Page 57 - IMDR JOURNAL- 2022

understand this issue, it is necessary to look at use of other payment instruments as well as their penetration
in India. Before discussing what works (or doesn't) when it comes to credit card usage in India, the paper
provides an overview of different payment instruments that are available or under consideration in India.
According to Zaware & Dongare (2021), The Indian economy has seen spectacular growth in cashless
transactions during the previous six years, from 2014-15 to 2019-

20. The implementation of demonetization in 2016 resulted in a massive expansion of the cashless Indian
economy. The volume of transactions has increased at a CAGR of
48.17 percent over the last six years, while the value of transactions has increased at a CAGR of 16.15
percent. It's worth noting that, in tandem with the growth of the digital economy, the retail industry has also
experienced irregular growth. The Indian retail industry is expected to grow to USD 1100 billion in 2019-20,
up from USD 534 billion in 2014-15. For the six-year period, the CAGR was 15.55 percent. Based on

macro-level data from 2014-15 to 2019-20, this paper examines the relationship between the two – growth in
the cashless economy and growth in the retail market. According to regression study, cashless growth
accounts for about 92 percent of the retail market's growth. There is a 0.96 link between the two. Without a
doubt, the data support the notion that a cashless economy is a key enabler for India's retail business to
flourish.According to Mishra (2012), in comparison to other Asian markets, India does not have a well-
developed credit card infrastructure. In India there are many different payment instruments available for use
across the country but the options change from state to state as well as from city to city. For example, until
very recently in Kerala state, credit cards were not widely accepted. However, since the introduction of
Whatsapp payments in 2015 (Business Standard, 10th October 2015), this situation is changing and some
states like Maharashtra and Andhra Pradesh are also having success with their own digital payment systems
(Business Standard, 18th December 2014).
Kaur et.al. (2016) have analysed if the emerging payment options have successfully penetrated their markets
and have also evaluated how a smaller store can adopt new payment options. The paper also looked at the
issues that were related to acquiring, holding and using different payment instruments. It explains how to use
electronic money in India, which makes electronic money transfer possible through mobile phones or
through E-wallets.

The paper further discusses reasons for the lack of success with digital payments in India. Mishra (2012)
asserts that there is a lack of understanding about digital payments among users as well as merchants. There
are many people who think about their use of digital payments but don't actually use them. In some cases,
consumers may use digital payments if these are presented to them by merchants, but will not use them if
they are presented to them by the government. In addition, consumers lack knowledge about the various
payment instrument types and their underlying benefits and disadvantages (Business Standard, 19th
November 2014).
Mallat (2007) points out some of the reasons for which people are reluctant to use credit cards. First, they
may have negative experiences associated with using credit cards and they do not want to repeat these.
Second, they may not possess adequate

knowledge about the benefits of using credit cards. Thirdly, some consumers are concerned about whether
their transactions will be validated by the merchant. Fourth, if the credit card gets stolen, it can be a problem
for this consumer as money will be withdrawn from his/her account without his/her knowledge and controls
(Mallat 2007). Mishra (2012) also points out that consumers may not use credit cards due to lack of trust in
the credit card companies.
Sanghita Roy, Dr. Indrajit Sinha (2014). stated that E- payment system in India, has shown tremendous
growth, but still there has lot to be done to increase its usage. Still 90% of the transactions are cash based.
Technology Acceptance Model used for the purpose of study. They found Innovation, incentive, customer

52