VOLUME: 09, Issue 05, Paper id-IJIERM-IX-V, October 2022
52 STUDY ON PENETRATION OF DIGITAL PAYMENTS IN RURAL AREA OF TEHSILDAMOH (M.P.)
Kushagra Soni1,Dr. Rupesh Shukla2
1Scholar (M.B.A.-EC) IMS (D.A.V.V.) Indore
2HOD (Computer App.) SCMKVM, Indore, (M.P.), Visiting Faculty (I.M.S. D.A.V.V. Indore (M.P.)
Abstract - In recent time the payment preferences in India, the economy has been dominated by cash. But everything is changing so frequently because of the increased smartphone adoption and favorable regulatory policies. These consumption and government policy changes have created the baseline infrastructure required for a leapfrog growth in digital payments. Of course, Covid-19 is also a significant reason behind the development of online payments because it forced all of us to do everything contactless, and we were bound to go cashless.
Though the biggest question is whether this change has been adopted in urban India only or if there are positive results in rural India. Why rural India? The answer is Rural India is an integral part of the country’s economy, and the data says it contributes about 46% of the national income. It is estimated that approximately 66% of India’s population is rural. Despite the rapid rise of urbanization, the data says that rural India will continue to account for a major portion of India’s population in the next decade.
Along with smartphones, the number of Internet users in rural India is growing at a good pace, but a significant digital divide exists between urban and rural India. As per the latest report by TRAI, internet penetration in rural India was only about 33% compared to 99% in Urban India. This gap mainly stems from a lack of infrastructure and lack of awareness.
The primary focus of our research is to identify rural awareness of digital payments, understand the current scenario for digital payments by the people of rural areas after the pandemic situation, and identify the rate of awareness and adoption of electronic payments in rural areas. And finally, pinpoint all the pain points and various drawbacks of adopting a digital payment system for them.
Keywords: Digital Payment, Online Payments.
1 INTRODUCTION
The two words ‘demonetization' and 'COVID-19' played an essential role in India's journey to becoming a cashless economy. One is the foundation of digital payments, and another is becoming the prime source for building up digital payments. COVID-19 is another demonetization-like catalyst in the industry. The digital payment providers have been very proactive in responding to this situation by offering groceries, masks, sanitizers, COVID-19 insurance, integrating with the PM fund, and other essential products and services. Mobile payments will drive about 3 per cent of total digital payments of Rs 7,092 trillion (US$ 100.61 trillion) by the financial year 2025, up from the current one per cent.
In this period, mobile payment users would increase from 162 million to around 800 million. The digital payment model refers to sending and receiving money using digital methods by both payer and payee. We call it an electronic
payment. It does not involve hard cash (currency notes). There are several methods of transferring payments: cards (debit/credit), mobile wallets, mobile apps (like Google pay, Paytm, phone pay), net banking, Electronic Clearing Service (ECS), National Electronic Fund Transfer (NEFT), and Immediate Payment Service (IMPS). In India, the government actively promotes and encourages digital payments through initiatives such as
"Digital India" that aim to create a cashless, paperless, and faceless society.
1.1 Historical Background
The roots of electronic payment are the availability of the internet. In 1871 western Union debuted the Electronic fund transfer (EFT). Since then, people have loved the concept of sending money to pay for goods and services without having to be physically present. In the development of electronic payments, technology has played a significant role.
VOLUME: 09, Issue 05, Paper id-IJIERM-IX-V, October 2022
53 Today, making a purchase is as easy astapping a button on your smartphone.
American Express introduced the first plastic card for electronic payments in 1959. The Reserve Bank of India administers the evolution of electronic payments in India (RBI) and in 1998, captured the payment system in India.
The Reserve bank of India (RBI) provides the payment and settlement act 2007 for the regulation and supervision of payment systems in India.
1.2 Government Takes on Digitalization in Rural Areas
Monetary digitalization grew rapidly in the bleak Times, let up by the covid-19 pandemic. There have been many positive developments in India's digital financial sector. The Ministry of Electronics and IT (Meity) has rolled out the "Digital Finance"
scheme to provide detailed knowledge, specifically in rural areas. It aims at setting CSCs (common service centers) as digital financial hubs by spreading awareness regarding government policies and digital finance options for rural citizens. The government put a liberal investment of Rs 65.625 crores to publicize digital financial services, including IMPs, UPI, Bank, POS machines, etc. Reserve bank of India (RBI) points of sale infrastructure in both physical and digital form made it possible for small villages to take advantage of digital services.
Digital India: It is a campaign that all the government services are made available electronically by increasing the internet connectivity and online infrastructure or making the country digitally empowered in the field of technology. It includes plans to connect rural areas with high- speed internet networks to develop stable and secure digital infrastructure, universal digital literacy, and digitally deliver government services.
1.3 Objectives of the study: -
The research carries some specific objectives with it. We are analyzing the penetration of digital payment in the rural sector. The main goals are: -
To understand the current scenario for digital payments by the people of rural areas.
To identify the rate of awareness and adoption of electronic payment in rural areas.
Determine the difficulties and various drawbacks of adopting a digital payment system.
Make Suitable suggestions to adopt digital payment systems in rural areas.
Boost e-banking, e-governance, and e-education among the rural population.
To increase ease of conducting transactions.
2 RESEARCH METHODOLOGY AND SAMPLE DATA
This study is the result of an on-field survey based on primary data.
Considering that the research is on digital payments penetration in rural areas of Damoh Tehsil of Madhya Pradesh, data has been collected through direct interaction with people of villages like Hirdepur and Chopra Khurd in the Damoh district (Madhya Pradesh). The said research also contains the level of awareness about digital payment among the villagers of different age groups. The study was conducted by questionnaire method. Various age groups were taken into consideration while choosing the respondents. The sample size of 100 respondents has been selected from villages. The evaluation is based on the views and information gathered by a detailed questionnaire to know their preference, knowledge, thinking, and suggestions. The graph-based method has been used for data analysis and collating inferences.
2.1 Demographic profile
2.1.1 Respondents distribution 1. Gender
The presented research said that among the total 100 respondents, 79 were male and 21 were female
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54 2. Age CriteriaWe have distributed the respondents based on different age groups i.e.
3. Education level
The highest education level is taken into consideration then it is found that 88% of the total respondents from the villages are educated and among them, 32% are graduates and postgraduates.
4. Line of occupation
Classified into occupational categories has been represented below-
Basis No. of respondents Percentage
Student 18 18%
Self Employed 41 41%
Employed 25 25%
Housewife 16 16%
Total 100 100%
2.1.2 The availability of Smartphones As per the Analysis, the count of smartphones in both the rural areas only 59% of the people have smartphones and still, 49% of the people uses feature or basic phones with no internet connectivity.
3. NETWORK COVERAGE
According to the analysis, the network coverage in both the rural areas is more than 50% of the people are satisfied. Only a few have issues regarding network coverage. Many of them suggested that free internet services should inspire to improve network coverage providing stimulus to electronic payment systems.
4.TRAINING MODULE AND AWARENESS
The Major problem that has been identified in the analysis is in rural areas.
53% of the respondents are not aware of Digital Payment and only 47% of respondents know about Digital Payment.
Almost every educated person has little knowledge. The research stated that many people have smart phones and facilities of the internet but not every person who is using the internet is aware of digital payment. As per the data, there are 94%
of respondents lacks training regarding Digital Payment. The main reason is the inexistence of proper training by the government and private institutions.
VOLUME: 09, Issue 05, Paper id-IJIERM-IX-V, October 2022
55 5. PAYMENT PREFERENCESAs per the data, cash is working like a king in both rural areas. Whereas 92% of the person still prefer cash transactions.
This phenomenon is in part related to the lack of training of the people. 55% of respondents have their ATM Card But still, only 12% are using it. This difference shows that somewhere people are hesitating the reason may their fear of security. Only 9% of them use payment apps/e-wallet like Paytm, Google pay, Phone pay, etc.
Now here is the data about payment preferences and having a bank account.
6. REACH OF DIGITAL PAYMENT PLATFORMS
After analysis, the most popular UPI payments apps in rural areas were taken into a consideration to determine the choices of Payments apps by the people. It is found that they have the most popular three applications in their smart phones.
Paytm, Google pay and Phone pay. The reason behind the customer is attracted by the cashback they offer to the customer the next time the customer will prefer the same payment apps again and again.
7. CONCLUSIONS, SUGGESTIONS AND FULLFILMET OF OBJECTIVES-
The Pace might be slow, but the rural areas are evolving along with this digital trend. The research study says that the awareness rate itself is very low that people don’t even want this convenience in payment system. One major factor for this low awareness rate is the literacy rate itself, the literacy rate in the rural areas is also very low. Other factor includes the technicality of this medium i.e. a digital payer is expected to be technically knowledgeable so that he can use a particular application like BHIM, PayTM, PhonePay etc. So we can say that the no.
of smart phones also plays a significant role in the adoption of digital payments.
Regarding the smart phones we have discussed with the users and found that the purpose of using a smartphone for most of them is just attending calls, watching movies, and using camera while some of them agreed that they use various apps on the Smartphone and one of the above payment app were among them.
Most of the people in these rural areas are labor. Since the time of Covid- 19 and lockdown, local labor markets had experienced a severe shortage of employment opportunities. It is difficult for them to find work even two days a week; what they got as wages spend all their money on the fulfillment of their basic needs. As a consequence they don’t even think about online payment.
7.1 Lack of Trust
Customer loyalty is largely dependent on trust. Most people do not trust digital payments. Many people lack the confidence to use this because they do not trust the Internet and believe there are security risks. Most people are apprehensive about having someone else
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56 access their bank account. Due to a lackof exposure and understanding of how it works, these individuals may have limited experience with the online world.
7.2 Fear of Fraud
Most people feel insecure about online payments as they fear online fraud.
Somewhere they are hesitant to share their data with digital platforms.
Therefore most of the people preferred cash over digital payments
8. RECOMMENDATIONS
While conducting research, researchers also note down the obstacle and views of various respondents, and so as a result, they want to make some suggestions in light of what they have observed. The following recommendations would contribute to improving digital payment services in rural areas based on the research carried out by the researchers.
Digital payment facilities should be available at fertilizers shops and ration shops so that more no. of people in rural areas getbenefited from the services.
Through door-to-door campaigns and surveys, NGOs and Business Correspondents (BCs) should educate and fortify rural
communities about digital payments.
Significance of digital payment should embrace in our education system. Providing assignment will assist growth and awareness of digital payment in rural areas.
Payment system demonstration will also work as a helping hand −−
incumbent should come up with varying demo stall; intend to simplify the payment process.
REFERENCES
1. https://www.ibef.org/news/digital-payments- market-in-india-likely-to-grow-3folds-to-rs- 7092-trillion-by-2025-report
2. https://www.managementstudyguide.com/dig ital-payments-pros-and-cons.htm
3. https://timesofindia.indiatimes.com/blogs/voi ces/the-shift-to-digital-payments-empowering- rural-areas-to-make-transactions-seamless/
4. https://www.forte.net/electronic-payments-a- brief-
history/#:~:text=Electronic%20payments%20h ave%20their%20roots,the%20point%2Dof%2D sale.
5. http://archive.msruas.ac.in/pdf_files/Publicat ions/MCJournals/August2018/Paper3.pdf 6. https://objectiveias.in/status-of-digital-
payments-in-india/
7. http://docs.neu.edu.tr/library/6818361362.p df
8. https://razorpay.com/learn/digital-payments- india-definition-methods-importance/
9. https://en.wikipedia.org/wiki/Digital_India
