CHAPTER – I

INTRODUCTION

1
INTRODUCTION:
BACKGROUND OF THE STUDY

The payment and settlement systems are the core elements of financial structure in a nation as
well as on the international level. The evolving technology on financial transactions has availed
methods of payment that have improved efficiency and effectiveness in place of cash to facilitate
trade. In early days there existed different forms of payment with the most ancient one being
barter trade. The challenges that were involved in barter trade necessitated introduction of
various forms of money. The emergency of potentially superior substitute for cash or monetary
exchange that is cashless payment system is expected to aid effective operations in different
sectors of the nation’s economy if it is properly implemented.

Humphrey (2004) notes that since the end of 1980s, the use of cash for purchasing consumption
goods in the US declined. Less Developed Countries (LDCs) are on the transition from a pure
cash economy system to a cashless economy system for the purpose of development. Kenya is
ranked second in Africa among countries that have significantly adopted cashless payments
system, according to the results of a new global survey (Kariuki, 2013). The report released
showed that 27% of Kenyans had fully adopted the cashless system for settling bills, buying
goods and paying for various services with the number rising sharply due to reliable mobile
phone cash transactions.

CASSLESS PAYMENT SYSTEM:

In a cashless society, consumers can make retail transactions payments over the Internet,
payment at „unmanned‟ vending machine, „manned‟ point of sale (POS) using mobile phone
device, personal digital assistant (PDA), smart cards and other electronic payment systems,
including debit and credit cards. Globally businesses are embracing the innovation that comes
with it, and are transforming their business models in alignment with this reality. Locally, banks
are investing in transformation into digital businesses. An example is the use of social banking in
RBI which makes it very convenient for their customers to view their account balance, perform
money transfers, and open accounts, all on Face book.

2
The government and the commercial entities provide strong encouragement and support for
cashless transactions. Although there are benefits such as cost saving and efficient use of
resources, social commentators and environmental activists have expressed concerns that it
would increase overall consumption, increase personal debtlevels, reduce savings and that the
resultant „over-consumption‟ will have an adverse impact on the society and environment.

Indians are now using mobile phone money transfer services to pay for utility bills, mainly
electricity and water, purchase goods in supermarkets, and pay for bus tickets, insurance
premiums and loans. According to the World Bank, penetration of the mobile phone in India has
increased from 3 per cent in 2016 to more than 48 per cent today, and is expected to reach 72 per
cent by the end of 2025.

There are different cashless payment methods for example, payment card which is accepted by a
merchant to make a payment for a purchase or in payment of some other obligation. The use of a
wide variety of cards available including credit, debit and the prepaid cards has given people the
power to purchase items in stores, on the Internet, through mail-order catalogues and over the
telephone. Cards are both beneficial to the merchants and their customers. They save merchant‟s
time and money, enable them to attract and retain more customers, and help them grow their
businesses.

3
OBJECTIVE OF THE STUDY:
 To study the growth of e- wallet during demontization
 To examine the limitations of cashless transactions
 To analyze the need and impact of cashless transaction in retail sector
 To evaluate the investment flow in cashless as low as possible without hampering either
flow of the production or deliveries of finished goods
 To understand and know about the history of the cashless transaction

4
SCOPE OF THE STUDY

 From the analysis it can be concluded that cashless payment system is gradually gaining
popularity with security, technology and competition being major drivers. There are
numerous challenges facing use of cashless payment systems however, fraud being the
biggest. Of all the cashless payment systems, mobile payments lead the way.

 An analysis on how the variables under study were related to the use of cashless payment
system and to each other revealed that the use of cashless payment system was highly
related to technology followed by security and competition respectively.

2
 The coefficient of determination (R ) equals 0.6706 shows that security, competition and
technology explain 67.06 percent of the variations in the use of cashless payment system
leaving only 32.94 percent unexplained.

 The F value of 30.5555 indicates that the overall regression model is significant hence it
has some explanatory value (P-value P=0.00<0.05).This indicates that the predictor
variables have a significant effect on the output variable. This indicates that there is a
significant relationship between the predictor variables (Technology, security and
Competition) and response variable (use of cashless payment system)

5
NEED OF THE STUDY

 The aim of the study is to provide adequate information to the stake holders in different
sectors of the economy to aid in smooth implementation and operation of cashless
systems. This study will therefore uncover the challenges in implementation and
operation of the cashless payment system.

 The government will benefit from the findings of this study by learning the benefits and
challenges it is likely to face during the implementation and operation of the cashless
payment system. This is timely especially with the new regulations to operate a cashless
public transport fare system. It will therefore take a proactive step to ensure efficient and
effective evolution to a cashless economy.

 The finding of this study will be invaluable to users, potential and current. It will
enlighten them on the convenience and the cost efficient ways to operate cashless
systems. Further they will benefit by learning the pitfalls to avoid while embracing
cashless payments

 The providers of cashless payment systems i.e. the Mobile subscribers, Banks and others
will gain knowledge on how to package their products based on areas of improvement
highlighted to encourage uptake. Issues especially related to fraud will be invaluable. The
will also learn the attractiveness of the market in order to make a decision on the extent to
which they can penetrate the market.

 Academicians and scholars will find this research invaluable. The study will help them
advance their knowledge on cashless payment systems. Further, they might be interested
in recommendations for further research on this subject

6
RESEARCH METHODOLOGY:
Research Design

My research methodology requires gathering relevant data from the specified documents and
compling database in order to analyze the material and arrive at a more complete understanding i
hope to shed light on the question through my research

DATA COLLECTION:
Primary data:
 Consumer survey on cashless India
Secondary data:
 Study reports from internal
 Articles in newspaper and internet
Data collection tools:
 Questionnaire survey
 Internet
 Newspaper
Types of research:
 Explanatory research
 Descriptive research

7
8
LIMITATIONS OF THE STUDY:

 At an individual level, cash is inconvenient to carry and manage. It cannot be

tracked or insured, as cash once lost or stolen cannot be recovered.
 Cash is expensive to print, inspect, move, store and guard.
 Counterfeiting is always going to be a problem as long as paper currency
exists.
 Criminals favour hand-to-hand currency, as it does not leave a paper trail.
 Cash transactions are not tractable in nature, thus providing no transparency.
 This leads to corrupt practices and financial crimes such as excessive money
laundering.
 Monitoring of tax compliance is difficult for the Government.
 High cash usage results in a substantial amount of money outside the formal economy,
thus stunting the effectiveness of policies aimed at managing
inflation rates.
 From a global perspective, the economic growth imperative inherent in the
current monetary system plays a major role in global warming and other
environmental crises.
 In the wake of the issues highlighted above, some governments are already viewing

9
 CHAPTER – 2

REVIEW OF LITERATURE

10
REVIEW LITERATURE

This chapter reviews various studies and literature on cashless payment systems to try and

establish the determinants of its use in different sectors of the economy. Analysis will be done

from other studies which relate to different payment systems. Evolution of the payment systems

and the factors that have necessitated different modes of payment will also be discussed.

Money is the most important commodity in a market economy. A sum of money is at least one
side of every market transaction. Therefore, anything that affects the value of money affects
every market transaction. The value of money affects not only the transactions of the moment but
also all transactions over periods of time. Below are innovations theories discussed to explain
technology acceptance.

Empirical literature review

More and more researches are being carried out on determinants of use of the cashless payment
systems.

Boeschoten (1998) carried out a research with the aim of finding out the factors that were
considered in choosing and using payment instruments. He used a new and unique set of micro
data that contained both transaction information and survey data on payment behavior of German
individuals, the results indicated that cash usage was compatible with rational decision making.
Consumers decide upon the adoption of payment cards and then use available payment means
according to their transaction and personal characteristics, the relative costs of cash and card
usage and preferences. He concluded that the transaction size is one of the most important
explanatory variables in choosing a payment instrument. Transaction size is one of the factors
that will be studied in this research.

Kaburia (2004) carried out a study of E-payment systems and alternatives for developing
countries. The main purpose of this research project was to examine the e-payment alternatives
that exist in Kenya and the world, and the extent of use of e-commerce and e-payment methods
in Kenya. Three samples; one of individuals, another one comprising organizations and another
sample of commercial banks and PSPs (payment Service Providers) were studied. The research
found out that indeed the lack of suitable e-payment alternatives among other factors was a

11
critical challenge to the growth of e- commerce in Kenya. Availability and ease of use of various
cashless payment modes powered by advanced technology will be studied in this paper.

Magutu (2009) did the study titled Modeling the Effects of E-Commerce Adoption on Business
Process Management. The general objective of this study was to model the effects of e-
commerce adoption on business process management. This was a census study on modeling the
effects of e- commerce adoption on business process management of commercial banks in
Kenya. Out of the sixty (60) respondents to whom the questionnaires were administered, only
forty- one (41) responded. This gave a response rate of 68.33% percent. It was found that the
commercial banks in Kenya have formalized policy on E-Commerce and internal business
process management. Also to a great extent the banks have focused their e-business activities on
collaborating with business partners using ICT; provision of other on-line and e-services,
including e-marketing and advertising; supply chain management using intranet; and on-line
buying (internet). The major effects of e-commerce on banks business process management are it
has improved the image of the bank; besides profit making the bank have been actively engaging
themselves for the good of the effective business process management. This study brings out
business image as one of the factors encouraging the adoption of the cashless pay system.

Newstead (2012) in his study he explored the relationship between e-payment system and
economic growth as a means of reviewing current transition to cashless economy in Nigeria.
Data was analyzed using Ordinary Least Square and Two Stage Least Square methods covering
period of 7years (2005-2012). The result indicates a significant positive relationship between e-
payment system and economic growth in terms of real

Similarly, World Payments Reports (2012) explored the state and evolution of global non-cash
payments. The purpose of this study was to find out the reasons for adopting the cashless
payment system among businesses in the developed economies. The study used purposeful
sampling to pick different businesses in developed economies that had adopted the cashless
payment system and found that non-cash payments made it easier and quicker for people and
businesses to buy goods and services, pumping money into the system faster.

12
Kumari D (2016), Her article shed light upon fundamental idea of cashless transactions &safety
concerns. She claims as significance barrier to cashless transactions is inadequate infrastructure.
According to a UNESCO report, one of the main obstacles to cashless transactions is illiteracy.
According to the economic climate, one of the problems with cashless transactions is hacking.

Borhan Omar Ahmed AI-Dalaien (2017) a cashless society is a system in which goods and
services are bought and paid for electronically rather than with physical currency. Numerous
benefits stem from a cashless economy, including increased sales, streamlined transactions,
instantaneous settlement, ease of use, less risk, more transparency, and cheaper overhead costs.
While there are numerous benefits, India’s cashless policy has number of obstacles including a
dearth of ATMs. A lack of internet access, a shortage of internet-capable of devices, few banks
in rural areas is expensive swipe machines. The result showed as there are no notable advantages
of cashless economy for the general populace.

Gupta, (2017), The purpose of this report was to investigate the successes and difficulties
encountered by the government in its pursuit of cashless transactions. She explains that the
Central Government of India has introduced fortunate grahak yojana & Digi Dhan Vyapar
Yojana to incentivize the use of digital payment methods among the country's population.
Between January 20 and 27, state of Haryana will have a "cashelss week" to encourage use of
Journal of Pharmaceutical Negative Results ¦ Volume 13 ¦ Special Issue 10 ¦ 2022 3487 cashless
methods of payment. The government also plans to have college employees and students help

spread word about the aim.

13
 CHAPTER– 3

COMPANY PROFILE

AND

INDUSTRY PROFILE

14
COMPANY PROFILE:

The Housing Development Finance Corporation Limited or HDFC Ltd was among the first
financial institutions in India to receive an “in principle” approval from the Reserve Bank of
India (RBI) to set up a bank in the private sector. This was done as part of RBI’s policy for
liberalisation of the Indian banking industry in 1994.

VISION STATEMENT

"Become the undisputed market leader in providing housing related and general financial needs,
to realize the dream of all"

MISSION STATEMENT

 To our shareholders, our mission is to optimize returns.

 To our customers, our mission is to provide a caring service by anticipating their
requirements and innovatively satisfying them beyond their expectations.
 To our staff, our mission is to identify their multi-faceted talents, develop, motivate,
recognize and reward them towards fulfillment of the institutional and national housing
vision. 
 To the national economy and the industry regulator, we are the key driver and thought
leader, shaping and financing the national housing policy. 
 To our natural environment, we enforce sustainable practices across all our activities

15
ACHIEVEMENTS:

 HDFC Bank merged with TIMES BANK in 2000

 HDFC Bank merged with CENTURION BANKOF PUNJAB in 2007
 HDFC Bank wins Asian bank best retail bank in India 2008 for outstanding performance
 HDFC Bank chosen as one of the Asia pacific best 50 companies by Forbes magazine
 Best bank in private sector in 2008
 HDFC Bank ties up the Qatar national bank
 HDFC follows the model of a sound corporate governance
 The bank was amongst the first 4 companies which subjected itself to a corporate
governance and value creation rating by crisil
 A very sound and risk effective management system in place to create less risk asset
portfolio
 Uses neural technologies for risk management its credit card and other retail assets
portfolio
 Ranked 1st in 2019 brands top 75 most valuable Indian brands hdfc bank featured for the
consecutive year
 Among the most honored company list institutional investor all Asia(ex- japan) executive
team 2019 survey
 India best bank euro money awards for excellence2019
 Bank of the year and best large bank, business today-money today financial awards 2019
 Best bank in India 2019 by global magazine finance Asia
 Best large bank and fastest growing large bank in 2019 by business world magna awards
2016
 Best banking performer India in 2016 by global brands magazine awards
 Brands ranking most valuable brand in India for 3rd successive year
 KPMG study of India’s best bank of the year & best digital banking initiative award
2016

16
INDUSTRIAL PROFILE:

(THE HOUSING DEVELOPMENT FINANCE CORPORATION) was amongst the first to

receive an "in-principle" approval from the reserve bank of India (RBI) to set up a bank in the
private sector, as part of RBI liberalization of Indian banking industry in 1994. The bank was in
corporate in Aug. 1994 in the name of HDFC Bank Ltd. With its registered office in Mumbai,
India, HDFC Bank commenced operations as scheduled commercial bank in January 1995e

PROMOTOR

HDFC is India's premier housing finance company and enjoys an impeccable track record in
India as well as in international markets. Since its inception in 1997, the corporation has
maintained a consistent and healthy growth in its operations to remain a market leader in
mortgage. Its outstanding loan portfolio covers well over a million dwelling units. HDFC has
developed significant expertise in retail mortgage loans to different market segments and also
has a large corporate client base for its housing related credit facilities. With its experience in
the financial markets, a strong franchise, HDFC was ideally positioned to promote a bank in the
Indian environment.

BUSINESS FOCUS

HDFC bank's mission is to be a world class Indian bank. The bank has aim to build sound
customer franchises across district business so as to be the prefer provider of banking services
in the segment that the bank operates in and to achieve healthy growth in profitability,
consistent with the bank's risk appetite. The bank is committed to maintain the highest level of
ethical standards, professional integrity and regulatory compliance. HDFC bank's business
philosophy is based on four core values:

1 Operational Excellence

2. Customer Focus

3. Product leadership

4. People

17
CAPITAL STRUCTURE

The authorized capital of HDFC bank is Rs. 45000 Lakhs. The issued, subscribed and paid-up
capital is divided into 836,46 lacks equity shares @ Rs.10/- each.

TIMES BANKS AMALGAMATION

In a mile stone transaction in Indian banking industry, Times bank limited (another new private
sector bank promoted by Bennett, Coleman & Co. times group) was merged with HDFC bank
ltd., effective February 26, 2000. As per the scheme of amalgamation approved by the share
holders of both banks and Reserve bank of India.

DISTRIBUTION NETWORK

HDFC bank has its Head quarters in Mumbai. The bank at present has an enviable network of
535branches spread over 312 cities across the country. All branches are linked on an online real
time basis. Customer in 189 locations are also serviced through phone banking. The banks
expansion plans take into account the need to have a presence in all major industrial and
commercial centers where its corporate customers are located as well as the need to build a
strong retail customer base for both deposits and loans products. Being a clearing settlement
bank to various leading stock exchanges, the bank has branches in centers where the NSE/BSE
have a strong and active member base.

The bank also has a network of 1323ATM's across three cities.

TECHNOLOGY

HDFC bank operates in a highly automated environment in terms of information technology

and communication systems. All the branches have connectivity which enables the bank to
offer speedy funds transfer facility to its customers. Multi branch access is also provided to
retail customers through the branch network and automated teller machines (ATMs)

The bank has made substantial efforts and investments in acquiring the best technology
available internationally to build the infrastructure for a world class bank has prioritized its
engagement in technology and the internet as one of its key goals and has already made
significant progress in web enabling its core business. In each office its business, the Bank has

18
succeeded in leveraging its market position, expertise and technology to create a competitive
advantage and build market share.

Traditional banking activities

Banks act as payment agents by conducting checking or current accounts for customers, paying
cheques drawn by customers on the bank, and collecting cheques deposited to customers'
current accounts. Banks also enable customer payments via other payment methods such as
telegraphic transfer, EFTPOS, and ATM.
Banks borrow money by accepting funds deposited on current accounts, by accepting term
deposits, and by issuing debt securities such as banknotes and bonds. Banks lend money by
making advances to customers on current accounts, by making installment loans, and by
investing in marketable debt securities and other forms of money lending.
Banks provide almost all payment services, and a bank account is considered indispensable by
most businesses, individuals and governments. Non-banks that provide payment services such
as remittance companies are not normally considered an adequate substitute for having a bank
account.
Banks borrow most funds from households and non-financial businesses, and lend most funds to
households and non-financial businesses, but non-bank lenders provide a significant and in
many cases adequate substitute for bank loans, and money market funds, cash management
trusts and other non-bank financial institutions in many cases provide an adequate substitute to
banks for lending savings to.

19
 CHAPTER – 4

DATA ANALYSIS

&

INTERPRETATION

20
DATA ANALYSIS:
This chapter presents analysis and findings of the study on merchants in Hyderabad and the
effects of technology, security concerns and competition in the adoption of the cashless payment
system. The questionnaires were directed to top management level because they are most likely
to make final decisions about adoption of the payment systems. The objective of this study was
to establish the effects of technology, security concerns and competition in adoption cashless
payment system by merchants in Hyderabad.

The researcher administered through the help of research assistants three hundred and seventy
nine (379) questionnaires to various merchants in Hyderabad. Two hundred and eight (208)
responded within the two week duration they were given to respond. This translates to 54.88 %
response rate.

Once the data was collected, it was checked for completeness and consistency. The data was
analyzed by use of descriptive statistics and inferential statistics. This included a list of tables
and percentages to represent the response rate and information on the variables that the study
considered .Cross tabulation was used to determine the relationship between various variables
and the use of cashless payment system. The findings of the study are presented in three parts.
The first part presents the cross tabulation based on different variables under consideration .The
analysis was as per the questionnaires that were used to collect data. Data was categorized in
terms of factors affecting use of cashless payment system. The second part presents findings
using correlation analysis while the third presents data based on regression analysis.

21
Table 4.1: General Information

No. Question Parameters Frequency %

Do you have a cashless system of

1 payments? Yes 79 37.80%

No 129 62.20%

2 Gender Male 121 58%

Female 87 42%

3 Respondent’s age bracket Under 35 years 123 59%

Over 35 years 85 41%

4 Number of your staff workers Below 5 Workers 73 35%

5 – 10 Workers 60 28.70%

10 – 15 Workers 42 20.11%

Above 15workers 34 16.19%

5 Duration of business existence Under 1 Year 51 24.32%

1 – 2 years 58 28%

2-5 years 38 18.45%

5-9 years 31 15%

22
 Over 10 years 30 14.23%

6 Total revenue base per year (Rs.) Less than 1,000,000 49 23.51%

1,000,000-5,000,000 58 28.11%

5,000,000 -

15,000,000 46 21.98%

10, 0000 –

15,000,000 39 18.87%

Over 15,000,000 16 7.53%

7 What does the business deal in? Goods 109 52.59%

Services 99 47.41%

8 Highest level of education Primary education 55 26.37%

Secondary education 82 39.49%

College education 39 18.20%

23
 University education 32 15.24%
Whose cashless transactions are
11 more? Male Customers 45 56.73%
Female Customers 34 43.27%

Volume of cashless transactions per

12 day 0-50 26 33.43%
50-100 29 36.91%
100-150 15 19.22%
Over 150 9 10.44%

Average value of a single cashless

13 transaction in Ksh. 1-100 20 25.53%
100-500 24 29.79%
500-1000 17 21.19%
1000-2500 8 10.29%
2500-5000 7 8.99%
Over 5000 3 4.21%
Source: Research data (2017-18)

From the analysis in Table 4.1 the study revealed that 37.8 % of merchants were using
cashless payment system. 58% of the respondents were male while 59% were below the age of
35 years.35% of the merchants had less than five workers, 28.7% had 5-10workers, 20.11%
had 10-15 workers while 16.19% had more than 15 workers. The results of the study revealed
24.32% of the businesses were under one year old, 28% were between 1-2 years old , 18.5%
were 2-5 years old,15% were 5-9 years old while 14.23% were over 10 years old.

24
 N
o. Factor Mean Standard Deviation

1. Security concerns 4.54 1.38

2. Size of transactions 4.35 1.38

3. Conspiracy between staff and customers to steal 2.97 0.72

4. Nature of goods and services 2.58 0.57

5. Government regulations 1.95 0.44

Source: Research data (2017-18)

From the analysis of security issues affecting the adoption of cashless payment systems in
Table 4.2, there are five factors that affect the use of cashless payment systems. Security
concerns affected the use of cashless payment system to a great extent with a mean>=4.5 and a
significant standard deviation. Government regulation did not have significant effect to the use
of cashless payment system with a mean >=1.9.

Table 4.3: Technology issues affecting the adoption of cashless payment systems

No. Factor Mean Standard Deviation

1. Technological advancement 4.67 1.47

2. Global acceptance 4.62 1.40

3. Volume of transactions 4.31 1.35

4. Ease of record keeping and tracking 3.98 1.27

5. Challenges regarding coins availability 3.57 1.02

6. Ease of use 3.00 0.77

7. General economic growth 2.66 0.61

25
 8. Online trading 2.5 0.59

Source: Research data (2017-18)

From the analysis of technology issues affecting the adoption of cashless payment systems in
Table 4.3, there are eight factors that affect the use of cashless payment systems. Technological
advancement affected the use of cashless payment system to a great extent with a mean>=4.5
and a significant standard deviation. Online trading did not have significant effect to the use of
cashless payment system with a mean >=2.5.

Table 4.4: Competition issues affecting the adoption of cashless payment systems

No. Factor Mean Standard Deviation

1. Cash handling expenses 4.19 1.31

2. Suppliers requirements 3.64 1.25

3. Influence from service providers 3.49 0.94

4. Customer demands 3.33 0.91

5. Competitors 3.12 0.83

6. Strategy to expand market 2.81 0.68

7. Image of the business 2.19 0.50

Source: Research data (2017-18)

From the analysis of competition issues affecting the adoption of cashless payment systems in
Table 4.4, there are seven factors that affect the use of cashless payment systems. Cash
handling expenses affected the use of cashless payment system to a great extent with a
26
mean>=4.0 and a significant standard deviation. Image of the business did not have significant
effect to the use of cashless payment system with a mean >=2.0.
Table 4.5: Correlation Matrix of variables affecting use of cashless payment system

CS T S C

CS 1.000

T .753 1.000

S .601 .450 1.000

C .512 .576 .124 1.000

Source: Research data (2017-18)

2
The coefficient of determination (R ) equals 0.6706. This shows that security, competition and
technology explain 67.06 percent of the variations in the use of cashless payment system
leaving only 32.94 percent unexplained. The P-value of 0.000 implies that use of cashless
payment system is significant at 5percent level of significance.

27
 CHAPTER – 5
FINDINGS
SUGGESTIONS
BIBLIOGRAPHY

28
FINDINGS
 In a nut shell, the study revealed that 37.8 % of merchants were using cashless payment
system. 58% of the respondents were male while 59% were below the age of 35
years.35% of the merchants had less than five workers, 28.7% had 5-10workers, 20.11%
had 10-15 workers while 16.19% had more than 15 workers. The results of the study
revealed 24.32% of the businesses were under one year old, 28% were between 1-2 years
old, 18.5% were 2-5 years old, 15% were 5-9 years old while 14.23% were over 10 years
old. This indicates that the use of cashless payment systems is most popular with the
youths and new businesses.

 The results of the study revealed that 23.51% of the merchants‟ annual revenue base was
less than Rs. I million, 28.11% between 1-5 million , 21.98% between 5-15 million ,
18.87% between 10-15 million and 7.53% over Rs.15 Million .52.59% of the merchants
were dealing with goods while the rest 47.41% were dealing in services. It is evident
from the results of the study that 26.37% of the merchants had primary education, 39.49
% had secondary education, and 18.90% had college education while 15.24%
haduniversity education. Level of education, nature of products and the revenue base
could not be out rightly linked to the use of cashless payment systems.

 The results of the study further indicated that 56.73% of female customers outnumbered
the 43.27% of male customers who preferred using cashless payment systems. Further,
the results indicated that 33.43% of merchants had 0-50 cashless transactions per day,
36.91% had 50-100 transactions per day, 19.22% had 100-150 transactions per day while
10.44 had over 150 transactions per day.

29
SUGGESTIONS :

The factors affecting the use of cashless payment systems are wide-ranging. Thus it is impossible
to exhaustively study the subject in a single report. The scope of this study only covers the three
factors. Given enough time and resources it is possible to attempt to study more factors in all
counties in Hyderabad. Various studies using different statistical methods would yield better
results.

Further studies can assess whether there is a connection between the use of cashless payment
systems in an economy to the level of economic growth. If so, a breakdown to the extent of
connection in various sectors of the economy should be determined to allow informed policies.

In addition studies could be carried out to assess how the use of cashless payment system affects
the efficiency of different departments of the government. The study focuses on technology
security and competition as the only factors affecting the use of cashless payment systems. A
study could be carried out to find out what other factors affect the use of cashless payment
systems and to what extent they affect.

30
CONCLUSION:

 Regarding the value of transactions, the results of the study revealed that 25.53% of the
value of a single cashless transaction in Rs. were between 1-100, 29.79% were between
100-500, 21.19% were between 500-1000, 10.29% were between 1000-2500 , 8.99%
were between 2500-5000 while 4.21 % were over 5000. Low value transactions were the
majority with most users being male.

 From the analysis it can be concluded that cashless payment system is gradually gaining
popularity with security, technology and competition being major drivers. There are
numerous challenges facing use of cashless payment systems however, fraud being the
biggest. Of all the cashless payment systems, mobile payments lead the way.

 An analysis on how the variables under study were related to the use of cashless payment
system and to each other revealed that the use of cashless payment system was highly
related to technology followed by security and competition respectively.

2
 The coefficient of determination (R ) equals 0.6706 shows that security, competition and
technology explain 67.06 percent of the variations in the use of cashless payment system
leaving only 32.94 percent unexplained.

 The F value of 30.5555 indicates that the overall regression model is significant hence it
has some explanatory value (P-value P=0.00<0.05).This indicates that the predictor
variables have a significant effect on the output variable. This indicates that there is a
significant relationship between the predictor variables (Technology, security and
Competition) and response variable (use of cashless payment system).

31
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WEBSITES

 www.hdfc.com
 www.rbi.co.in

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35
Appendix I: Research Questionnaire

PART A: GENERAL INFORMATION

1. Name of entity

2. What is your designation at the organization?

3. Do you have a cashless system of payments?

Yes ( ) No ( )

4. Gender: Male ( ) Female ( )

5. What is your age bracket? (Tick as applicable)

a) Under 35 years ( )

b) Over 35 years ( )

6. What is the number of your staff workers?

a) Less than 5 Workers

b) 5 – 10 Workers

36
 c) 10 – 15 Workers

d) More than 15workers

7. For how long has your organization been in existence?

a) Under 1 Year ( )

B) 1 – 2 years ( )

b) 2-5 years ( )

c) 5-9 years

d) Over 10 years ( )

8. What is your total revenue base per year?

a) Less than 1,000,000 ( )

b) Between 1,000, 000 – 5,000,000 ( )

c) Between 5,000,000 and 15,000,000 ( )

d) Between 10, 0000 – 15,000,000 ( )

e) Over 15,000,000 ( )

9. What does the business deal in?

a) Goods ( ) b) Services ( )

37
10. What is your highest level of education? Kindly tick your choice

Primary education □

Secondary education □

College education □

University education □

11. Whose cashless transactions are more?

Male Customers □ Female Customers □

12. What is the volume of cashless transactions per day?

0-50 □

50-100 □

100-150 □

Over 150 □

38
13. What is the average value of a single cashless transaction in Rs.

1-100 □

100-500 □

500-1000 □

1000-2500 □

2500-5000 □

Over 5000 □

39
40