Profuse Facets of Payment Banks and its compelling Impact on Consumers

Ms. Monika Rubin.S1, Ms. Sitha Rubini.S2, and Ms. Sivapriya.K3

1
(Student, II M. Com, Department of commerce finance, Sri Krishna Arts and Science College)

2
(Student, II M. Com, Department of commerce finance, Sri Krishna Arts and Science College)

3
(Student, II M. Com, Department of commerce finance, Sri Krishna Arts and Science College)

Abstract

Indian banking sector tremendously moving towards Digitalization to fulfill the objective of financial inclusion.
Payment banks have been introduced with the primary objective of increasing the financial inclusion drive.
Even though RBI has taken many initiatives to reach all the sectors of people, there is necessity to study whether
the people are aware about the payment banks and its facilities. Nowadays the customer’s uses many mobile
wallet services and they have been receiving many negative feedbacks in terms of payment gateway failure,
problem with acceptance of debit card, failure of apps, delay in confirmation of order, security transactions,
connectivity and services quality. Therefore, this study focuses on the profuse facets of payment banks and its
compelling impact on consumers.

Keywords: customer, financial inclusion, digitalization.

1. Introduction

Payment banks are a part of special category of banks which are authorized to offer a limited range of services
to its customers. Payment banks have been vital to the realization of financial inclusion which promotes
affordable financial services to the low income and disadvantaged groups. Payment banks are a partnership
between banks and telecom companies. Since the rural and remote areas lack the infrastructure for institutional
development of banks and financial systems, payment banks which operate through the medium of mobile
phones are best suited for such situations. These banks are likely to aid disadvantaged to carry out transactions
electronically eliminating the role of middlemen, while at the same time facilitating organized finances
throughout the country. This research aims at identifying the customer awareness level, assessing the factors that
influence the usage of payment banks and analyzing the customer preference towards payment banks.

2. Review of literature:

The collection of reviews has been made up of various studies undertaken by academicians and students that are
found in journals, magazines, publications, working paper books and therefore

Kishore Kumar das and Rupsa Mahapatra (2019) in their article customer perception towards payment bank.
The objective was to know the perception of customer towards payment bank. The present study is based on the
samples of 110 respondent Cuttack city. Their study shows more male members are using cashless system on
payment bank method to settle their commercial transactions over the female users. The suggested that more
users of payment bank are found at medium income were as at the both tail use of payment is less.

Sri Harsha Reddy. K (2018) has presented a report on the announcement of payment bank and stock
performance of the commercial banks in India. The objective is to set up payment banks to migrate labour
workforce, low income, households and appear users. For the 2014 till august 2015. The suggested that market
perceived announcement of payment banks as a competition to existing commercial banks in payment services
and deposit mobilization so the traditional bank adopt new innovation like UPI payment, google pay to attract
the customer.

Sabitha Srinivas (2017) has conducted a study on financial inclusion -Role of payment bank in India, the main
objective of payment bank is to increase the holding of max balance of 1 lakh per customer small savings
accounts and provide payment and remittance service. The evident from study reveals that payment banks pays
vital role in government direct subsidies on healthcare, education and gas are directly to beneficiary account.
They suggest that payment bank further deals with simple financial service activities.

3. Objectives

 To identify the customer awareness level towards payment banks.

 To analyze the customer preference towards payment banks.
 To access the factors that are influencing customer towards payment banks.

4. Research methodology

This study was undertaken to profuse facets of payment banks and its compelling impact on consumers.
The probability samplings method was adopted in this study. The sample size of study was 120
respondents. To research the responses percentage method and garret rating was used.

 Source of knowledge

Primary Data: The study was administered by employing a structured questionnaire for primary data
collection. The questionnaire was prepared in simple manner to precise the views of respondents.

Secondary Data: The secondary data were taken from journals, magazines, websites and newspapers.

5. Analysis and Interpretation

Table No 1: Table Representing the type of payment app used by the respondents

Payment app No of respondents Percentage

Airtel 30 25
India Post 13 11
Paytm 61 50
Fino 1 1
Jio 13 11
NSDL 2 2
Total 120 100

Chart

Chart representing the type of payment app used

by the respondents

2
1 13
30

13

61

Airtel India Post Paytm Fino Jio NSDL

Interpretation:
From Table 1 & Chart 1, we can infer that 50% of the total respondent’s preference towards the usage of
payment App was Paytm, 25% of the respondents prefer Airtel, 11% of the respondents prefer India Post, 11%
of the respondents prefer Jio, 2% of the respondents prefer NSDL, 1% of the respondents prefer Fino.

Table No 2: Representing the services used by the respondents in payment app

Services offered No of respondents percentage

Payment of bills 38 32
Transferring or receiving 60 50
Making deposit 10 8
Others 12 10
Total 120 100

Chart

Chart representing the services used by the

respondents in payment app
12

10
38

60

Payment of bills Transferring or receiving

Making deposit Others

Interpretation:

From table 2 & chart 2 we can infer that 50% of the respondents preferred service used in payment app was
transferring and receiving money, 32% of the respondents’ preferred services used in payment app was bills
payment, 10% of the respondents preferred service used in payment app was other services like mobile recharge
and 8% of the respondents uses payment app for making deposits.

Table No:3 Representing the expectation towards payment bank

Expectation No of respondents Percentage

To provide high interest rate 53 44
To accept NRI deposit 7 6
To provide loan 37 31
To maximize the deposit limit 23 19
Total 120 100
Chart

Chart representing the expectation towards

payment bank

23

53

37

To provide high interest rate To accept NRI deposit

To provide loan To maximize the deposit limit

Interpretation:

From table 3 & chart 3 we can infer that 44% of the respondents are expected to provide high rate of
interest in payment bank, 31% of the respondents are expected to provide loans in payment bank, 19% of
the respondents are expected to maximize the deposit limit in payment bank and 6% of the respondents are
expected to accept NRI deposits in payment bank.

HENRY GARRET RANKING

Step 1: Table showing number of respondents ranks in each factors

Factors 1 2 3 4 5
Transaction process is simple 43 13 13 19 32
Transaction speed is fast 12 41 27 32 8
The quality of the service is good 10 16 56 19 19
Account info are kept confidential 22 28 15 40 15
The bank provides services on time as 31 19 9 17 44
promised

Step 2: Table shows the findings out of garret value

100(Rij-0.5) Nj Calculated value Garret value

100(1-0.5)/5 10 75
100(2-0.5)/5 30 60
100(3-0.5)/5 50 50
100(4-0.5)/5 70 40
100(5-0.5)/5 90 20

Step 3: Table showing the rank of the importance of payment banks by customers

Factors 1st 2nd 3rd 4th 5th total % Rank

 Transaction process 3225 780 650 760 640 6055 50.45 Ⅱ
is simple
Transaction speed is 900 2460 1350 1280 160 6150 51.25 Ⅰ
fast
The quality of the 750 960 2800 760 380 5650 47.08 Ⅴ
service is good
Account info are 1650 1680 750 1600 300 5980 49.83 Ⅲ
kept confidential
The bank provides 2325 1140 850 680 880 5875 48.95 Ⅳ
services on time as
promised

Interpretation:

From table 3 we can infer that, transaction speed is fast was ranked first with 51.25 garret points, transaction
process is simple is ranked as second with 50.45 garret points, account info are kept confidential is ranked third
with 49.83 garret points, the bank provides services on time as promised is ranked fourth with 48.95 garret
points and the quality of the service is good is ranked fifth with 47.08 garret points.

6. Conclusion

India is moving towards cash less economy, which is more feasible and adaptable in relation to the recent
technological and economic trends. Payment banks have been introduced with the primary objective of
increasing the impact of financial inclusion drive. The payment banks play a significant role in implementing
government direct benefit, transfer schemes, where subsidies on health care, education and gas are paid directly
to beneficiaries’ account. From the study it is clearly evident that the customers are highly aware about the
various payment banks available in the current scenario. Further, the study suggests that the sample constantly
use payment bank services such as payment of bills, transferring and receiving amount in their day-to-day life
without any hassles. In addition, the study also tried to identify the expectations of customers towards the
payment banks. Thus, payment banks are becoming a vital and the most popular medium of digital transaction
in the banking platform.

7. References

1. J. Vaishnavi, N. Shruthi,” payment bank- An innovation initiative by RBI”. International journal of

business and management, volume 3, PP.60 to 66(2014).
2. Nidhi chandarana, “payment bank: Need of digital India “, Abhinav publisher, volume 49(11), PP.12 to
16, (2015).
3. Bharti Chhabra, Neha Jain, “FINO pay tech-A path towards financial inclusion “, International journal
of Engineering and management research, Volume 6, PP.241 to 247, (2016).
4. Sabitha Srinivas,” financial inclusion: Role of payment banks in India”, International Journal of
management and social services, Volume 6(1), PP.91 to 96, (2017).
5. Priyamvada Mihra, “Is payments banks a viable business option in India”, Journal of management
research and analysis, volume 5 PP.89 to 94, (2018).
6. Kishore Kumar das and Rupsa Mahapatra, “Customer perception towards payment banks in Cuttack
city”., International journal of management, volume 10(4), PP.1 to 8, (2019).