“Cashless India - How was it helpful during lockdown

situation”
Simran Adhav1 , Ruchi Sawant2, Prof. Thomson Varghese3, 1,2,3 Department of Commerce, Indira College of Commerce and Science,

Wakad, Pune-33, Maharashtra, India

Abstract-
The COVID-19 crisis presents unforeseen challenges to global economies in the immediate, short, and long
term. Even as countries fight this unprecedented challenge, the response has clearly outlined the lack of
resilience at the macro level. The sharp decline in global trade, trimming of personal consumption, difficulties
in accessing credit, liquidity crunch, disrupted income streams, increase in bad debts, lowered cross-border
remittances, and lack of access to finance especially in under-developed and developing countries will have
long term implications for future economic growth. This white paper describes the impact on payment firms
and outlines ways in which the industry can respond to the challenges and ensure the delivery of seamless
payment services. The covid-19 pandemic could move the world more rapidly towards digital payments.
Payment systems have demonstrated that they are dependable and durable, and continue to command a high
level of confidence from the general population. However, closure of businesses and the lockdown have
resulted in lower transaction volumes overall. To aid the recovery and lead the emergence into this new
normal, it is imperative for the digital payments ecosystem to evolve rapidly and help shape the Post- COVID
era. In this paper we describe the various digital payment methods that are used in the pandemic situation and
have compared the Pre- COVID and Post- COVID situations about cashless India.

Key Words
Digital payments, Covid-19, UPI, Mobile wallets, cashless.

*Simran Adhav S, Y, Mcom. Indira College of Commerce and Science, Tathawade, Pune-33
** Ruchi S. Sawant, S, Y, Mcom. Indira College of Commerce and Science, Tathawade, Pune-33
***Guide- Dr.Thomson Varghese, Head of Department, Dept. of Commerce, Indira College of Commerce
and Science, Tathawade, Pune-33.

Introduction-
The Digital India program is a flagship program of the Indian government whose vision is to transform India
into a digital society and a knowledge economy. "Faceless, paperless, cashless" is one of the roles Digital
India professes. As part of promoting cashless transactions and converting India to a company with less cash,
there are various digital payment methods available. Demonetization is likely to be described as game
changers of the Indian economy. On the other hand, Demonetization is leading to boom cashless payments.
In this futuristic world, all payments will be made by contactless cards, mobile phone applications and other
electronic means while notes and coins will stand abolished. Digital transactions have increased during this
time. According to the latest data from the Reserve Bank of India, the total value of transactions contracted
by 46% in April compared to March, driven by the decline in various payment methods, except for direct
transfer payments of government benefits when using Aadhar platforms, which registered a jump of 138%.
Transactions and payments through various banking channels (checks, NEFT and RTGS, and ATM
withdrawal) fell between 26% and 71% in April compared to March. The sharpest contraction was observed
in the value of transactions issued by the issuance of checks, which fell 71 percent in April to Rs.1.63 lakh
crore in April against Rs 5.65 lakh crore in March. This clearly indicates that the detrimental impact of covid-
19 on digital payments, although significant, is not lingering and digital payment ecosystem in India is
expected to evolve rapidly to help shape the Post- COVID 19 era growth.

Relevance of study:
The pandemic hit resulted the change in mode of operation in Digital payment. Many of the customers found
physical banking to be riskier in the wide spread of Covid-19 virus and so they started choosing the better
alternative which will not put their life’s in risk. So, the researcher surveyed the impact of digital payment and
its result to society. The research was made to find out whether Digital payment platforms will be beneficial
post lockdown period as it was very beneficial during lockdown and pandemic situation.

Statement of problem-
To study the role, advantages of digital payment platforms and its result to the society.
Objective of study-

 To find out the effect of Covid-19 on Digital payments.

 To compare the respondent’s behaviour before lockdown and during the lockdown.
 To analyse the mode of payment done by the respondents before lockdown and during lockdown.
 To study the advantages and reason for e-cash by the respondents before lockdown and during
lockdown.

Hypothesis

 Digital payment platform have advantages of online payment compared to cash payment.
 Digital payment platform have been impacted by COVID-19.
 Consumers have a positive approach towards digital payment platform.
 Multiple payment platform are used for online payment.

Literature review

 M.Thangajesu Sathish, R.Sermakani, and G.Sudha (2020) this study is revealed that the
traditional system of cash transaction cannot completely be replaced by card or e-payment
system. People can adopt and use their mobile wallets for the payment transaction, fund
transfer, purchasing groceries and paying bills etc. The study has discussed the trust is the
main factor affecting users’ satisfaction directly and it impacts on many user’s intention to
adopt mobile wallets.
 Duvvuri Subbarao (2016) his book revealed about the suggestion to take the step by the
Government. Both the Government and RBI keep on moving India towards a less cash
economy by encouraging people to shift from cash to electronic payments for all transactions.
The shift from cash to electronic payments is a continuous process and is happening all the
time, but its implementation will depend on the public’s acceptance, which is in part a question
of making it convenient for people to use electronic payments. In ultimate analysis though,
facilitating the shift to a less cash economy is a question of meaningful financial inclusion.

The researcher referred to the above-mentioned Research papers and found that these papers were either
limited to the ‘Digital Payment’. The Comparison of impact on Digital Payments during Pre and Post
Lockdown situation were not included in the above research paper. Hence, the moto of this research paper is
to study this vital aspect of the society.

Research Methodology-

 Secondary Data-
The secondary data was collected from the following:
(a) Books
(b) News Papers
(c) YouTube
(d) Articles
 Primary data:
To test our hypotheses, we designed an experiment in which we shared a link of an online review and
collected some data through Interview method and even Observation Survey was considered.
Approximately Two hundred people of PCMC area received an invitation with a link to the online
experiment. A total of 100 participants accepted the invitation [equating a response rate of 50%] and
were presented with an easy and short questionnaire. The link was sent to people of PCMC area and
was also forwarded by the students in different groups and also were shared with family members,
(households). The data for age group 60 and above was collected through interview method as per
their convenience. Looking at the pandemic situation and valuing each life we got in touch with people
above 60 through telephonic interview method and personal interview method with our family.
The invitation link send to the groups was as follows:
https://forms.gle/XHSNuGLaNwDpwwAS9
 Research tool-
Structured Questionnaire for all the classes of respondents.
 Data presentation-
The data is done with the help of histograms (percentage method).Comparison has been made on the
basis of percentage method which was most suitable to the available data.

Data Analysis and interpretation.

Below data is based on a size of 100 sample reviews from different age groups of PCMC area. Data has been
categorised as per age group and analysis for each chart present below is done on the basis of a comparative
study.
Comparison is basically done two major aspect

 Individualizing comparison
Focuses on ‘a small number of cases in order to grasp the peculiarities of each case’. This basically
involves describing fully the characteristics or features each of the cases being studied. This helps to
broaden our knowledge and gives insight to see cases in-depth. This method cannot be said to be truly
comparative but makes use of comparison in a small aspect of research.

 Variation finding comparison

seeks to ‘establish a principle of variation in the character or intensity of a phenomenon by examining
systematic differences between instances. That is, comparing numerous forms of a single phenomenon
to discover logical differences among instances and establish a standard of variation in the character
or intensity of that phenomenon.
  Below mentioned bar graphs illustrate data of people staying in PCMC area of different age groups.
Age groups included are from below 30 to above 60. The bar graphs indicate different modes of
payment used by them on a day-to-day basis.
 The below illustrated data has been divided into 2 parts for getting a comparative view of the scenario
of each situation.
 The 2 bases on which data is being analysed and compared here are Pre-Lockdown and Post lockdown
situation.

 Do you feel cashless system was helpful during Pre and Post Lockdown?

The graph represents the helpfulness of cashless system in pre lockdown situation. Overall, the respondents
from age group of Below 30 and below 40 preferably feel cashless system was helpful but not accessible to
all. As per the data collected from the interview method in pre lockdown, we came to know that the

 Interface used by the online banking applications was difficult to understand.

 Need to remember Multiple passwords & username’s
 Not everyone accepts these payment’s
 Possibility for technical or human mistakes
 Livelihood of fraud and Hidden charges.
Above illustrated chart shows the representation of usefulness of cashless system before the lockdown period.
As per the graph’s we can see a rapid growth in usage of digital payments post lockdown.
We can see during post lockdown the number of yes responses has been increased drastically and even the
age group of Below 60 and 60&above has given a good response, where we can say the digital payment has
been adaptable and useful for almost all age groups. Comparing the chart with post lockdown period we see a
growth of approximately 50% in use of digital payments post Lockdown. The use of digital modes of payments
were less before the lockdown. An article from Hindu business line stated that there was a substantial growth
of 49.73% in the use of digital modes of payment post lockdown.

Source : thehindubusinessline.com

 What for you were the main disadvantages of visiting a bank branch during Pre Lockdown and post
Lockdown period?

The graph shows information about disadvantages of visiting a bank branch before the Lockdown situation.
Respondents from age group below 30 have a significant opinion that the waiting and Queues before the
lockdown period were comparatively high. According to the data collected it shows that major concern among
sample of consumers under study to be the security aspect of such electronic payments. Also, the lack of
technical knowledge and poor internet connectivity adds to be major hindrances for India to become cashless.

As per the second graph we can see that respondent’s from different age groups have changed their preference
towards digital payments as compared to pre lockdown situation. As per our observational survey we can say
that during post lockdown major people have started using digital payments, as per the reviews collected from
the respondents the graph indicates 68 people out of 100 faced no disadvantages while using digital payment
modes and could reduce visiting bank branches.

 What for you were the major barriers of digital mode of payment during the Pre and Post lockdown
period?

The major barriers focused on the graph were as follows:

 Don't trust the bank security

 No barriers
 Doesn't provide all services (e.g., Cheque Deposit)
 Finding the technology difficult
 Inconvenient (takes too long/too many questions)
 Don't like entering data digitally
The bar graph indicates the major barriers faced by people during lockdown situation. Major people from
the age group of below 30 faced no barriers however the people of other age groups such as Below 40 and
Below 50 are trying to adapt the changes and learning to use the digital modes of payment on day to day
basis .According to interview survey and observational survey we noticed that during the lockdown
different age groups have used online modes of payment and are now comfortable exploring the new
modes of payments, also in using the new software’s .People are now open to new ideas and are learning
using these new digital modes of payment’s ,trusting them , facing less barriers making their work easier.
  What are your reasons for choosing digital payment modes?

Easy to
Convenience maintain my
(24 hours banking
service, transaction
Age anywhere activity (see Low service
Groups connectivity) statements etc.) charge Privacy Safe and secure
Below30 13 4 6 6 24
Below 40 5 3 1 1 13
Below50 1 1 1 1 1
Below60 2 1 2 0 2
60 and
Above 3 1 2 1 5

What are your reasons for choosing digital payment modes?

60

50

40

30

20

10

0
Below30 Below 40 Below50 Below60 60 and Above

Safe and secure

Privacy
Low service charge
Easy to maintain my banking transaction activity (see statements etc.)
Convenience (24 hours service, anywhere connectivity)

Here are some reasons why it makes sense to adopt digital payment methods:

The most basic reason why one should go digital is the sheer ease it brings. Numerous forms of digital
payments made it more convenient – paying bills online or on your mobile, buying a public transport ticket
with an e-wallet or using a tap-and-pay card for a purchase – has all been reduced to a matter of seconds.
Above mentioned graph indicates the reasons for choosing digital payment services during the lockdown
period. It can be seen that the major reasons for younger generations to choose online payment modes is :
because of the Convenience , Ease of maintaining banking transactions also because it is safe and secure.

 During the Lockdown period even though the banking sector was a part of essential services people
preferred online transactions due to the panic situation.
 While comparing the data collected from the survey and the observational survey people Below 30 ,
Below 40 and above 60 believe that the digital modes of payment are safe and secure. Payment
regulations in India are governed by a forward-looking, yet cautionary body that is concerned with the
protection of its citizens. It has introduced various measures to safeguard transactions and continues
to do so regularly. Additional Factor of Authentication (AFA) and real-time transaction alerts were the
first few steps. This was enhanced further with biometric/Aadhaar-based authentication and robust
fraud mitigation measures.
 Respondents from same age groups which are Below 30 , Below 40 and above 60 prefer digital modes
of payment the respondents feel the digital payments during lockdown situation were Convenient (24
hours service, anywhere connectivity), Easy to maintain banking transaction activity (see statements
etc.) and Safe and secure.

 How often do you use the following payment methods?

As per the graph we see that some modes of payments have constant necessity such as cash , cards ,
electronic bank transfer , Pin less debit and mobile payments which made it easier for people during the
pandemic situation.There has been a rise in e-payments to the e-commerce platforms, delivering non-essential
and other essentials in the last three weeks with some reporting five times demand.
Many e-retailers are also requesting payments via digital mechanisms, which is also contactless and
reduces risk of spreading coronavirus. Besides the National Payments Corporation of India has also urged
people to use digital payment methods, so that people do not step out even to go to the ATM, reduce social
contact and curb the spread of Covid-19.

 Which of the following apply to you?

A) Do you think that using Internet banking makes your life easier?

B) Have you ever lost money due to digital fraud?

C) Have you ever had cash lost or stolen?

Along with proactive measures, there are redressal mechanisms that safeguard consumers in case of breaches.
When you lose a wallet/cash, you know that it is all gone. With digital payment instruments, it is simpler –
you lose it, you block it – limiting your financial exposure. You can also raise chargebacks and disputes over
transactions that you are erroneously been charged to you. If you face a fraud and report it in time, there is a
liability to pay you back as well.

 How likely are you to move back to cash payments post COVID-19?

Majority of participants (65 per cent) were of the view that they would not move back to cash payments as
they find digital payments safe and secure. However, nearly one-third of the participants have signalled that
they might consider moving back to cash payments primarily citing low acceptability as a reason. 7 per cent
participants cited security concerns as reason to considering reverting to cash which indicates a need to focus
on fortifying existing infrastructure as well as awareness of available dispute and fraud redressal avenues to
consumers. The participant’s views tend to denote that crossing the threshold of initial entry barriers in
acceptance and use of digital payments is crucial to adding consistent end-customer base.

Proving Hypotheses:

 As per graph 1st and 2nd Digital payment has proved to be a blessing to the society during pandemic
hit, since , merchant shops and physical movement for purchase of commodities was restricted ,
individual consumers seem to have been encouraged to avail alternative online modes of purchase for
essential as well as non-essential commodities hence, the hypotheses have been proved.
 As the survey was conducted in the urban area, so the receiver were found from the urban area, but
literature review helped to know that, we took telephonic interviews to understand the rural area also
 used the digital banking platform up to certain extent and they were not the major receiver. Hence,
the hypotheses have been proved.
 Digital Payments helped overcome the risk of life due to corona virus and Consumers have a positive
approach towards digital payment platform, hence, the hypotheses is proved.
 Digital payment platform has been increased positively in post lockdown refer (graph no.1) hence,
the hypotheses has been proved.
 During lockdown period people used multiple payment platform are used for online payment, refer
(graph no.5), hence, the hypotheses has been proved.

Result of study:

Impact of Covid-19 on digital payments

According to the results of poll survey on the impact of COVID-19 and its resultant lockdowns, a majority of
81 per cent respondents reported higher usage of digital payment methods than cash. The responses indicate
a significant apprehension for cash payments, with a simultaneous transition to digital methods, primarily due
to aspects of convenience, safety, security, and fear of transmission while allowing the consumers to maintain
physical distancing. While, some participants (8 percent) have responded that they’d be willing to use digital
payments exclusively. However, cash is still slated to be utilized possibly for small denomination transactions
as well as at small scale vendors where possibly acceptance infrastructure is not present. Around 11 percent
per centage of the participants were of the view that the digital payments usage would be same as pre-COVID-
19 levels. The higher inclination towards digital payments during this pandemic suggest that with proper
infrastructure in place we could bring more and more population into digital payment ecosystem.

The study examines the effect of adopting digital payments impact on consumers of the
banking sector of India. The result put together gives us an important policy direction towards what can enable
the country to increase cashless payments. The results indicate that the deployment of technology for digital
payments have improved the performance of banking sector and able to achieve the motive cash less country.
The study gives emphasis to the percentage of awareness on maximum utilization of technology.

Other Key Points:

 The investigator not only discovered about the positive impact of digital payments during pandemic
situation but also it cannot be denied that educating rural areas regarding digital payments is very
necessary for the growth of the society.
 In 2019, about 26.62 percent of the Indian population fell into the 0-14 year category, 67 percent into
the 15-64 age group and 6.38 percent were over 65 years of age. India is one of the largest countries
in the world and its population is constantly increasing. While population is increasing it gets very
necessary for the society to adapt with new technology.
  The people belonging to the age group 15-64 are comparatively high .As it is the working category of
the country on which the economy is dependent. Thus it gets necessary to make sure that every person
is educated about digital modes of payments and the acceptance from the society is as well required
for a constantly growing economy like India.

Limitations

 This research paper is limited to Pimpri-Chinchwad area only because of time constraint.
 The information given by the respondents might be biased because some of them might not be
interested in providing correct information.
 Respondent tried to escape some statement. This was one of the most important limitations faced, as
it was difficult to analysis and come at a right conclusion.

Suggestions

 Educate Consumers
Many consumers are still wary about using digital payments, but if companies can educate their
customers on the security advantages of digital payments, more consumers will be comfortable with
the new form of payment. Consider displaying signage in your business or using email marketing to
explain to customers how digital payments are much more secure than traditional transactions.

 Integrate More Banks

One way to make digital payment methods more effective is to integrate as many banks as possible so
that it becomes more convenient to transfer money from person to person. Just look at what Venmo,
Apple Pay and Google Pay are doing. Clearly explain the security benefits of using said digital
payment method, such as tokenization and/or multi-factor authentication.

 Widen Crypto currency Adoption

Digital payments will be more effective once we see more widespread adoption of crypto currencies.
Crypto currencies can significantly reduce (and possibly eliminate) intermediary transfer costs,
resulting in significant savings. People around the world will benefit, especially in third-world
countries where a large proportion of people do not have access to a traditional bank account.

 Artificial intelligence (AI) and machine learning

AI and machine learning as the cornerstone of fraud prevention. We’ve known about the importance
of artificial intelligence (AI) and machine learning to financial services for years, but in many cases
the industry has been slow to implement the technology. With the sophistication of financial crime
increasing, and the growing concerns of consumers of being a victim of fraud, it is no surprise that
adoption is now accelerating rapidly. Banks on AI applications already, and in 2021 AI and machine
learning based systems will be the standard in fraud prevention.

 Businesses will turn to digital loyalty apps as well as payments

As businesses increasingly turn to digital payments as the new norm, an opportunity is developing to
engage with customers deeply on a digital level as well. Rewards, discount vouchers, points cards, and
other loyalty schemes will become further integrated into the digital payment processes businesses
begin to offer, including the development of branded checkout apps that allow customers to pay
digitally in store and continue to engage in a traditional way.
Conclusion
It is too early to conclude what the changes might look like in each cultural, demographic, and institutional
context, but we can be sure that covid-19 is already reinforcing existing trends towards increased digitisation
of payments. The Reserve Bank of India last year said it aimed to increase digital transactions to about 15%
of gross domestic product by 2021, from nearly 10% at the time. The government is aiming for a billion digital
transactions per day as the world’s fastest-growing smartphone market empowers consumers to transact at the
click of a button. The government has asked banks to encourage their customers to use digital payment
methods as a precautionary measure against the Coronavirus outbreak. Meanwhile, RBI has also urged
customers to use digital banking facilities amid the Coronavirus outbreak. In summation, the impact of
COVID-19 on the digital economy has been complex and multi-faceted. The increased adoption in the short
term is likely to accelerate the sustained shift toward digital payments. Also, the pandemic has uncovered new
perspectives and opportunities for Indian businesses and individuals, which can only be capitalized upon, by
due agility and versatility to anticipated change.

Scope of further study:

Study can be made on the risk factors of digital payments platforms and find solution for it.Suggestions can
be further studied to understand the pros and cons of the suggestions if implied by the Digital payments
platforms. Also we can study on the best possible way to educate the rural area having less knowledge about
digital payments which should include guidance related to overcome illiteracy.

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