Keywords

Digital Payments; Generation Z; Perception of Users; Internet; Virtual Channels.

Introduction

Digital money (also referred to as electronic money, digital currency, or e-cash) comes in two basic forms, computer networks and digital stored value systems Cohn, 2001; EU, (2014). In recent years there has been considerable interest in the development of digital money schemes (Al-Laham et al., 2009). Digital money is viewed to have the potential to take over from cash as the primary means of payments (ibid.). In fact, digital money is widely argued to have greater potential to replace central bank currency Al-Laham et al., 2009; Berentsen, (1997). This clearly indicates that the advent of digital money will have an impact on the overall banking system and monetary policy (ibid.). Using cards, Internet payments are broadly supported and advertised. Governments are shifting their operations online as to allow their service payments to be conducted there. This is the aforementioned change from a sociological act to a technological one. According to Master Card study, of the $63 trillion in total global consumer spend in 2011, 34 percent ($21 trillion) was done with cash, while cashless payments accounted for 66 percent ($42 Consumer payments for goods and services accounted for about 11% of the value of payments around the globe, but this still represented more than 90% of volume of payments (or number of transactions). Cash accounted for 60% of the value of total retail payments in shops or online, but when other large consumer payments (e.g. wire transfer to buy a car, direct debit to pay mortgage) were included, the value of payments represented by cash fell to 34%. This sudden increase in electronic transactions is due to the multiple advantages cashless payments hold over paper money.

From commonly used cards to newly launched UPI, digital payments has many types of payment. The following are the different modes of digital payments used by consumers viz., Unified Payment Interface (UPI) apps, Aadhaar Enabled Payment Service(AEPS), USSD, Debit & Credit cards, Electronic Wallets,(SBI YONO, ICICI Pocket, etc.,) Mobile Payment apps, Paytm, Tab, BHIM, LevelUP, Dwolla, Squarecash, Loop Pay, Facebook Messenger, Venmo, etc.,

Rationale of the Study

Paper money and coins (cash) are still the primary global payment methods, and are widely viewed as the physical portrayal of prosperity. The use of physical money is an act based on social behaviour rather than technology. Cash, while it can hide the user?s identity, it has its limitations in availability and transportability. Further, with a rise in purchases through digital means, cash is seen rather an obstacle and risky to conduct transactions through virtual channels quickly. The explosion of internet usage for digital transactions have drawn the attention of researchers towards rapid development of internet connection, and its reach among the younger generations of India has opened up the prospects of Digital Era particularly towards payment for transactions. Government of India in its Budget 2016-2017 made an official announcement and encouraged its citizens to shift to digital technology for making payments and transactions. With this initiative, India started marching towards cashless economy in full swing, but could not find place in the top non-cash markets whereas china has. The usage of debit cards, ATMs has considerably increased in comparison with credit cards. Though, significant research had been done on credit cards and its variants, very little research studies has been attempted on digital payments in the Indian context particularly among the young generations who fall under Generation ? Z category. Further, study on usage of android apps like UPI, Aadhaar enabled payment services, E-wallets etc., has not been attempted in a greater way by researchers and thus leaves a considerable gap in the research context which the researcher has now has attempted. This research focusses on to find out the impact of digital payments among Generation Z (those who were born between 1995 -2015) who are tech savvy at large. Hence this study has been undertaken to identify the various aspects and perception towards digital payments among Generation Z.

Objectives of the Study

Outcome of our literature survey revealed that very little research studies were carried on modern digital modes for payments among Individual users in India. Though, India had aggressively launched the digital campaign in the recent past, for transitioning from traditional cash based payments to technology adoption by its people in order to curb many social evils found in traditional payment mechanism with cash. Previous researchers had pointed out that user demography also play an important role in technology adoption by the users. Therefore in this study the author?s make an attempt to understand the awareness, usage behaviour, and to explore the dimensions of perceptions. The authors also intend to study the Gen Z preferred modes of transactions and the spending habits . Finally, the study identifies the association of demographic variables and its impact in use of digital modes of payments.

Literature Review

The better educated, middle aged members of the upper middle class seem to be the prime target; the most important reasons for using a credit card were “case of payment”, followed by “risk of carrying cash”, informal sources of information appear to be more influential than mass media advertising in penetrating the market; the authors conclude saying that, usage and the administration of credit cards are influenced very much by the infrastructure of the country (Barker 1992). Different cards provide the different packages to attract the customers like tele-ticketing, discounts, insurance coverage and provide reward points etc. The author claim that, Indian customer remains credit shy and concludes that they have to change their spending habits (Vora and Gidwani 1993 ) “One reason for the slow adoption rate of electronic fund transfer at point-of-sale (EFTPoS) is that consumers perceive that EFTPoS has a higher level of risk than other traditional payment methods. Study shows that EFTPoS has the lowest physical risk and highest financial risk, the credit card has the lowest psychological risk and highest time loss risk, while cash has the highest physical risk and lowest performance risk. (Simon and Victor 1994). An empirical research study conducted in urban Turkey indicates that there are certain relationship between socio-economic and demographic characteristics of Turkish consumers and their credit card holding and usage behaviours. It was observed that one of the determinants of credit card use is related to the age of the family head and family life?cycle stage.. Authors feel that getting more people to use credit cards is indeed a marketing challenge. (Kaynak 1995). The author explores the potential use of behavioural and physiological biometric techniques in the battle against credit card fraud in the retail environment. It discusses different techniques such as automatic speaker, dynamic signature verification, fingerprint, facial recognition, retinal and iris scanning, hand and finger geometry. Author feels that while biometric technologies have the potential to reduce plastic card fraud there are several problems which must be addressed before they can be used in retail environments, like the recognition performance, speed of use, usability, customer acceptance, device cost are considered along with industry standards for biometric devices. (Torbet and Marshall 1995). This Paper outlines the rationale of those who are keen to promote the cashless society and the implications for marketers charged with winning consumer acceptance for payment by plastic card. The plastic card payment product is analysed under the three headings of pay later, pay now and pay before and a view is offered as to the future prospects for each type of plastic card in contributing to the development of the cashless society. (Worthington 1995). In recent years there has been considerable interest in the development of digital money schemes (Al-Laham et al., 2009). Digital money is viewed to have the potential to take over from cash as the primary means of payments (ibid.). In fact, digital money is widely argued to have greater potential to replace central bank currency (Al-Laham et al., 2009; Berentsen, 1997). According to MasterCard study, of the $63 trillion in total global consumer spend in 2011, 34 percent ($21 trillion) was done with cash, while cashless payments accounted for 66 percent ($42 trillion) (Thomas et al., 2013). Consumer payments for goods and services accounted for about 11% of the value of payments around the globe, but this still represented more than 90% of volume of payments (or number of transactions). Cash accounted for 60% of the value of total retail payments in shops or online, but when other large consumer payments (e.g. wire transfer to buy a car, direct debit to pay mortgage) were included, the value of payments represented by cash fell to 34%. This sudden increase in electronic transactions is due to the multiple advantages cashless payments hold over paper money. Today, around 85% of all retail payment transactions are done with cash, which equates to 60% of retail transaction value (Thomas et al., 2013). MasterCard research indicated that the degree of readiness to move to a cashless society is determined by factors like the accessibility and affordability of financial services, the scale and market share of retailers; the level of technology that is available; and participation of consumers in the formal economy.

Research Methodology & Data Sources

This is an exploratory study, the authors have considered use of digital technology for payments specifically focused on Generation Z (who were born between the year 1996 to 2006). The author’s had collected the data from the Students population from higher educational institutions/Universities who belong to the category “Generation Z” (also called as i-Generation, Post Millennials) who are a demographic cohort. “A significant aspect of this generation is the widespread usage of the internet from a young age, who are comfortable with technology and interacting on social media websites” (Wikepedia)

We have used a self - constructed research instrument to extract the views of the respondents on perception, risk, benefits and factors that influence to move towards digital modes. This study also rallies on secondary data through, review of previous studies, through journals, websites, newspapers and periodicals.

The survey instrument was circulated among 150 students representing the Gen Z category. After due editing process and removing the incomplete answers, the authors had settled down with 100 valid and complete responses which was included for further analysis. Thus a success rate of responses is 66 per cent. The variables picked up includes gender, age, monthly expenditure, etc., which was duly analysed and reported.

Results & Discussions

Respondents Demography

The author’s had quantified the responses into meaningful inferences by analysing the data using appropriate statistical tools. The personal profile of the respondents has been explained with the help of frequencies and percentages. The analysis (vide Tables 1& 2) reveals that, 70 percent of the respondents were found to be Males and about 30 per cent Females. 75 percent of them belong to the age group of 18 ? 20 years, and 25 per cent belong to 21 -24 years. Educational level reveals that 92 percent were students pursuing their undergraduate studies, 8 per cent of them were pursuing in their Post-Graduation studies. 84 percent of them hail from Nuclear family type, where 16 percent of them come from a Joint family set up. Since they are teen agers, they depend on their parents for their monthly pocket expenses, we found that 45 percent of the respondents spend more than Rs.10k every month and 43 per cent spend between Rs.5k to Rs.10k.

Table 1 Demographic Profile of the Respondents
		Frequency	Percent
Gender	Male	70	70.0
	Female	30	30.0
Age	18-20	75	75.0
	21-24	25	25.0
Educational Qualification	UG Level	92	92.0
	PG Level	8	8.0
Family type	Nuclear	84	84.0
	Joint	16	16.0
	Less than 5 K	12	12.0
Monthly Expenditure	5 K - 10 K	43	43.0
	More than 10 K	45	45.0

Table