A STUDY ON CUSTOMER PAYMENT

PREFERENCES.
Presented by
Tanya Das
Preet Jain
Asma Gite
Anish Sajnani
Harshita Gupta
Introduction
Payment preferences vary widely among individuals and are
influenced by a variety of factors, such as age, gender, income
level, and lifestyle. In recent years, there has been a growing trend
towards digital payments, such as UPI and credit cards. This is due
to the convenience and security of these payment methods.
This study aims to investigate the payment preferences of
customers of a particular age group. The specific objectives
of the study are to:

● Determine whether there is a difference in the average transaction

amount of UPI payments and cash payments made by customers
of certain age group.
● Test whether the gender of a customer is associated with the type
of payment they prefer, UPI or cash, for a certain age group.
RESEARCH METHODOLOGY
The study will be conducted using a survey of bank customers in
Navi Mumbai. The survey will collect information on the
customer's age, gender and preferred payment method. The data
collected from the survey will be analyzed using descriptive
statistics & statistical methods, such as t-tests and chi-square tests.
 Tests to meet the objective:
● T-test: A bank wants to determine whether there is a
difference in the average transaction amount of UPI
payments and cash payments made by customers of a
particular age group.
● Chi-square test: A bank wants to test whether the gender of
a customer
The results iswill
of the study associated withinsights
provide valuable the type of payment
into the payment they of
preferences
customers of certain age group. This information can be used by the banks to improve
prefer, UPI or
its payment cash,and
offerings forbetter
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meet the needs its customers.
Hypothesis
T-Test :
Null hypothesis: H0: There is no
difference in the average transaction
amount of UPI payments and cash
payments made by customers of this age
group.
Alternative hypothesis: Ha: There is a
difference in the average transaction
amount of UPI payments and cash
payments made by customers of this age
group.
Chi square Test :
Null hypothesis: H0:The gender of a
customer is not associated with the type
of payment they prefer, UPI or cash, for
this age group.
Alternative hypothesis: Ha: The gender
of a customer is associated with the type
of payment they prefer, UPI or cash, for
this age group.
Data Collection & Pre-processing
Data Collection - Questionnaire
No. of Respondents -
Data Pre-processing: This is the process of cleaning and preparing the data for analysis.
● Data cleaning
● Data transformation
● Data reduction
● Tabulation of raw data
● Sorting
 Q1 ) Is there a difference in the average transaction amount of UPI payments and cash payments made by
customers of this age group?

1. Data Preparation:
Group 1: Customers who use UPI payments in 18- 35 age group.
Group 2: Customers who use cash payments in the 18- 35 age group.
2. Hypotheses:
Null Hypothesis (H0): There is no significant difference in the average
transaction amount between UPI payments and cash payments.
Alternative Hypothesis (H1): There is a significant difference in the average
transaction amount between UPI payments and cash payments.
3. Set Significance Level: Choose a significance level (alpha) for your test.
Common values are 0.05 or 0.01.
4. Perform the t-test:
Calculate the mean (average) transaction amount for each group.
Calculate the standard deviation for each group.
Use a t-test calculator or software (like Python's scipy library or Microsoft Excel)
to perform the t-test.
5. Interpret the Results:
If the p-value obtained from the t-test is less than your chosen significance level
(alpha), then you can reject the null hypothesis.
If the p-value is greater than alpha, you fail to reject the null hypothesis.
ANSWER FOR Q1)

Main output -

Additional output -
Based on the t-test analysis and if the p-value is less than your chosen significance level (alpha), and
you reject the null hypothesis, this implies that there is a significant difference between the two groups.
In this case, since UPI payments and cash payments are the two groups being compared, one can
conclude that UPI payments have a higher average transaction amount than cash payments.
Q2) Is there an association between the gender of a customer and the type of payment they prefer, UPI or cash, for this age group?

1. Hypotheses:
Null Hypothesis (H0): Gender and Payment Preference are independent
(no association).
Alternative Hypothesis (H1): Gender and Payment Preference are
dependent (there is an association).
2. Set Significance Level: Specified alpha as 0.05.
3. Perform the Chi-squared Test:
Calculate the expected frequencies for each cell in the contingency table
under the assumption of independence.
Calculate the Chi-squared statistic based on the observed and expected
frequencies.
Use a Chi-squared distribution table or a statistical calculator to find the
p-value associated with the Chi-squared statistic.
4. Interpret the Results:
If the p-value is less than or equal to α (p ≤ α), you can reject the null
hypothesis (H0). This means that there is evidence of an association
between gender and payment preference in this age group.
If the p-value is greater than α (p > α), you fail to reject the null
hypothesis (H0). In this case, you do not have enough evidence to
conclude that there is an association between gender and payment
preference in this age group.
ANSWER FOR Q2)

Main output -

Additional output - Based on the Chi-squared test analysis of the provided data, which includes counts
of male and female customers preferring UPI or cash payments, there is no statistically significant
difference in preference for UPI payments or cash payments between male and female customers in this
age group. In other words, the analysis does not provide evidence to support a difference in payment
preference based on gender.

i.e There is no difference in the preference for UPI payments or cash payments between male and female
customers.
 Q3) What are the factors that influence the choice of payment method for customers of this age group?

1. Age Categories: 3. Security:

Age_25-35: 0.19: This suggests that individuals in the age group 25-35 ecurity_Security: 0.16: The choice of payment method based on
have a relatively higher impact on predicting the choice of payment security has a moderate influence, as indicated by the feature
method compared to other age groups.
importance score.
Age_35-45: 0.15: The age group 35-45 also has some influence, but it is
4. Cost:
slightly less significant than the 25-35 age group.
Cost_Rs.500-Rs.1000: 0.20: The cost factor, specifically in the
Age_45-55: 0.18: Similarly, individuals in the age group 45-55 have a
moderate influence on payment method choice. range of Rs.500-Rs.1000, has the highest feature importance score.
This suggests that cost considerations in this range play a
Age_65+: 0.00: The feature importance of 0.00 for the age group 65+ significant role in predicting the choice of payment method.
indicates that this age group has no influence on predicting payment
method choice in the given dataset.

2. Convenience:

Convenience_Weekly: 0.13: This factor represents the choice of

payment based on weekly convenience. It has some influence, but it is not
the most significant factor.
ANSWER FOR Q3)

Main output -

Additional output -
Overall, based on these feature importances, one can conclude that age, particularly the age group
25-35, along with the cost factor in the range of Rs.500-Rs.1000, have the most significant
influence on predicting the choice of payment method in this dataset. Convenience, security, and
other age groups have varying degrees of influence.
· Q4)What are the trends in payment preferences for customers of this age group? (CASE STUDY)

Demographic characteristic of the sample

PIE CHART
PIE CHART
 References
https://bookdown.org/mpfoley1973
/statistics/case-study-chi-square-fis
her.html
https://www.science.gov/topicpages
/t/t-test+chi-square+test
https://www.pnrjournal.com/index.php/
home/article/view/8214/11046
https://ieeexplore.ieee.org/document/96
55835
https://www.journalppw.com/index.php
/jpsp/article/view/5063/3293
https://www.scirp.org/journal/paperinfo
rmation.aspx?paperid=97053
Future Work
● Expand the study to include a wider range of customers.This could include
customers of different age groups, genders, income levels, and occupations.This
would allow us to get a better understanding of the factors that influence payment
preferences across different demographics.
● Collect data over a longer period of time. This would allow us to track changes in
payment preferences over time.This could be useful for understanding how
payment preferences are evolving in response to changes in technology and the
economy.
● Use more sophisticated statistical methods. This could help us to identify more
subtle patterns in the data. For example, we could use ML techniques to identify
factors that are associated with different payment preferences.
● Develop a predictive model. This could be used to predict the payment preferences
of future customers. This could be helpful for the bank to target its marketing
efforts and improve its customer service.
Acknowledgement
We would like to express our sincere gratitude to the participants
who took the time to fill out our survey. Your feedback was
invaluable to us and helped us achieve our inferences through this
research.
We would also like to thank our mentor, Prof. Sagar Sankeshwari,
for his guidance and support throughout this project. His expertise
and insights were essential for our projects satisfactory results.
THANK YOU !