A Study on Factors Affecting the Payment Options by the Users of Digital Financial Products in India

Abstract

The objective of financial inclusiveness for economic development can be accomplished through the adoption of digital pathways. Delivery of financial services is to be promoted via digital platforms. This has also prompted the use of Digital Financial Services and Products (DFS) for different purposes. People have also started using the digital platform as payment methods. The present paper attempts to explore the cardinal factors affecting the payment methods opted by people in India. The paper reflects factors namely Access, Ownership of different DFS, Proficiency in using digital methods of payment, Financial Knowledge, and Awareness affecting the Current Payment Methods opted by people (CPM). The study proposes the Modes of Digital Operations (MDOP) as the mediator affecting the relationship between exogenous and endogenous constructs. The data collected by framing a structured questionnaire was analyzed by framing a Structural Equation Model (SEM) using Smart PLS with 5000 bootstrapping. The result revealed that 98.4 % people with age above 50 years use digital methods of payment like debit cards, credit cards, mobile money, etc. by taking the help of their friends and relatives. They are dependent on others for digital use as they lack proficiency or awareness of digital operations or financial knowledge. The policy-making authorities are required to pay attention to the need for awareness programs and Financial Literacy camps to make people competent in using digital methods of payment without any dependence.