Electronic Payment System in India project

Electronic Payment System In India

large-value and retail payments. The central bank played a pioneering role in automating the paper-
based clearing system in the 1980s. It introduced an electronic funds transfer system and electronic
clearing services (ECS Credit and Debit) in the 1990s.

New customer-protection measures on cards for electronic payments

The also said that it is in the process of benchmarking Indian payments systems and instruments
against global standards.

MUMBAI: The central bank would soon come up with a new set of customer-protection measures
aimed at improving user confidence in electronic payment channels, helping achieve the federal
objective of reducing the use of cash in business transactions.

The proposed Reserve Bank of India (RBI) regulations include having a common timeframe for all
authorised electronic payment systems to respond to customer complaints and setting up a
compensation framework for failed transactions.

“To have prompt and efficient customer service in all the electronic payment systems, it is necessary
to harmonise the turn around time (TAT) on the resolution of customer complaints and chargebacks,
and to have a compensation framework in place for the benefit of customers,” RBI governor
Shaktikanta Das said on Thursday in his speech after the monetary policy review. “The Reserve Bank
proposes to put in place a framework on TAT for resolution of customer complaints and
compensation framework across all authorised payment systems by the end of June 2019.”

The governor said that despite the central bank prescribing appropriate redressal mechanisms for
customer grievances and issuing guidelines to various payments system operators on paying users in
case of failed transactions, the lack of a common industry-wide mandate is resulting in non-
uniformity in complaint resolution.

“Currently various payment systems have various redressal mechanisms. We have found them to be
not uniform across the industry,” Das said.

The RBI also said that it is in the process of benchmarking Indian payments systems and instruments
against global standards. The findings of this study would be published in May 2019.

“Efficient payment systems reduce the cost of exchanging goods and services and are indispensable
to the functioning of the financial markets. The past decade has witnessed several innovations in
retail payments across the globe,” the governor said. “Benchmarking… is necessary to gauge India’s
progress against payment systems and instruments in major countries and give further impetus to
the planned efforts for deepening the digitisation of payments.”

Furthermore, the regulator would also widen by month-end the ambit of the NBFC ombudsman
scheme for customer complaints to all companies with assets beyond Rs 100 crore, including to
entities that do not accept deposits. In February 2018, the RBI had introduced the ombudsman
programme just for the customers of deposit-taking NBFCs.
WhAt is epayment system?

An e-payment system is a way of making transactions or paying for goods and services through an
electronic medium, without the use of checks or cash. It’s also called an electronic payment system
or online payment system. Read on to learn more.

The electronic payment system has grown increasingly over the last decades due to the growing
spread of internet-based banking and shopping. As the world advances more with technology
development, we can see the rise of electronic payment systems and payment processing devices.
As these increase, improve, and provide ever more secure online payment transactions the
percentage of check and cash transactions will decrease.

Electronic payment methods

One of the most popular payment forms online are credit and debit cards. Besides them, there are
also alternative payment methods, such as bank transfers, electronic wallets, smart cards or bitcoin
wallet (bitcoin is the most popular cryptocurrency).

E-payment methods could be classified into two areas, credit payment systems and cash payment
systems.

1. Credit Payment System

Credit Card — A form of the e-payment system which requires the use of the card issued by a
financial institute to the cardholder for making payments online or through an electronic device,
without the use of cash.

E-wallet — A form of prepaid account that stores user’s financial data, like debit and credit card
information to make an online transaction easier.

Smart card — A plastic card with a microprocessor that can be loaded with funds to make
transactions; also known as a chip card.

2. Cash Payment System

Direct debit — A financial transaction in which the account holder instructs the bank to collect a
specific amount of money from his account electronically to pay for goods or services.

E-check — A digital version of an old paper check. It’s an electronic transfer of money from a bank
account, usually checking account, without the use of the paper check.

E-cash is a form of an electronic payment system, where a certain amount of money is stored on a
client’s device and made accessible for online transactions.

Stored-value card — A card with a certain amount of money that can be used to perform the
transaction in the issuer store. A typical example of stored-value cards are gift cards.

Pros and cons of using an e-payment system

E-payment systems are made to facilitate the acceptance of electronic payments for online
transactions. With the growing popularity of online shopping, e-payment systems became a must for
online consumers — to make shopping and banking more convenient. It comes with many benefits,
such as:

Reaching more clients from all over the world, which results in more sales.

More effective and efficient transactions — It’s because transactions are made in seconds (with one-
click), without wasting customer’s time. It comes with speed and simplicity.

Convenience. Customers can pay for items on an e-commerce website at anytime and anywhere.
They just need an internet connected device. As simple as that!

Lower transaction cost and decreased technology costs.

Expenses control for customers, as they can always check their virtual account where they can find
the transaction history.

Today it’s easy to add payments to a website, so even a non-technical person may implement it in
minutes and start processing online payments.

Payment gateways and payment providers offer highly effective security and anti-fraud tools to
make transactions reliable.

drawbacks?

E-commerce fraud is growing at 30% per year. If you follow the security rules, there shouldn’t be
such problems, but when a merchant chooses a payment system which is not highly secure, there is
a risk of sensitive data breach which may cause identity theft.

The lack of anonymity — For most, it’s not a problem at all, but you need to remember that some of
your personal data is stored in the database of the payment system.

The need for internet access — As you may guess, if the internet connection fails, it’s impossible to
complete a transaction, get to your online account, etc.

E-commerce, as well as m-commerce, is getting bigger year after year, so having an e-payment
system in your online store is a must. It’s simple, fast and convenient, so why not have one?

Still, one of the most popular payment methods are credit and debit card payments, but people also
choose some alternatives or local payment methods. If you run an online business, find out what
your target audience needs and provide the most convenient and relevant e-payment system.

5 turning points in the history of e-payments?

Have you ever imagined how the world would look like if we had to pay for goods with a grain or the
animals we’ve just hunted? For thousands of years, it was the reality we had to cope with. Luckily,
these days are over and electronic payment methods (e-payments) are now available for everybody
and are an important part of our day to day activities and life. Nowadays paying for goods and
services is really convenient – it can be as easy as a one-time click.
It’s obvious that the development of e-payments is closely related to online commerce and follows
the improvements in that field. As you probably know and experienced, e-commerce is extremely
convenient and online payments are way more suited to customer’s requirements that traditional
payment form like cash. There are a variety of payment methods today, such as online banking,
credit and debit card, charge card or e-wallet, but take a step back and look at how it all began.

1. It all started with the World Wide Web

The origin of e-payment is, of course, related to the beginning of the internet, which revolutionized
the world like nothing before. After all, if there were no World Wide Web, there wouldn’t be online
stores and e-services.

The history of the internet starts in 1969 with ARPANET, the military network which was intended to
be communication network in the Vietnam War era. But the main turning point happened in 1989
when Tim Berners-Lee presented the solution of making information easier to publish and access on
the internet by using the so-called “sites” or “pages”.

2. The beginning of e-payment systems

Along with the internet development, pioneer online payment services started to operate in the first
half of the 90s. In 1994 Stanford Federal Credit Union was established – the first financial institution
which offered online internet banking services to all of its members. However, first online payment
systems weren’t user-friendly at all and required specialized knowledge of encryption or data
transfer protocol. What is more, the systems weren’t adapted to constant changing of users’ number
and their transactions.

In the beginning, the main players on the e-payment market were Millicent (founded in 1995), ECash
or CyberCoin (both in 1996). The majority of the first online services were using micropayment
systems and their common attribute was the attempt to implement the electronic cash alternatives
(such as e-money, digital cash or tokens).

Moreover, in 1994, the Amazon is founded (one of the e-commerce pioneers) and Pizza Hut starts
accepting online food ordering. Can you believe it? The first online delivery system was one step
ahead of all Pizza Hut’s competitors.

3. Evolution of payment possibilities

Most of the modern payment systems are easy to use with the payment process minimized to just a
few simple steps. They are website or app based, which means there is no need to install a distinct
software or buy special equipment, which was the case a few years ago. Nowadays systems are
available from any device connected to the internet.

Every year there are new solutions in e-payments world that stimulate e-commerce growth. New
players make electronic payments both easy to implement and convenient for users who pay online.
So what’s next?

4. Time for game changers

The online and offline payments are interpenetrating and the distinction between these two
becomes more and more blurred each year. It is related mainly to the dynamic growth of
technologically advanced mobile devices with the internet connection, and retailers who allow you
to pay in their brick-and-mortar stores with your smartphone are nothing exceptional nowadays.

Growing number of online buyers is noticeable, so we’re sure enough that smart technologies will be
becoming more popular than conventional banking.

5. Social networks and new technologies

It is also of the consistent popularity of social networks and online gaming. Facebook only (which
was launched in 2004) has 1,55 billion monthly active users and is still growing. Till today, the
network extends its functionality with online games, which allows us making in-game purchases.

Furthermore, mobile technologies are developing fast and customers no longer need PC’s or laptops
to buy online. The future of e-payment depends on the development of new technologies and the
role of the internet in our life.

As you see, the payments landscape is changing fast and it’s driven by new technologies. It’s obvious
that future of online payments depends on the development of the internet infrastructure. Users are
more willing to pay for intangible goods (such as online games or multimedia access) and customers
will make more payment choices.

How to define e-payments?

An electronic payment (e-payment), in short, can be simply defined as paying for goods or services
on the internet. It includes all financial operations using electronic devices, such as computers,
smartphones or tablets.

E-payments come with various methods, like credit or debit card payments or bank transfers. Note
that one of the most popular and common online payment methods nowadays are credit cards.

How e-payment works?

Online payments are made instantly, so it’s convenient and saves lots of time. It is important,
especially today when every aspect of our lives happens at a fast pace. The entire process behind the
payment button is complicated, so here’s the basics to make you understand it better.

1.Customer action – The process begins when a customer visits the merchant’s site and adds to the
cart items (products or services) they want to buy. They, then need to fill out the payment form with
certain information (e.g. card number, expiration date, CVV code, address). Depending on the
payment method, the customer is either redirected to external service or bank’s website or
continues the payment on the website or in an app.

2.Payment authentication by the operator – The payment gateway (with other parties involved)
checks whether the payment information is valid. If everything’s OK, the process continues and the
payment gateway reports back the successful transaction. After that, the customer receives a
payment confirmation — the notification is usually displayed in real-time.

3.Payment to the seller’s account – An online payment provider receives a payment from a
customer’s bank and transfers it to the merchant’s account.

In general, e-payments are considered a fast and secure alternative to traditional payment methods,
such as bank transfers, checks, etc. Accepting electronic payments comes with lots of benefits for
both merchants (of any size) and consumers.

Moreover, electronic payments are highly effective for international transactions. It is generally
cheaper, easier and faster than other payment methods. As a merchant, you don’t have to worry
about currency conversion or high commission.

Important Points About Electronic Payment Systems – Banking Awareness

Important Points About Electronic Payment Systems

Immediate Payment Service (IMPS):

1.Immediate Payment Service (IMPS) is an instant real-time interbank electronic funds transfer
system in India. IMPS offer an inter-bank electronic fund transfer service through mobile phones
available 24×7, throughout the year including Sundays and bank holidays.

2.Customers can transfer and receive funds through IMPS using their registered mobile number and
Mobile Money Identifier (MMID) or Account number and IFSC code. This facility is provided by
National Payments Corporation of India (NPCI) through its NFS switch. The participants for IMPS are
Remitter, Beneficiary, Banks and NFS-NPCI.

3.The IMPS was publicly launched on November 2010. Currently, there are 53 commercial banks,
101 Rural/District/Urban and cooperative banks, and 24 PPI signed up for the IMPS service.

Objectives of IMPS:

1.To enable bank customers to use mobile instruments as a channel for accessing their bank
accounts and funds.

2.To subserve the goal of Reserve Bank of India’s (RBI) encouraging the retail payments in electronic
way.

3.To facilitate mobile payment systems already introduced in India with the Reserve Bank of India
Mobile Payment Guidelines 2008 to be inter-operable across banks and mobile operators in a safe
and secured manner.

National Electronic Fund Transfer (NEFT):

1.National Electronic Funds Transfer (NEFT) is a nation-wide payment system facilitating one-to-one
funds transfer. Under this Scheme, individuals, firms and corporates can electronically transfer funds
from any bank branch to any individual, firm or corporate having an account with any other bank
branch in the country participating in the Scheme. For being part of the NEFT funds transfer
network, a bank branch has to be NEFT- enabled.

2.There is no limit on either minimum or maximum on the amount of funds that could be transferred
using NEFT. However, maximum amount per transaction is limited to 50,000/- for cash-based
remittances within India.

3.The NEFT system takes advantage of the core banking system in banks. Accordingly, the settlement
of funds between originating and receiving banks takes places centrally at Mumbai, whereas the
branches participating in NEFT can be located anywhere across country.

4.NEFT is an electronic fund transfer system that operates on a Deferred Net Settlement (DNS) basis
which settles transactions in batches. From July 2017, settlements of fund transfer requests in NEFT
system is done on half-hourly basis. There are twenty three half-hourly settlement batches run from
8 am to 7 pm on all working days of week.

5.No charges to be levied on beneficiaries but charges only applicable for the remitter. The
maximum transaction charges approved by RBI are given below:

.up to 10,000 : Rs. 2.50 + GST

.above 10,000 up to Rs. 1 lakh: Rs. 5 + GST

.above 1 lakh and up to Rs. 2 lakhs: Rs. 15 + GST

.above 2 lakhs: Rs. 25 + GST

Real Time Gross Settlement (RTGS):

1.RTGS system is a fund transfer mechanism for transfer of money from one bank to another on a
‘real time’ and on ‘gross basis’, which can be defined as the continuous (real-time) settlement of
funds transfers individually on an order by order basis.

2.This is the fastest possible money transfer system through the banking channel. Settlements in
‘Real time’ refers payment transaction is not subject to any waiting period. The transactions are
settled as soon as they are processed.

3.The RTGS system is primarily meant for large value transactions. The minimum amount to be
remitted through RTGS is 2 lakh. There is no upper ceiling for RTGS transactions. The objective of
RTGS systems by central banks throughout the world is to minimize risk in high-value electronic
payment settlement systems.

4.The RTGS service window for customer’s transactions is available to banks from 9 AM to 4.30 PM
on week days and from 9 AM to 2 PM on Saturdays for settlement at the RBI end. However, the
timings that the banks follow may vary depending on the customer timings of the bank branches.

The maximum transaction charge on RTGS was divided into two categories:

a) Inward transactions: Free

b) Outward transactions:

1.2 to 5 lakh – 30.00 per transaction,

2.Above 5 lakh – 55.00 per transaction.

 The demonetization resulted in tremendous growth in digital payments. With the

government initiative such as Digital India and increased use of mobile and internet are
means to exponential growth in use of digital payment. This transformation towards
digital payments benefits in more transparency in transactions which empowers the
country’s economy. In recent days many changes took place in the payment system like
digital wallets, UPI and BHIM apps for smooth shift to digital payments. The paper talks
about the services that the customers prefer from the payment banks. It also captures
how convenience/ease is helping payment banks to expand customer base. The role of
demographics as deciding factors for customers in choosing payment banks is studied in
this paper. The paper further studies the effect of reference groups on the customer’s
decision to choose a bank. Payment gateways have emerged as the most significant
contributor in pushing Cashless and electronic payments. The surge of smart phones and
internet connectivity of 3G and 4G is reflected in the robust growth of payment gateways
in India. The present study is focused on Customer preference towards payment
 gateways with respect to Charges and Risks and effectively analysed the impact of
demographic variables on the usage of Payment gateways.

Literature review

Literature Review 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 convenience and legal framework are the four factors which
contribute to strengthen the E- payment system. E-payment systems are important mechanisms
used by individual and organizations as a secured and convenient way of making payments over the
internet and at the same time a gateway to technological advancement in the field of world
economy (Slozko & Pello, 2015). Rakesh H M & Ramya T J (2014) in their research paper titled “A
Study on Factors Influencing Consumer Adoption of Internet Banking in India” tried to examine the
factors that influence internet banking adoption. It is found that internet banking is influenced by its
perceived reliability, Perceived ease of use and Perceived usefulness. In the process of internet
banking services expert should emphasize the benefits its adoption provides and awareness can also
be improved to attract consumers‟ attention to internet banking services. Kartikeya Bolar (2014)In
his research paper “End-user Acceptance of Technology Interface In Transaction Based Environment
“stated that Creators International Journal of Pure and Applied Mathematics Special Issue 1261 and
investors of technology need information about the customers‟ evaluation of their technology
interface based on the features and various quality dimensions to make strategic decisions in
improving technology interfaces and compete on various quality dimensions. Nitsure (2014) in his
paper observed that the problem being faced by developing countries like India in the adoption of E-
banking initiatives due to low dissemination of Information Technology. The paper highlighted the
problems such as security concerns, rules, regulation and management. In India there is a major risk
of the emergence of a digital split as the poor are excluded from the internet and so from the
financial system. Balazs Vinnai, general manager, Digital Channels, Misys(April 25, 2016), says that “It
is critical for banks to consider new digital channels as part of an integrated strategy and evolve from
first to second generation digital banking: switching digital from a supporting role, to the primary
sales and communication channel for banks,” says Vinnai. “Reengineering processes around the
customer is not easy, but banks must embrace digital banking to remain competitive and relevant.”

Review of literature

1. Subhani in 2008 conducted a study on ‘Plastic Money/Credit Cards Charisma for Now and Then’.
The study was based to find out the charisma of plastic money, its usability and affordability and its
impact on its preference to use. The research found that the preference to use of plastic money/
credit card has its pros and cons with its usability and affordability. According to the consumer
behavior, plastic money is a form of conditioning and acts as a stimulus which qualifies a consumer
to spend. The study shows that the preference to go for plastic money has a positive attitude that it
is easy to use. The perception of credit card usability is associated with a psychological phenomena
that people are likely to spend less with credit card and spend more with the same amount of cash
on hand in the same budget and this precept also linked with the consumer self convenience.

2. Lowenstein and Hafalir in 2012 conducted a study on “The Impact of Credit Cards on Spending”.
The study focused on two types of customers: one who carry debts and the one who do not carry
debt. The one who carry debt are known as the Revolvers and the one who do not carry debt are
called the convenience users. The study measured the impact of payment with credit card as
compared to cash by an insurance company employees spending on lunch in a cafeteria. It was
found that there was change in the payment medium of people from cash to a credit card when an
incentive to pay with a credit card was given. It was then found out that credit cards do not increase
spending. However, the use of credit cards has a differential impact on spending for revolvers and
convenience users. Revolvers spend less when induced to spend with a credit card, whereas
convenience users display the opposite behavior.

3. JiaLokeYiing (2007) Review of network Economics, December, 6 (4). In his study “Determinants of
merchant participation in credit card payment scheme" aimed at establishment of the determinants
of merchant participation in credit card payment schemes. It is also found that a merchant’s
personal background, type of business and total value of sale play an important role in determining a
merchant’s acceptance of cards in making payments and it is also found that customer’s usage of
credit cards and other merchants’ acceptance of credit cards in payments have influenced a
merchant’s choice significantly. Findings suggest that non-pecuniary strategic factors are the strong
drivers and barriers to a merchant’s involvement in credit card payments services as compared to
the monetary factors.

4. Santomero (1996) analyzed the various alternative forms of money such as prepaid cards, cash
cards electronic purse, smart cards etc and their demand for medium of exchange with the help of
Baumol-Tobin Model. It was found that range of use of asset decreases with the fall in household
income, usage patterns of medium of exchange differ with the same income but different allocation
of income among consumption of goods and households tend to use the higher interest medium of
exchange to buy the good that constitutes the largest amount of its income etc.

5. P Manivannan (2013) in his research paper "Plastic money means less payment of cash checking
system " said that use of plastic money is the measure of a luxury credit card, and the need. The
plastic money and the electronic payments and used by people of higher income category. The
extension of this facility is not only meant for customers in urban areas or cities, but also is for
customers who live in rural areas. However, today, with the development of banking industry, fixed
income group also begins the use of plastic and electronic money payment systems and especially
credit cards.

6. Subhani in 2011 conducted a study on the "plastic money / credit cards for prestige between now
and then." The study was based on knowledge of the charisma of plastic and its impact on the choice
for the use of money. The research found that the preference for the use of plastic money / credit
card has several pros and cons although it is easy to use and affordable. According to the consumer
behavior it is stated that plastic money is a form of motivation for a consumer to spend. The study
suggests that the preference to use plastic money to have a positive relationship with the easiness of
use because the principle of a credit card has been linked to usage with psychological phenomena
that people tend to spend less with a credit card and spend more with the same amount of cash in
hand.
7. Ramasamy S R., 2006, in his research Problems and Prospects of Plastic Money in Bangladesh said
that money is always considered as an important medium of exchange. But over the past few years,
money has changed its form from coins to paper cash and today it is available in electronic form of
money or plastic card .Hence, the major changes which has been brought in banks is through
introducing products that can be used as an alternative to paper money. Plastic cards are a kind of
innovations through which the customers can avail the banking services just by owning the card
issued by their bank and that too without going to bank and engage himself in the official banking
hours. Plastic money is mainly debit and credit cards that facilitates cash to be drawn from an ATM
booth or shop on credit. Both these modes eliminate the need of actual cash in hand at the time of
purchase.

8. Brito and Hartley 1995 in his research found that consumers prefer purchasing through credit
cards because of its ease and convenience of use irrespective of its rate of interest. He said when
consumers use credit cards as a mode of financing, credit cards compete with bank loans and other
forms of financing.

9. Barker (1992) in his study, Globalization of credit card usage: The case of a developing economy”
investigate the attitude of Turkish consumers towards credit cards, and the approach of card issuers.
The better educated, middle aged members of the upper middle class were the prime focus; the
most important reasons for using a credit card were “case of payment”, along with the “risk of
carrying cash”, Non holders do not carry credit cards because they do not know much about it. The
usage and the administration of credit cards are influenced by the infrastructure of the country and
therefore, credit card companies have to modify their marketing procedures rather than following a
standardized approach.

10. Natarajan and Manohar (1993) “Credit Cards–an Analysis”. A study has been attempted to know
that to what extent the credit cards are utilized by the cardholders and the factors influencing them.
The study is confined to cards issued by the Canara Bank... Chi square test has been conducted to
know the level of utilization by taking into consideration ten components i.e.. numbers of purchases,
shops, percentage of purchases, place, frequency, type of product, type of services, cash withdrawal
facilities, add on facility, insurance schemes etc. the test reveals that sex, age, educational
qualification of card holders has no relationship with utilization of the card rather the occupation,
income, employment status of spouse, mode of getting card is related with utilization of credit
Cards.

11. George (1995), “The card majors lead the way” shows that VISA and Master Card play an
important role in any international payment system. Both VISA and Master Card act guarantor of
payment to merchants who are willing to accept the cards. VISA and Master card each have nearly
22000 banks all over the world as their members and handle several million transactions each day.
This gives them a transaction handling capability unmatched by any individual bank. They provide a
global network that allows authorization, clearing and settlement of card transactions, both of credit
and debit card.

12. Torbet and Marshall (1995), “One in the eye to plastic card fraud.” This study evaluates the
potential use of behavioral and physiological 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.

13. Worthington (1995), “The cashless society” paper describes the cashless society, where clumsy -
to handle coins and notes are replaced by efficient electronic payments initiated by various types of
plastic cards is a boom for the twenty-first century. Some of the interested parties stand to gain
more than others if the cashless society becomes a reality. 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 analyzed
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.

14. Joshi (1996), “Variants in plastic.” His analysis says that card issuers seeks to introduce the
emerging payment card technology like debit and smart cards. Credit cards are being gradually
revolutionized by various factors: friendly technology, a competitive marketing environment, the rise
of the financially sophisticated consumer who avoids paying interest and the emergence of new
competitors. The concept of debit cards as a new payment system has gained acceptance in the
Asia-Pacific region in past few years. Being a new concept, mass acceptance is gradual. It shows that
spending on credit cards is higher than debit cards but the number of transactions is more on debit
cards. There are technological and infrastructure hurdles for debit cards as it is significantly different
from credit cards. Study shows that profit margins in debit cards are one-third than those from
credit cards.

15. Maganty (1996), “Changing Dimension.” the author studies the emerging trend and importance
of debit card in daily lives of Indian society. Debit cards are expected to be in use in places where
most transactions are done by cash or cheque in supermarkets, petrol stations, convenience stores.
There cards are designed for customers who like paying by plastic card but do not want credit. These
cards not only keep the cardholder debt free but also provide a detailed account of spending. These
types of cards are ideal for those who have a tight budget and want to keep within it. Study shows
that there are two types of debit cards i.e. on line and off line debit cards. With the computerization
and modernization plastic money will become the status symbols in the 21st century of Indian
traditional bound society.

16. Radhakrishan (1996) study on “DEBIT CARDS” shows that the debit cards also have found wide
acceptability than credit cards because of assurance of payments to retailers, switching of
cardholders to debit card because of using interest free period to avoid high interest cost, annual
charges as compared to debit cards etc. The study shows that the growth of service industry in the
country, electronic fund transfer, point of services offer a large potential for banks to cutting down
cost associated with the paper based clearing and payment services. The introduction of debit cards
can take place subsequently and the objective should be to attain a critical mass in issuing number of
such cards so that the operation becomes cost effective.

17. Worthington (1996), “Smart Card and retailer-who stand to benefit?” Paper describes the major
current payment options which are open to consumers, and accepted by retailers with a review of
the costs and benefits of each payment option. Retailers, as the merchant acceptors of payment by
suffer from the introduction of the smart card. Article sets out to explore the pros and cons of the
smart card for retailers. The introduction of the smart card will not eliminate any of the existing
method of payment and it is probable that the smart card will even introduce new means by which
nonfinancial data, such as purchase patterns, can be collected and exchanged. There will also be
substantial costs involved for retailers such as upgrading thousand of stores and head office systems,
replacement of point-of –service terminals, training to thousands of cashiers for the acceptance of
smart cards. The smart card could be a useful addition to the existing payment options at the point
of service. It could offer retailers to access to new delivery channels and better communication
channels and help to maintain relationship with customers.

18. Chan Ricky (1997), “Demographic and attitudinal differences between active and inactive credit
cardholders–the case of Hong Kong,” The study was to examine the demographic and attitudinal
differences between “inactive” and “active bank credit cardholders in Hong Kong. The groups of card
holders have been classified according to their differences in usage rates. Active card holders” in this
study were operationalized as those whose monthly card usage rate was over ten times, where as
“inactive card holders” were those whose monthly card usage rate was below ten times. As far as,
demography is concerned, income was found to be the single most important Review of Literature
38 variable influencing the card usage rate. Specifically inactive card holders were found to earn less
than their active counterparts Paper also examine, to induce less resourceful card holders to
increase there card usage rate, card issuers are advised to strengthen their co-operation with
various retailers so as to turn their cards into the most preferred mode of payment.

19. Gambir (1998), “Credit cards in India”. He describes that credit cards are relatively new to India.
Treated as a status symbol and as a vehicle of consumerism Indian banks burst this business. Till
recently as it did not go along very well with the spirit of people because they do not have much
money to spend because of bad economic conditions. But with increasing economic and financial
liberalization and growing prosperity of the urban middle class banks fells that it is desirable to enter
into this line of business. Author feels that Credit Cards and money transfers with latest
technological changes would definitely reduce the burden on cash in our system. Therefore, RBI has
to give an impetus to the popularity of plastic money which is consistent with present policy of
economic and monetary liberalization.

20. Carow and Kenneth (1999), “Debit, Credit, or Cash: Survey evidence on Gasoline Purchases.”
analyzed the consumer’s payment option to use debit, general purpose credit cards, gasoline credit
cards, or cash. Based on the results from a nested multinomial logit model, author’s found
consumers are more likely to use cash when they have less education , lower incomes, are
middleaged and own fewer credit cards. Debit and credit card users are younger, more educated
and hold more credit cards. Respondents who use their debit card are less likely to use their gasoline
credit card. The result suggests that greater debit card usage will place the greatest competitive
pressure on the gasoline credit card program.

21. Caskey and Sellon (1994), in a study analyzing factors that influenced the success of debit cards
,suggested that debit cards could be especially useful for those who did not have access to the
complete range of existing payment services. For example, for those who did not have credit cards,
they might find that a debit card could meet their desire to carry less cash or to make payments
where checks were not acceptable. It might be easier to get a debit card than a credit card because
there was no extension of credit and it could be obtained by anyone who had a transaction account.
They also proposed that consumers who used credit cards for the benefit of having credit available
were unlikely to be interested in debit cards. Most consumers based their decision of using debit
cards on non-price factors such as convenience and availability.

22. Mandeep Kaur and Kamalpreet Kaur(2008),in their article, “Development of Plastic Cards
Market: Past, Present and Future Scenario in Indian Banks” conclude that Indian banking sector
technology as all the groups of bankers have now recognized it as essential requirement for their
survival and growth in future Despite the strong advances in e-payments, an estimated 90 percent of
personal consumption expenditure in India is still made with cash which indicates the tremendous
growth potential of this business. So this can be considered as mere beginning which indicates the
bright future prospects of plastic card market in India.

23. P Manivannan (2013) in his research paper “Plastic Money a way for cash Less Payment System”
examined that Plastic Money i.e. usage of Credit card was measured a luxury, and has become
needed. These plastic money and electronic payments was and used by only higher income group.
This facility extended not only to customers in urban areas or cities, but also to customers residing in
rural area. However, today, with development of banking and trading activity, the fixed income
group or salaried classes are also start using the plastic money and electronic payment systems and
particularly Credit cards.

24. Anupama Sharma (2012)in her research paper “Plastic card frauds and the
countermeasures:towards a safer payment mechanism” have thrown light on the number of frauds
increased considerably in the usage of plastic cards as in case of plastic card frauds the most affected
parties are the merchants of goods and services as they have to bear the full liability for losses due
to frauds, the banks also bears some cost especially the indirect cost whereas the cardholders are
least affected because of limited consumer liability and concluded that all these losses can be dealt
with by making the prudent use of the new technology and taking the respective counter measures.

25. Bansi Patel and Urvi Amin (2012)in their research paper “Plastic Money : Roadway Towards Cash
Less Society” discussed that now days in any transaction Plastic money becomes inevitable part of
the transaction and with it life becomes more easy and development would take better place and
along with the plastic money it becomes possible that control the money laundry and effective
utilization of financial system would become possible which would also helpful for tax legislation.

26. Canner and Luckett (1992) Credit cards allow consumers to borrow within their credit limit
without transaction costs, which includes all the time and effort involved with obtaining a loan from
a financial institution. This convenience attracts many consumers to pay high interest on outstanding
credit card balances, rather than taking the time to apply for a loan with a lower interest rate. As a
result, credit cards account for a substantial and growing share of consumers' debt

27. Chakravorti (1997), (2000); Chakravorti and Emmons (2001); The popularity of credit cards as a
payment medium has been attributed to the convenience of not carrying cash and checks, the
limited liability of lost/ stolen cards, and additional enhancements, such as dispute resolution
services and perks (i.e., frequent-use awards programs). They are frequently used for convenience,
telephone and Internet transactions.

28. (Murali D. and Jaishankar P., 2007) analyzed in his research that banks in India are looking at
deploying biometric ATMs targeted to reach the unbanked population in rural India. Using
thumbprint and voice guidance in ATMs reduces literacy requirements to a considerable extent.
Thus, establishing the identity of a rural depositor through biometrics makes it possible for illiterate
or barely literate people to become part of the banking user community.

29. Mandeep Kaur and Kamaldeep Kaur (2008) Development of plastic cards market: past, present
and future scenario in Indian banks found that plastic money in the form of cards has been actively
introduced by banks in India in 1990's. But it was not very popular among Indian consumer at the
time of its introduction. The change in demographic features of consumers in terms of their income,
marital status, education level etc. and up gradation of technology and its awareness has brought
the relevant changes in consumers' preferences. These changing preferences have also modified
their outlook and decision regarding the acceptance and non- acceptance of particular product and
services in the market. Thus, the plastic cards are gaining popularity among bankers as well as
customers and getting accepted in the market place.

30. Nirmala. R. Sonu (2015): ANALYSIS OF THE USE OF PLASTIC MONEY highlighted the advantage of
instant transaction as one of the major factors favoring the use of plastic money over real money by
the population today. It has already been highlighted by the study that convenience of not carrying
cash and ease of transaction is one of the major psychologically influencing factors that encourage
the use of plastic money instead of real money. Additionally, the results of the study have also
stressed upon the convenience and ease of use while paying or shopping by plastic money. The
saving of time and the fact that the plastic money seems to be more portable also seems to further
the cause of a possible change in the scenario of money usage in the economy. On the other hand,
Security comes forward as a major cause for concern for the population using plastic money.
Therefore, it is easy to conclude that the population is ready as ever to use plastic money at a
greater level due to its high levels of ease and convenience.

MAY

23

Electronic Payment: Current scenario and scope for improvement - A

case Study: Union Bank of India WriteKraft Dissertations INDIA

Electronic Payment: Current scenario and scope for

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Abstract
Electronic payment has gained a lot of curiosity among bankers and more and more
of them in India have started to implement the same in their day to day working. This
new way of doing business is more efficient and convenient to both the banking
system and the customers.
This research study has been made with an effort to study the prospects of
Electronic payment system in the Indian banks and financial institutions. A key
aspiration of the study is to find out the factors that influence the implementation of
Electronic payment in the country.
Past literature on use of technology, Electronic payment and customer bank
relationship have been studied to get an insight on the various models and theories
related to the subject. These theories and models have provided with many aspects
of use of technology in banking that have been utilized in the study.
The data for the research has been collected through questionnaires which were
given to the employees of the Union Bank of India .
The bank has developed an electronic system which had improved the Bank-
Customer relationship. It is also advised that the bank should enhance the
knowledge of its employees about the Electronic payment and update all the legal
codes, necessary to grow in the industry
Table of Contents
1. Introduction
Background of the Study
2. Methodology
Problem Statement
2.1. Objectives of the Study
3.2 Research Questions
3.3. Scope of the Research
3.4 Significance of the study
3.5 Research Hypothesis
3.6 Union Bank of India (UBI)
Definition of Related Terms
3. Literature Review
3.1. Consumer and Internet Banking
3.2. The View on Electronic payment
3.3. Electronic payment and the Common Banking Products
3.4. Telephone and PC Banking
3.5. Cheque System
3.6. Card System
3.7. Automated Teller Machine (ATM)
3.8. The Influence of Innovation on the Adoption of E-Commerce
3.9. Comparative Advantage
3.10. Compatibility
3.11. Complexity
3.12. Perceived Risk
3.13. The Challenge Facing India
3.14. The Entry of Indian Banks into Electronic payment
3.15. The Regulatory Challenges
3.16. Electronic payment Profitability and Efficiency
3.17. Bank Customer Relationship
3.18. Operations of Financial Institution
4. Research Methodology
4.1. Introduction
4.2. Quantitative research
4.3. Qualitative Research
5.6. Population of the Study
5.7. Sampling Techniques
5.8. Sample Size
5.9. Source of Data
5.10. Methods of Data Analysis
5.11. Test of Hypothesis and Inference
5.12. Characteristics
5.13. Applications
5.14. Uses
5.9. Data Collection Tools
5.10. Primary Data
5.11. Questionnaire
5.12. Interviews
5.13. Secondary Data
5. Data Analysis and Discussion of Findings
5.1. Introduction
5.2. Presentation and Analysis of Data
5.3. Qualification of Respondents
5.4. Working Experience
5.5. Designation of the Respondents
5.6. Professional Qualification
5.7. Department of Respondents
5.8. Threat to Electronic payment
5.9. Threat Assessment
5.10. Respondent Assessment of Union Bank of India Electronic payment System
5.11. Information Technology Training Program
5.12. Level of Electronic payment
5.13. Improvement of Customer Satisfaction
5.14. Test of Hypothesis
Hypothesis one
Hypothesis Two
Hypothesis Three
Hypothesis Four
6. Discussion of Findings
7. Conclusion
8. Recommendations
9. Limitations of the Study
The Employee Can Be Partial In the Response
Lack of Faith on Format
Lack of Interest
Measures to Minimize the Effects of the Limitations
10. References

2. Background of the Study

Electronic payment in India is fast catching up with the banks and financial
institutions as well as the customers. However, cash based transactions are still
preferred (www.indiatoday.co.in, 2012).
Exploiting the latest development in the fields of information technology and
communications technology and strategies to implement technology to provide better
facility to customers has acquired utmost importance and a basic requirement to
sustain in the competitive environment of today’s banking sector.
The automated teller machines (ATM) are the most basic example of the use of
technology in banking services. They facilitate banking services to customers even
after the banking hours. Online banking has provided facility to customers to know
their account details and conduct transactions without going to bank in physical form.
People can perform various transactions without having to pay through actual hard
cash. This gives a huge relief and convenience to the customers. They need not
carry hard cash every time with them (India today, 2012).
They can shop, buy tickets and instantly buy shares by making payments instantly
by their accounts through e-payment facility.
Electronic payment options provide great convenience and advantage to
businessman. They can make payments any time, check their account details and
they need not carry cash while traveling. Payment can be made faster and instantly
(Mahesh-Akpore, S, 1998).
With the popularity of mobile internet, e-payment has also extended its scope to
include mobile banking facilities. Customers can check their account details and
make payments by their accounts using their handsets (Wisconsin-Madison, 1998).
In India, State Bank of India, ICICI and HDFC are banks who are currently leading
the e-payment sector (naicity.co.in, 2012). Finnacle system is a popular e-payment
system in India and is also linked to the Indian government’s schemes and tax
account systems (dailynews.co.in, 2012). Another popular use of internet banking is
the payment of taxes. Muthoot Finance, a popular financial services company in
India, emphasizes that more and more people are opting for online payments of
taxes in order to get relief from long queues at the tax offices (dailynews.co.in,
2012). They divulges that people opt for its services to get tax payments done
without taking too much stress and also avoid fines in case of late payments due to
busy schedules. Even the government of India has expressed its pleasure in online
modes of payments of taxes as it also assists them in faster clearance of taxes and
generates more revenue for them (dailynews.co.in, 2012).
According to ICICI business, customers are the most affected by Electronic payment
options and report that these banking options has decreased their business costs by
reducing the time required for getting their goods cleared by the authorities and they
can make their payments and pay all kinds of taxes more quickly.
State Bank of India has initiated a new Electronic payment service called the
SBIDirect; this facility brings all the operations and transactions of the bank under
the mobile banking facility. According to State Bank of India, this facility allows its
customers access to their accounts any time and provides all the banking facilities
with more facilities being added, available to its customers any time of the day (State
Bank of India, 2012).
In India, most of the leading banks provide internet banking facilities. In the country,
there are forty two banks and the sector is lead by National Microfinance bank but
ICICI is currently leading in the field of IT enabled banking services (India today,
2012).
However, even with the increase in popularity of Electronic payment, one can still
witness long queues of customers in banks across the country. The national
Microfinance bank had also recently launched a service called Moneyfaster which
gives the facility to customer to transfer money even without having an ATM card or
account with the bank, anywhere across the country (www.burundi-agnews.org,
2011).
In the banking industry, use of information technology can be classified into two
different areas, interaction and access and secondly the business operations
development. Information technology assists in the enhancement of complex
products, superior industry facilities, and the provision of dependable methods for
monitoring risks and helps the financial institutions to expand their reach to places
that were previously out of reach for them due to their geographical locations and
huge and competitive markets.
According to InfoDev, an E-payment solutions company, Electronic payment has not
been able to attain success in Latin American and India. Part of the reasons for this
can be attributed to the fact, that making e-payment options available to poor
consumers requires handling a range of issues like availability of technology, access
to internet, operational losses, alliances and lack of channels to provide services and
government regulations as well (India today, 2012).
Electronic payment is a crucial component of electronic commerce. However,
Electronic payment can be termed as the backbone of electronic commerce (Dixit,
A.A, 2003). Electronic commerce can be described as any kind of commercial
transactions that comprise of exchange of information on the internet. Organizations
engaged in e-commerce exchange information related to their business through
different means of electronic mediums like internet, telephones and other information
facilities. Electronic payment thus can be seen as a part of electronic commerce that
offers products and services like account information, payment options, transfer of
funds and opening and closing of accounts and other banking services (Berger, Allen
N, 2003).
Internet facilities better utilization of information and different pillars of business like
consumers, manufacturers, suppliers, organizations to have access to information
regarding their business activities any time they need it. The focus of these internet
based facilities is to reduce costs in businesses. Through the means of internet and
e-payment options businesses can generate saving in the form of lesser overheads,
achieving lesser cost of producing through economies of scale and also an increase
in competence (Dixit, A.A, 2003).
Most prominent feature of Electronic payment is provision of information in a timely
manner and without any hassles at a cheaper price (Corrocher, Nicoletta, 2002).
With the continuous advancement in information technology fields there has been an
increase in expectation of customer with respect to services and products offered to
them through internet based services. These expectations revolve on secure, fast
and reliable delivery of services or products. With the confidence and trust in the
internet based services growing across the world it has become easier for
organizations to provide faster and reliable delivery of offerings, but challenges still
linger in the form of costs involved and the apparent risks.
Internet has brought forward a new concept of time that revolves around twenty four
hours availability of services. This time concept has been initiated with the
requirement of quick and instant response to queries and request at any time of the
day. This has brought an added challenge for organizations to align themselves to
the reality that financial transactions can be done any time and information access is
available 24*7. This has made the customer immensely powerful with respect to
control over information. Growth of internet has also changed the marketing field and
organizations are increasingly getting aware of the power of internet in promoting
their products and services. Banks too are not left behind and want to cash on the
potential of the internet in attracting customers towards them and gain competitive
edge. This has put forward the need of a strategy that deals with e-payment
effectively. Part of this strategy is based on providing customer satisfaction in the
channels of internet and information based services (issuu.com, 2011). These
strategies aim at resolving the issues related to providing effective and satisfactory
services to customers by implementing quality softwares and hardware.
Internet banking presents one of the most crucial challenges in the form of the
security risks that are involved with them. The facility of easy access to data and
information also exposes the information to risks that can apparently lead to transfer
of information into wrong hands. One of the tactics that institutions often employ is to
reduce the number of intermediates that have access to data. However, this cutting
down of intermediates also decreases the number of security options that they might
provide (Yabi, I, 1997).
Another risk is the exposure of data from smaller groups of users to millions of users
worldwide. These present challenges for the software providers to install the security
features to prevent the misuse of information and denying information to wrong
person. Other challenges are in the form of inadequate resources for implementation
and smooth supply of Electronic payment facilities. Power supply in India is a crucial
issue that poses as a major challenge to the banking (Dixit, 2000). Moreover, the
availability of internet services across various regions in India is also a major issue
that affects the prospects of Electronic payment in the country.

LITERATURE REVIEW

The enhancement of information and communication technology has opened new

fields for development of business new models. These models have created new
opportunities for the financial sector to reduce their cost and facilitate more
convenience for customers. When a new technology is introduced in the financial
sector it also results in expediency and quick accessibility for the customers (Devlin,
1995). Technology is a major factor which is transforming the financial sector. The
development in the technology concerned with information has increased the
convenience of the investors to keep a close watch on the working of the
organizations, thereby increasing symmetric information (Norton 1992 and Mishkin
and Strahan 1999). The banking institutions that have not upgraded their technology
from time to time have lost their market share by a considerable amount to other
financial institutions. With the advancement of technology, the data could be
transferred from one country to the other within a short period of time. Thus, it is
becoming vital for successful banking because the work of the banks is more of
informational in nature (Bradley and Steward, 2002). Berger (2003) in his study has
found out that there has been transformations in the functioning of banking sector
due to the development of technology based financial expertise and communication
technology. The results that new technology has created should be noticed through
fundamentally varying financial sector (Suoranta and Mattila, 2003).
There has been a considerable growth in E-payment since the 90s when the use of
technology in banks was gaining widespread growth. Subsequently, it has generated
curiosity in experts, regarding the attitude of customers towards opting for
 technology or refraining from it. Generally, the literature available on Internet banking
revolves around on why the people are accepting or rejecting E-payment.
Davis (1989) was the creator of Technology Adoption Model which has been the
groundwork for many other research works on technology embracement and
distribution. In his technology acceptance model (TAM), he described that individual
thinking about the convenience and the effortlessness regarding the use of
technology results in its ultimate use. Perceived usefulness or PU states that the
person’s mindset of using E-payment will increase his/ her effectiveness in the
work. Perceived Ease of Use or PEU is discernment of the user that using E-
payment will be convenient and easy (Davis, 1989). Perceived usefulness and
Perceived ease of are factors that act as a link between external factors that
comprise of training and technology and decisions to use and adopt. Perceived
usefulness is subjective of perceived ease of use; it states that a technology that is
easy to use is accepted by everyone without difficulty. Technology adoption Model
suggests that influence of perceived ease of use on intention to use is only in its
initial stages. In the long run, when the knowledge of the consumer increase its
influence will not be direct and the model will operate through perceived
usefulness (Venkatesh et al., 2003).
However, Lee (2003) states that the very common and practical technology
acceptance model suffers from deficit in providing adequate guidance to
researchers. In spite of having an estimating power, it is not been able to provide
orderly assistance to scientists on how they can manipulate the mindset of people,
so that they can adopt e-payment. According to Lee et al (2003) there should be also
be stress on factors that make technology ease to operate. Current literature suffers
from the drawback that it does not facilitate a deeper insight on how consumers
review that E-commerce will be helpful. In addition, vigorous and theory based study
on this factor or intervention is absent in E-payment literature. Venkatesh and Bala
(2008) have added to the technology adoption model and categorized the
interventions into two elements:
 Pre-implementations
 Post-implementations

THE ENTRY OF INDIAN BANKS INTO ELECTRONIC PAYMENTS

Electronic payment is used as a new way for banking operations and also as an
instrument for the growth of a particular sector. E-payment is commonly used among
all the countries of the world and it is now popularly practiced in India now days.
Despite having a slow economy in India, E-payment has initiated a new era of
banking in the country (Khan, 2001).
About 6 percent of the people living in India are availing proper banking facility. The
population of India is about 40 million and out of that 39 million people does not have
a bank account, as major part of the population is living below the poverty line and
also the large percentages of the people get less than 0.9 dollars a day for fulfilling
their basic needs. In India, financial sector is regarded as not so good field to invest
in, as there is no profit for the companies like micro financial agencies which are
dealing with e-payment (Boex, J. and Martinez-Vazquez, J. 2006). In India, the
persons who operate their accounts through banks are approaching to about 3.5
million, marketing expert analyze this to be such large that even the non user are
now attracted in getting themselves a mobile banking service.
The increase in the adoption of e-payment is increasing at a rapid pace such that the
countries neighboring to India has nearly 7.5 million users of e-payment facility. The
simple reason behind the e-payment failure in India was because the marketing
strategies in India have failed and the main reason behind this was concerned to be
the societal factors, civilizing factors and topography factors. Thus, these factors are
critical as to why the telecommunication in India is weak. There are three companies
which provide internet banking through cell phones is Reliance Net Connect,
Docomo, and MTS Blaze. Reliance Net Connect has about 47 percent of the market
share in the telecommunication industry and deals with 13 million dollars from its 9.5
million consumers.
Electronic payment is that is that technique which came into India in 1950. From that
time the e-commerce and other industry has seen a lot of growth in all the sectors.
The industry of India was controlled by the five banks which came together with the
merger and acquisition out of the total 90 banks which were present in India. In India
the several branches of each bank plays an important role. There are as much as 90
banks and their branches accounts for 3020. All the industries that were present in
this economy have to face several challenges like that of money laundering and
frauds. The lack of people’s confidence and the deficiency of investment capital and
the poor quality of the product is one of the other factors that are very crucial in India.
To solve these problems and issues the Reserve bank of India have came up with
the solution that the amount of the banks should be reduced and the banks that are
present should be stronger so that they are not affected by the depression or
recession in the economy and the bank that are present there should be reliable
such that they will not cheat the people of India. Thus, the Reserve bank of India
should have such guidelines which protect the welfare of the people and also strict
rule should be enforced by them. Out of the 90 banks that were available in India
only 25 banks are reputed which have better services and other banks are such
which only motive is to fraud the people of India and these banks provide better
services to their customers and work for the welfare of the people.
The work of the banks has been transformed from manual to the computerized
system for doing the transactions. In India previously when the computer was not
into existence at that time employees of the Union Bank of India does their
transaction in the big registers and dual entry system was used in doing the
transactions so that at the end of the year the balance sheet gets matched and the
ledgers were used for doing the transactions. But today when the new technologies
are available then the people can do the transactions from any bank whether he/she
have an account in that bank or not. Suppose if a person has its account in any
branch of the Union Bank of India then in that case the customer of this bank can
take out the money from any of the branch and can deposit its money to any branch
of the Union Bank of India. Thus, in the year 1999 with the development of
technology the people can do their transaction with the help of e-payment. The
people can do the transaction with the help of e-payment and the people do not have
to stand in line for doing the transactions.

RESEARCH METHODOLOGY

INTRODUCTION

In this part of the research, the researcher has used certain process and method to
collect important information. It has all the vital information to explain the population
used in the study like, method of sampling, range of samples, supply of data,
techniques to gather data, procedure of scrutinizing and the last is testing the
hypothesis. Following two types of research are employed in the study:
Quantitative Research
Qualitative Research

Quantitative Research

A quantitative research paradigm is an empirical study of any issue through

statistical and numerical methods. The main objective of a quantitative research is to
utilize mathematical and statistical measures and techniques to research and study
the issue. Computation and measurement forms the core of the quantitative research
as they associate the empirical investigation with the quantitative representation.
Quantitative data is the data which is in the form of numbers, figures and statistics.
In quantitative research data is collected in numerical or statistical from the
participants of the research on the in subject of research. The data is analyzed
through statistical methods and techniques.
A major feature of quantitative research is that mathematical figures present an
impartial results and the collected information and results of the research can be
applied on broader context.
In this study quantitative research paradigm has been employed in order to obtain
and study statistics pertaining to use and acceptance of the Electronic payment in
the Union Bank of India. These statistical modeling of the collected data gave
important insights into many aspects of acceptance of Electronic payment. The
figures about the qualification of employees, the training on IT and their professional
degrees, satisfaction of employees with the training and statistics relating to number
of people comfortable with technology etc were analyzed to derive findings about
factors that can influence the implementation of Electronic payment system.

Qualitative Research

The quantitative as well as the qualitative research paradigms has been employed in
the project. The quantitative research in to the issue has highlighted the actual
statistics about aspects of Electronic payment in the Union Bank of India and has
shown the behavior and attitude of the customers and employees through figures
and statistics.
Electronic payment is connected to human behavior as acceptance of the technology
is closely linked to ease of use that one feels when working through a new
technology. The ease of use and effortlessness depends on the qualification, ability
and awareness but also on many behavioral barriers that provide resistance when
an individual is introduced to a new technology. The view of people about the
introduction of technology therefore has to be studied in order to get a clear picture
about the prospects for implementation.
Qualitative research provides a deep insight into the behavior of people towards any
process and activity and the reasons that forces this kind of attitude.
Hence, Qualitative research helps to understand the reasons behind these issues
and has been also been conducted in this project.