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A study of adoption of digital payment systems in India:
A systematic review of Literature

Prof. Vaibhav Dongare,
ATES`s Technical Campus, Akole.
Dr. Nitin Zaware
Rajeev Gandhi Business School, Pune.

Abstract:

This paper reviews the evidence for adoption of digital payment systems in India. Literature on adoption
levels is examined, and the research is synthesized into an understanding of 'investment' for each country's
digital payments system, with a particular emphasis on credit card penetration. The findings are then used to
recommend strategies for disseminating information about and promoting use of digital payment systems in
India. By providing a systematic review of literature the current study focused on adoption levels of digital
payment in India, the researcher identifies the key challenges that were faced by customers and retailers
regarding digital payments. The problems and issues that were identified through detailed analysis were: 1.
Lack of understanding about what is going on in India's electronic payments market, particularly with regard
to adoption of digital payment systems in India, 2. Lack of trust in the payment cards in India, 3. Poor
customer experience, 4. Inadequate information about digital payment systems in India, 5. Lack of
awareness among retailers about digital payments, 6. Lack of information on how to use digital payment
systems and their benefits to consumers. The paper also gives suggestions for the successful implementation
of digital payments in India.
Keywords: Adoption, Digital payments, Digital Transaction Schemes, E-Wallet, India

1. Introduction

India has recently seen a dramatic increase in the number of electronic payments, particularly by means of
credit cards and debit cards. The growth is not only due to the easy availability of electronic payment
instruments but also to a change in consumer behaviour towards plastic money. For example, while in
December 2014 alone almost 62 million credit and debit cards were issued, contributing to more than 300
million active cards (India Today, 7th July, 2015).
Louis R and Zaware N, (2016), elaborate that, changing consumption pattern of the Indian consumer has
been undergoing a significant transformation over the years. Improvement in the economic conditions,
exposure to International media, foreign travel, degree of urbanization, education levels, emergence of new
job opportunities in the service sector such information technology, call centres and retailing that influences
lifestyles are some of the drivers. This can be one of the reasons that people have been motivated to use
mobile phones as their digital wallets and not worry about lose change. Economic reforms introduced two
decades ago have seen the middle classes swell.
Samudre H, Zaware N (2019), study research concludes that there are various reasons behind the purchase
of smart phones among management students and different parameters used by the students at the time of
purchasing smart phones. Day by day the use of smart phone is increasing. In this backdrop, the growth in
digital payments is not limited to credit cards alone. A recent study by the Reserve Bank of India revealed
that in 2014 more than 1 billion digital transactions were done through ATMs (Indian Express, 18th January
2015) and even more transactions are expected to be made using cards in the next few years. Retailers who
have accepted digital payments have also benefited from this trend as they have seen an increase in sales
volume as a result of card usage. In terms of revenue generation, the number of transactions ranged between
Rs 3 and 25 billion per annum (Business Standard, 15th December 2014).

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