to extension of
Automated Teller Machine (ATM) to agriculturists in rural and semi-urban areas. “KCC
ATM CARD” provides benefits to agriculturists as well as to commercial banks.
Agriculturists gets instant cash for agriculture inputs such as fertilizers, seeds, pesticides
and overdraft facility to current account holder holding “KCC ATM CARD” which
involves no cost and boosting self–esteem among farmers. On the other hand, by
providing the ATM facility, the commercial banks can reduce fixed cost per transaction.
Author feels that by extending technology driven products will boost the image of
commercial banks and helps to enlarge the base of his value agriculture advance which
could attract the more farmers to commercial banks.

Swan (2004) made a survey on credit cards,” A credit card: A competitive

market”. It observed that with the more entrants in the field of credit cards, major players
are trying to gain a market share with aggressive promotional strategies and additional
value added services. Some banks though offer international level of services and credit
support to card holders but had failed to make an impression in the market due to lack of
awareness and low key advertising. It also observed that in spite of aggressive effort of
the banks, vast majority of the Indian population is yet to come to grips with credit cards.

Jagdeesh (2005), “Credit card fraud: causes and cures from professional‟s
perspective.” Put a light on credit card fraud which is increasing worldwide. The culprit
is not only the outsiders but insider fraudsters who cheat their organization to make quick
buck. Bank credit card issuers lose about $1.5 to $ 2 billion every year because of fraud.
The VISA and the Master Card, the two largest credit card issuers lose most. Major credit
card frauds like unauthorized use of credit cards, on line frauds, shave and paste of card,
counterfeiting. mail order fraud are the techniques used by the fraudster. The author also
discusses the tips for prevention of frauds like using smart cards, computer edits, PIN
numbers, and suggests that it is in their own interest that the cardholders should keep
their cards safely and use the cards wisely to protect themselves from frauds.

Johnson (2005), “Recent development in credit card market and the financial
obligation ratio” exhibits that over the past fifteen years, U.S. household in the aggregates
have devoted an increasing share of their after tax income to the payment of financial
obligations. Much of the increase is attributable to a rise in the level of credit card debt,
which has raised the share of households‟ aggregate after tax income that is devoted to
credit card payments. This article argues that three important developments in the credit
card market over the period account for most of the rise in credit card payments relative
to income and played a strong role in the rise of the total financial obligation ratio (FOR).
First, improvements in credit scoring technology and the advent of risk based pricing of
credit card debt have increased the share of housPhonePeholds particularly lower income
house holds with a credit cards. Second, in the 1990‟s , credit card interest rate begin to
vary with changes in broader market interest rates, which in turn led to an especially
pronounced decline in credit card interest rates turned sharply lower; the decline in credit
card rates raised the demand for credit card debt. Finally, household have increased their
use of credit card as a convenient means of paying for daily purchases.

Park and Burns (2005), “Fashion orientation credit card use, and compulsive
buying.” The study was to identify the direct impact of fashion-related factors on
compulsive buying and the indirect impact of fashion-related factors on compulsive
buying through credit card use. It was found credit card usage to be the most influential
factor followed by expenditure on fashion goods. Research shows that fashion orientated
consumers are heavy credit card users. Consumers who tend to have fashion leadership
and know the importance of being well dressed might use their credit card more while
those who have anti–fashion attitude are least likely to use their credit cards. The authors
observe that the credit card is the most significant factor in encouraging compulsive
buying and suggest that since other antecedents of such behavior are hard to pin down,
regulatory action should focus on the control of credit.

Pinto and Beth (2005), “Information learned form Socialization Agents: Is

Relationship to Credit Card Use.” Shows that credit card use among college students has
reached at unprecedented level. As a result, there is a movement to educate college
students for usage credit card in a better way. This research examines the credit
information provided by four socialization agents (parents, peers media and schools). In
addition, it assesses the relationship between these socialization agents and the credit
usage behaviour of college students. Using paired sample „t‟ tests, the results indicate that
the amount of credit information given by parents is significantly greater than the
information from the other three sources (Schools, Peers and media). The more
information provided by parents, the lower the outstanding balance carried by college
students on their credit cards. Media sources, educational sources and peer sources of
information showed no significant relationship with credit use.

Sant (2005), “Credit cards emerging Trends and Prospects” shows benefits,
growth/potential growth, usage pattern, technological changes, delinquency rates, and
fraud settlement, by the credit card companies. Survey shows that spend per card in India
are very low at around Rs. 20,000 per year against international average of around $900
(i.e. about Rs. 40,000) per year per card. Demands have increased for higher quality and
level of services. Major card issuers in India, domestic and foreign, are currently busy
racking their brains in trying to protect their organizations from frauds. To overcome this
problem a new technology i.e. “Smart-Card” that allows for greater security against
fraud. Authors feels that with the establishment of credit information bureau of India Ltd.
(C/B/L) customer had motivation to maintain good credit history and helps in lowering of
delinquency rates. Article also shows that credit card industry grows by 37% with ten
million cards in circulation.

Al-Alawi and Al-Amer (2006), “Young Generation Attitudes and Awareness

Towards the implementation of Smart Card in Bahrain: an exploratory study. The study
puts a light on latest advancement and innovations in the world of information and
communication technology by the way of smart card. A smart card resembles in size and
shape to a normal credit card or bank ATM card, with a microprocessor chip implanted
into card. These cards are used not just as identity cards, but hold a relatively huge
amount of editable information including the cardholder‟s bank data, PhonePepurse,
finger print, health record, blood group, traffic and license details and other vital
information. Study present a general overview history, features application and
introduction of smartcards in the kingdom of Bahrain. A total of 513 questionnaires were
distributed to the students of the University of Bahrain. The questions asked included
question to check the acceptance of the people to replace their current cards with a smart
card and their awareness of the new National Smartcards in Bahrain. It also evaluates the
effects taken by the government to create awareness among the public about the usage
and features of the smart cards.

Worthington (2007) “The adoption and usage of credit cards by urban-affluent

consumers in China”. The purpose of this paper was to present exploratory research into
the holding and usage of credit cards by a distinct segment of the Chinese population,
who were “early adopters” of this product. Primary data was collected for taking sample
of the urban affluent population in china to gauge preferences and attitudes towards the
use of credit cards. The sample was drawn from a narrower base than the actual target
population of urban-affluent market but an available and valid respondent set, which
offers insights into the “early adopters” of the credit card product in china. It was found,
that the respondent were comfortable with the holding and use of credit cards particularly
recognized their value for spending on travel and entertainment. The research also
identified purchase trigger points, which indicated that the use of credit cards for
purchases above certain values, is already prevalent with the sample of urban – affluent
Chinese consumers.

Devlin (2007) “An Analysis of main and subsidiary credit card holding and
spending.” This study seeks to examine why most multiple credit cardholders have a
“main” card (i.e. a card used more often than others) and “subsidiary” cards (i.e. cards
used less often or only in an emergency) and the spending pattern associated with main
and subsidiary cards. This study is a qualitative in nature, using a survey which contained
open-ended questions to acquire data. Response were subject to content analysis to
categories the reasons given for having a main and subsidiary card. Results show that 85
per cent of the 141 respondents indicated that they had a main card and the most
frequently quoted reason for having such a card was the superior discount and
promotions which were offered by the card issuer. Not surprisingly, main cards were
used for the broadest range of transactions while subsidiary cards were used for a more
restricted range of transactions, a majority saying that their subsidiary cards were held for
“stand by purpose”. The results suggests that managers who market credit cards should
aim to ensure that, in all times, the discount they offer, the promotions they arrange and
their loyalty schemes are superior to those offered by competitors. By meeting these
aims, higher number of consumers, who are multiple cardholders, are likely to use their
card as a main card, thereby generating more income for their credit card issuer.

Amin (2008), “Factors affecting the intentions of customers in Malaysia to use

mobile phone credit cards” shows that mobile phones have provided an opportunity for
banking institutions to introduce new services to the public. The latest service, which is
now available in Malaysian banking institutions, is the mobile phone credit card. The
purpose of this paper is to provide a preliminary investigation of the factors that
determine whether Malaysia‟s bank customers will use the new mobile phone credit card
technology. Paper extends the applicability of the technology acceptance model (TAM)
to mobile phone credit cards and includes “Perceived credibility (PC)”, the “amount of
information about mobile phone credit cards (AIMCs)” and “perceived expressiveness
(PE)”, in addition to “Perceived usefulness (PU)” and “Perceived ease of use (PEOU)”.
The result indicate that PU, PEOU, PC and the amount of information contained on
mobile phone credit cards are important determinants to predicting the intentions of
Malaysian customers to use mobile phone credit cards. However, PE is not an important
determinant in predicting the intentions of Malaysian customers to use mobile phone
credit cards.

Gan (2008) “Singapore credit cardholders: ownership, usage patterns and

perceptions.” The purpose of this study is to analyse Singapore‟s diverse cardholders in
search of variations among demographic groups, credit card profiles, and their
perceptions with regard to credit card ownership and use. It then aims to discuss possible
reasons governing Singaporeans‟ credit card ownership and use. In this study, decision
trees were constructed using chi-square technique to examine the association between
number of credit cards and the demographic characteristics, perceptions and other credit
card-related variables. The number of credit cards was found to be significantly
influenced by income and gender as well as perceptions that include “credit cards leads to
over spending”, “Saving as payment source”, “unreasonable interest rates”, “credit card
as status symbol.” The number of credit cards was also affected by credit-card-related
variables such as missing payments sometimes, frequency of use, entertainment
expenditures, and patrol purchase. This research provides an in-depth understanding of
Singaporean multiple cardholders, thus it is useful in designing marketing strategies for
card-issuers as well as anti-debit strategies for policy-makers in Singapore.

Al-Laham (2009) in his research “Development of Electronic Money and its

Impact on the Central Bank Role and Monetary policy” asserts that, in recent years there
has been considerable interest in the development of electronic money schemes.
Electronic money has the potential to take over from cash as the primary means of
making small-value payments and could make such transactions easier and cheaper for
both consumers and merchants. Electronic money is a record of the funds or “value”
available to a consumer stored on an electronic device in her possession, either on a
prepaid card or on a personal computer for use over a computer network such as the
internet. This paper argues that electronic money, as a network goods, could become an
important form of currency in the future. Such a development would influence the
effectiveness and implementation of monetary policy. Author feels that, if an increased
use of PhonePemoney substantially limits demand for central bank reserves, it would
require changes in the operational target of the central bank and a closer coordination of
monetary and fiscal polices.
COMPANY PROFILE

PhonePe is a company that develops a mobile payments app. The application

allows users to transfer money instantly to anyone, by using just their mobile
number. The Company‟s app is used in a smartphone with data connectivity and a bank
account linked to a user‟s mobile number.

FxMart received its licence to operate on 26 August 2014. PhonePe was

incorporated in December 2015. In April 2016, the company was acquired
by Flipkart. and as a part of the Flipkart acquisition, the FxMart license was transferred to
PhonePe and it was rebranded as the PhonePe wallet. PhonePe's founder Sameer Nigam
was appointed as the CEO of the company.

In August 2016, the company partnered with Yes Bank to launch a UPI-based
mobile payment app, based on the government-backed UPIplatform.

n October 2017, PhonePe launched a POS device built in India. The Bluetooth enabled
POS device looks like a calculator and works with AA batteries. The hardware uses
Bluetooth connectivity and enables payments through all the mobile devices that can
access the PhonePe app.

In January 2018, PhonePe partnered with Freecharge. This partnership has

empowered PhonePe users to link their existingFreeCharge Wallets to the PhonePe
app. PhonePe has also entered into similar partnerships with Jio Money and Airtel
Money.

PhonePe also partnered with RedBus, Ola and Goibibo to launch micro-apps on its
platform to build and deploy apps on its platform with a unified login and payments
experience for users.

In September 2019, PhonePe unveiled 'PhonePe Switch' for integrating several

other merchant apps to help users to switch between PhonePe and other apps.
In January 2020, PhonePe started allowing its customers to withdraw cash using the in-
app UPI feature called PhonePe ATM. This involves transferring the intended amount to
be withdrawn to a nearby PhonePPhonePeenabled merchant.

On 14 January 2017, ICICI bank blocked PhonePe transactions, citing the reasons
that it did not meet the NPCI guidelines. Initially, on 19 January 2017, NPCI
instructed ICICI to allow UPI transactions via PhonePe. During this period, Airtel too
blocked PhonePe transactions on its platforms. A day later, on 20 January 2017, NPCI
renounced the previous instructions citing the reason that PhonePe indeed violated the
UPI norms.

After this, PhonePe closed its operations on Flipkart's website, to align itself with
the terms stated in the updated verdict from NPCI. By February, 2017, PhonePe resolved
the issues with ICICI.

Our goal is to make digital payments so easy, safe and universally accepted that
people never feel the need to carry cash or cards again. We believe India is at the cusp of
a new mobile revolution, which will change the way we manage our money on the go.
We see ourselves facilitating this change, through technology and dogged customer
centricity.
SCOPE OF THE STUDY

Provide access to financial payment services to every citizen along with ability to
conduct card / digital transactions.
Digitalize Government collections by equipping each collection point with a
method to accept card/digital payments.
Migrate payment transactions from cash dominated to non-cash through
incentivization of card digital transactions and disincentivization of cash based
transactions.
Enhance acceptance infrastructure in the country to promote digital transactions.
Encourage corporate, institutions and merchant, establishments to facilitate card /
digital payments.

Short Term Steps

The Short Term Steps for Promotion of Payments through Card / Digital Means, which
will be implemented within one year, are suggested as follows:

A. Promotion of Card / Digital Transactions in Government Payments and

Collections

Government Departments/ Organizations / Central Public Sector Undertakings/

Anchor Networks shall take steps to (a) withdraw convenience fee / service charge
/surcharge on customers who prefer to make card/ digital payments for essential
commodities, utility service providers, petrol pumps, gas agencies, railway tickets/
IRCTC, tax department, museums, monuments etc.; (b) take appropriate steps to
bear MDR cost like other merchants; and (c) build acceptance infrastructure
(POS/ Mobile POS terminals) for card / digital payments at all collection centres.
Ministry of Road Transport & Highways / Ministry of Urban Development shall
facilitate the use of existing open-loop systems issued by a bank for multipurpose
 use, including for making transit payments with a dedicated application (eg. Toll
fees, metro rail and bus services, etc).
Department of Financial Services/ RBI shall ensure that each eligible account
holder under PMJDY may be provided access to the digital financial services in
addition to the "RuPay Card".
Ministry of Electronics & Information Technology shall formulate an action plan
to ensure Government Departments/Organisations introduce appropriate
acceptance infrastructure and facilitate collection of all revenue, fee, penalties etc.,
through card/ digital means beyond a specified threshold, through "PayGov India"
or other mechanisms.
Ministry of Electronics & Information Technology shall develop 'PayGov India' as
a "single unified portal" across central, state governments and their public sector
undertakings for collection purposes.

B. Measures for Wider Adoption of Card/Digital Transactions

Department of Financial Services/RBI shall take steps to (a) rationalize Merchant

Discount Rate (MDR) on Card transactions; and (b) formulate a differentiated
MDR framework for some key transaction segments, such as utility payments and
railway ticketing by examining the matter holistically in consultation with the
stakeholders.
Department of Financial Services/RBI shall relax Two Factor Authentication for
both card present and card not present transactions below a certain specified
amount. DFS/ RBI shall work out a multi tired authentication framework for low,
medium and high value transactions.
Department of Revenue shall take steps to remove double taxation, if any, on
service tax currently paid on MDR by the acquiring bank and on interchange fee
by the issuing bank.
 Wherever needed, the Departments/ Ministries shall make modifications in the
Rules and Regulations that may have been issued, so that appropriate change is
incorporated to allow payments / receipts by using cards/ digital means also. Cash
payments by any Government Department/ Agency shall be allowed only under
very specific circumstances for clearly stated reasons.
Department of Revenue/ Department of Financial Services shall mandate
payments beyond a prescribed threshold only in card/ digital/cashless mode.

C. Creating Acceptance Infrastructure

Department of Financial Services/ RBI shall introduce of formulae linked

acceptance infrastructure for different stakeholders of certain card products
through appropriate ratio of POS terminals/ mobile POS terminals to cards issued
or other means. The possibility of creating an Acceptance/ Financial Inclusion
Fund for the purpose shall be explored.
Department of Financial Services/ RBI shall rPhonePeexamine requirements under
PML Act and Rules, for bringing Uniform (Know Your Customer) KYC norms
based on an authorised identity for all payment systems, including Unique
Identification Number or other proof of identity. Appropriate steps shall also be
taken to introduce tiered KYC for facilitating low, medium and high value
transactions through cards and digital means.
Department of Financial Services/ RBI shall amend and simplify the Merchant
Acquisition guidelines to include Unique Identification Number or other identity
based eKYC for merchants.
Department of Financial Services / RBI shall take steps to allow enhanced
Cashout, of a specified amount, at Point of Sale (PoS) Terminals through Cards/
Digital means.
D. Encouraging Mobile Banking/ Payment Channels

Department of Telecommunications shall take appropriate steps for

rationalization/ reduction of USSD Charges and the feasibility of its being charged
only on successful transactions.
Department of Telecommunications/ Department of Financial Services/ RBI shall
make a provision for a unified USSD platform which can support transactions
across all payment mechanisms.
Department of Financial services/ RBI shall promote Mobile banking to leverage
upon the huge infrastructure available at lower cost. Towards this end, steps shall
be taken to address mobile banking registration and activation challenges; ease
regulations and reduce entry barriers to digital wallets/ prPhonePepaid instrument.

E. Awareness and Grievance Redressal

Department of Financial Services/RBI shall take steps (a) to create necessary

assurance mechanisms for fraudulent transactions wherein, in case of a fraudulent
transaction, the money will be credited back to customers‟ account and b locked
and subsequently released after the investigation is complete, within maximum of
2 - 3 months; (b) to strengthen the role of banking ombudsman to provide greater
customer confidence and (c) to formulate a comprehensive customer protection
policy for transactions through cards and digital means.
Department of Financial Services/RBI shall take steps to optimally use funds
under Depositor Education and Awareness Fund (DEAF) for expanding
acceptance infrastructure and conducting awareness campaigns for a less cash
society.

Medium Term Steps

The Medium Term Steps for Promotion of Payments through Cards / Digital Means,
which may be implemented within two years, are suggested below:
Department of Financial Services/RBI shall frame necessary guidelines for
merchant payment standards and interoperability between various issuers and
acceptance networks, including telecom, internet, prPhonePepaid instrument
providers and Payments Banks, to ensure that merchant payments are
interoperable across the broad spectrum of payments and settlements system.
Department of Economic Affairs shall constitute one or more Committees with
key industry stakeholders, RBI and concerned Government Departments to review
the payment system in the country. The following issues, among other, may be
addressed by the Committee:
1. Need for changes, if any, in the regulatory mechanisms under the Payments
and Settlement Systems (PSS) Act, 2007 and, in other legislations affecting
the payment ecosystem.
2. Leveraging unique identification Number or other proof of identity for
authentication of cards digital transactions and setting up of a Centralised
KYC Registry.
3. Introduction of single window system of Payment Gateway to accept all
types of Cards / Digital payments for Government receipts and enable
settlements between consumer and merchants via NPCI or other agencies
within specified timelines.
4. Studying feasibility and framing rules for creating a payments history for
all ca rd/ digital pay
Department of Revenue/ Department of Economic Affairs/ Department of
Financial Services shall grant tax rebates/incentives or introduce mechanisms for
cash back/lottery or any other measures to incentivise transactions through cards
and digital means.
Department of Financial Services/ RBI shall develop a methodology for enabling
very high value transactions through cards and digital means beyond the limits
presently prescribed.
RESEARCH METHODOLOGY
This studied have been carried out on PhonePe Payment System. Data used in this
study collected basically from the secondary sources. Primary data also collected through
personal interview method conducting the person who is supposed to have knowledge
about the topic. Secondary data have been collected from various sources including
websites, newspapers, various published and unpublished article about prPhonePeprimary
education etc.

Survey Instrument

Questionnaire sent to the person concerned with request to answer the questions
and return the questionnaire. The questionnaire is sent to respondent who expected to
read and understand the question and write down the reply in the space meant for the
purpose in questionnaire itself. A questionnaire consists of a number of questions printed
or typed in a definite order on a form or set of forms. The respondent to have answered
the questions on their own. Objective type questions have been designed in survey .Some
responses have been collected from people. Like (student, Professional and others). The
result of survey shown in graphs. The questionnaire designed on PHONEPE Payment
System .Five points like Agree, Disagree, Strongly disagree, and strongly agree, Neutral.

Data Collection
The data collected were analyzed for the entire sample.

Result
This is a descriptive research which has studied the present conditions. The relevant data
was collected based on PhonePe system and which PhonePe payment type of most
suitable.
DATA ANALYSIS & INTERPRETATION
Studied have been carried out on PhonePe system Questions are related to
PhonePe system in which given options are Agree, Disagree, Strongly disagree, Strongly
agree, Neutral.

Overall Analysis of PhonePe System on the basis of Survey

Questions Agree Disagre Strongl Strongl Neutral

e y y
disagree agree
1.PhonePe System saves your 78 30 15 68 9
time and
money.
2.PhonePe system is better than 60 69 15 38 18
offline payment system.
3.PhonePe system open 24 hours 68 32 27 50 23
a day.
4.Exchange money from one 70 43 11 64 12
location to
another location.
5.Large no. of user satisfied in 52 50 21 52 25
this.
6.Get quick response in this. 54 30 22 74 20
7.Reduce paper work. 97 20 14 63 6
8.It is reliable service. 73 47 49 23 8
9.Hacker can access to digitized 95 7 6 73 10
information
and record of PhonePe.
10.Customer has to be alert, he 83 6 4 106 1
must deal with secure site in
which using PhonePe
system.
11.Need internet and PhonePe 85 56 15 37 7
system use experience.
12.Gateway play important role 70 8 3 112 7
in PHONEPE
payment system.
13.Chance of making mistakes. 93 43 14 32 18
14.A greater choice for consumer 94 26 20 37 23
and merchant in the way they
send and receive
payment.
15.The trend is buying goods and 93 19 4 68 16
services
over the internet from online
shop.
16.Consumer can transfer money 92 12 18 42 36
easily
without having to visit a bank.
17.The debit card had slow 78 14 3 77 28
started
a
nd there growth only took off in
last three year.
18.Consumers and suppliers can 68 33 6 78 15
be directly
approached over the Internet.
19.Customer can easily used only 56 52 36 40 16
payment
syste12m convenient and
immediate access to fund
deposit via debit
card.
20.Transaction costs are hidden 88 31 20 31 30
from user.
21.It provides a legal record of 98 12 8 62 20
business communications.
22.To reach out to global 57 31 36 59 17
consumers easily
and is also cost effective.
23.PHONEPEPayment is not 55 49 52 36 8
simple anywhere and
in any currency thus matching the
global reach of the internet.
24.PHONEPE Payment system is 21 44 108 15 12
not used directly by individual to
make the payments to other
individual.
25.PHONEPEPayment provide 100 22 6 65 7
greater freedom to individual in
paying their taxes , licenses, fee,
funds etc.
26.PHONEPEcheque clearance is 78 34 63 7 18
not easier than
paper cheque.
 27.Problem will not arise if your 65 27 29 70 9
debit card
lost or stolen.
28.PHONEPE Payment system 64 42 27 55 12
can be easily
understood and readily adopted.
29.PHONEPECash Payment 90 4 4 108 1
system bank issue
tokens to the customer.
30.Smart card is not helpfully for 13 61 108 8 10
small
transaction.

Overall analysis of PhonePe Payment System on the basis of survey

The given graph reveals the five options i.e.(Agree, Disagree, Strongly agree, Strongly
disagree, Neutral).

Graph represented the number of people agreed is shown-:

Maximum no. of people(100) Agree on Q no.25 PHONEPEPayment provide greater

freedom to individual in paying their taxes , licenses, fee, funds etc.Mostly people agree
on time saving ,24 hour open, get quick response. Minimum no. of people (13) Agree on
Q no.30 Smart card is not helpful for carrying out small transaction. Lesser number of
people are satisfied with PhonePepayment mode of transaction.
Graph represented the number of people Disagreed is shown-:

Maximum no. of people (69) Disagree on Q no.2 PHONEPEPayment system is better

than offline payment system. Mostly people disagree on transaction cost hidden,
satisfaction of user, smart card helpfully for small transaction. Minimum no. of people(4)
Disagree on Q no.29 In PHONEPECash Payment system bank issue tokens to the
customer. Less no. of people disagree on legal record of business communication. Many
people think that e payment system is not reliable, in which many mistakes can occur.

Graph represented the number of people Strongly disagreed is shown-

Maximum no. of people (108,108) Strongly disagree on Q no.24 &Qno. 30. Payment
system is not used directly by individual to make the payments to other individual. Smart
card is not helpfully for small transaction mostly people strongly disagree on cheque
clearance easier than paper cheque. Minimum no. of people (3)Strongly disagree on Q
no.17 The debit card had slow started and there growth only took off in last three year
.less no of people strongly disagree on easily understood, . Security is the big issue in e
payment system, hacker can access account information.

Graph represented the number of people Strongly agreed is shown-:

Maximum no. of people(113) Strongly agree on Q no.12 Gateway play important role in
PHONEPEpayment system. Mostly people strongly agree on save time, reduce paper
work, exchange money etc .Minimum no. of people(7) Strongly agree on Q no.26
PHONEPEcheque clearance is not easier than paper cheque. Lesser no of people strongly
agree on PhonePepayment system is not safe.
Graph represented the number of people Neutral is shown-:

Maximum no. of people Neutral on Q no.25 PHONEPE Payment provide greater

freedom to individual in paying their taxes , licenses, fee, funds etc. Mostly people are
Neutral on adoption easily, lost or stolen card .Minimum no. of people Neutral on Q
no.29 and 10 In PHONEPECash Payment system bank issue tokens to the customer.
Customer has to be alert, he must deal with secure site in which using
PHONEPEPayment system. Lesser no. of people neutral on experience of using payment
system need internet and pc experience.

Overall analysis on Credit Card, Debit card, Smart Card,PHONEPECash,

PHONEPECheque given below:-
On the basis of present study, first remark is that despite the existence of variety of
PhonePecommerce payment systems, credit cards are the most dominant payment
system. This is consequences of advantageous characteristics, most importantly the long
established networks and very wide users‟ base. Second, alternative PhonePecommerce
payment systems on debit cards. In fact, like many other studies, present study also
reveals that the smart card based PhonePecommerce payment system is best and it is
expected that in the future smart cards will eventually replace the other electronic
payment systems. Fourth , given the limited users bases, PhonePe cash is not a feasible
payment option. Fifth PHONEPE Cheque are quite cost effective for companies that have
to deal with huge volume of cheques Thus, there are number of factors which affect the
usage of PhonePecommerce payment systems. Among all these user base is most
important. Make it difficult to choose an appropriate payment system. On the basis of
analysis it is concluded that, smart cards based electronic payment system is best. It has
numerous advantages over the other electronic payment systems.

Reasons of consumers buying online through PhonePe

Here it can be noticed that maximum people purchase online for their convenience and
discounts. Convenience would be in respect to the availability of variety, products being
couriered at home or making payments online irrespective of different payment option or
keeping too much cash at home.

Goods or services that are purchased online

From the above graph it can be noticed that males from our sample tend to purchase
events or movies and pay utility bills online whereas the females also tend to purchase
events or movies apart from purchasing goods like apparels. Here it can be noticed that
apart from purchasing things online people also prefer paying the utility bills online
instead of standing in the line and convenience of online payments.
Payment gateway used while making online payments

From the above observations it can be noticed that maximum people chooses Cash on
Delivery (CoD), but if we collate other payment options below are the interpretations.

Payment Preference
There are various reasons that people are choosing the physical payments that is CoD
over online payment platforms, below are the given bifurcation.

Reasons for adopting an online payment platform

Here we can notice that the users prefer mostly upfront discounts and the payments that
can be tracked. From organisations point of view this helps in building trust and loyalist.

Influence towards online payments

It can be noticed that maximum influence are through friends and then family that people
shift to online payments. Here it is observed that word of mouth has influenced the
payment services. Many organisations have limited epayment platforms, so if the
consumer wants to purchase anything from that particular website, they have to choose
from the available platforms only, so to some extent the ecommerce platforms also
influence the same. For example in Myntra any product purchased and if it is required to
return, we have to download PhonePe App for getting the money refunded.

Most preferred online payment platforms

Threat of using online payments

From the observation it can be noticed that many agree that security and privacy are the
biggest concern that many consumers agree. The epayment users would preferably like to
stick with only one or two apps only, instead of sharing their bank details in various other
platforms. Once the users use some particular app they build up their trust on that app
only until and unless if they experience or hear a negative feedback they would switch
immediately.
CONCLUSION

Technology has arguably made our lives easier. One of the technological
innovations in banking, finance and commerce is the Electronic Payments. Electronic
Payments (PhonePe payments) refers to the technological breakthrough that enables us to
perform financial transactions electronically, thus avoiding long lines and other hassles.
Electronic Payments provides greater freedom to individuals in paying their taxes,
licenses, fees, fines and purchases at unconventional locations and at whichever time of
the day, 365 days of the year. After analysis and comparison of various modes of
electronic payment systems, it is revealed that it is quite difficult, if not impossible, to
suggest that which payment system is best. Some systems are quite similar, and differ
only in some minor details. Thus there are number of factors which affect the usage of
PhonePe commerce payment systems. Among all these user base is most important.
Added to this, success of PhonePe commerce payment systems also depends on
consumer preferences, ease of use, cost, industry agreement, authorization, security,
authentication, non- refutability, accessibility and reliability and anonymity and public
policy.

The Reliable and Cashless payment system offers immunity against theft of paper
and PhonePe money, and adopting PhonePe payment solutions or systems for different
reasons. In addition to cost reduction, reference was made to a number of other benefits,
including improved customer service, improved working capital, increased operational
efficiencies and cycle times, processing efficiencies and enhanced compliance to
organizational policies and procedures .This opportunities PhonePe payment operation
increases different levels of risks for marketing. More than ten Years of Internet
marketing research have yielded a set of important findings. Based on our review of these
findings, it is clear that the Internet is playing a more and more important role in the field
of PhonePe payment .peoples are becoming aware of the need to measure the
collaborative effects of PhonePe payment The study reveals that the peoples were not
aware and educated. They have not any knowledge of PhonePe payment. The study is
based on survey .The respondent have to answer the questions on their own. Some people
satisfy with our views. But some peoples are not satisfies with us. This study states that
Online PhonePe payment provides greater reach to customers. Feedback can be obtained
easily as internet is virtual in nature. Customer loyalty can be gain. Personal attention can
be given by bank to customer also quality service can be served.

We came to know various strengths of PhonePe payment System such as quality

customer service, greater reach, time saving customer loyalty, easy access to information,
24 hours access, reduce paper work ,no need to carry cash easy online applications etc.

Future Scope
Throughout our experience researching online payment systems we have learned
about many recent trends and new technologies involving these systems, such as using
PayPal, or using Safety Pay‟s Online Cash Payment Platform. You ask yourself, what are
some future trends of online payment systems? We have researched and discovered that
credit and debit cards will become obsolete, because we see the increasing development
of mobile technology and the internet industry. We see the development of new online
mobile payment technologies, which will help make your mobile device extremely
flexible, because you will be able to store credit and debit card information on your SIM
card. How will a consumer be able to use this technology to purchase from a certain
website? When you reach the payment page on the website, your mobile device
recognizes it and suggests a type a payment. After you pick your payment choice,
authorization of the transaction is done by fingerprint recognition software on your
mobile device, and a few security questions, which will help prevent someone from
stealing your banking or personal information if your device was lost or stolen. Why
would using your mobile device make transaction easier? By having your credit or debit
card information already stored on your Smartphone, it will save many steps in the
purchasing process on any website you choose to purchase from. Also, at the same time
everyone is very comfortable with their mobile device, and by having the choice to
purchase a product from your smart phone, helps the company finish the sale. Most
customers want to go with the transaction process that has the least amount of steps, and
by having your banking information programmed into your SIM card and it only taking a
press on the “Buy Now” button, this takes away many of the steps that customers have to
go through now to purchase something online. Future direction of research could be to
formulate a system with similar features that supports person to person settlement as well.
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