Digitalization and the phenomenal rise in mobile users has brought revolution in consumer's transactions. Mobile payments are convenient, easy to operate and do not have any hassles in terms of money and time. COVID-19 gave a huge jolt to the economy but catalysed the growth of mobile payments. There had been a phenomenal increase in mobile payment through wallets in last five years. Further, the momentum for UPI based real time payments is also building up. This study analysed mobile payment service adoption model in India by using the TAM model and added attitude as a new construct in the backdrop of COVID-19 pandemic. The empirical results of the study suggest that trust, perceived utility and perceived ease of use were major factors that affected consumer's intention of mobile payment acceptance.
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COVID-19 Pandemic had accelerated the digital way of life in every possible manner. Demonetization declared in India on 8th November’16, made consumers orient towards digital payments. Digital payments in India have reached a figure of 53 billion in 2021, a significant rise from 20.7 billion in 2018 (Statista, 2021). Digital wallet companies also rose by 271 percent to a figure of US $ 2.8 billion by February 2020. Study conducted by YouGov and ACI Worldwide revealed interesting facts about accelerated digital adoption by consumers. 41% of the respondents preferred digital payment method and 50% of these were in the age group of 25-34 years. Whereas respondents over the age group of 45 years continue to divide their payment preferences between card payments and digital payments equally (35% and 33% respectively). Around one-fifty (19%) of these respondents used digital payments for purchases of Rs 10,000 to Rs 50,000 in the festive season of 2021 in line with 21% of 2020. Only 4% made purchases exceeding Rs. 50,000 the same as last year.57 per cent continue to use digital payments for groceries and essentials that remained the most common category for digital payment purchases (Apparel 48%, Electronics 47%, household appliances 43% & homewares 41%). Failed transactions (41%), data privacy (34%) & poor internet connectivity (30%) were major consumer concerns for using digital payments and only 14% did not have any concerns. 69% felt digital payments offer greater financial transparency (better insights into how, when and what money is spent on) compared to other payment methods, and offer better promotions, incentives or cashback than any other payment methods. (NASDAQ: ACIW) 2021
Many digital payment services like the Aadhaar Payment app, the UPI app and the Bharat Bill Payment app were also strongly supported by the Indian government and private sector firms such as Paytm, Google Payment or Phone Pe (NPCI). These technical innovations are surely impacting consumer behaviour. With more consumers adopting digital mode of payments, the digital payment infrastructure will focus more on more functional features such as data privacy, authentication, etc. It is predicted that the user base for smart phones will reach 829 million by 2022 with a CAGR of 15.5%. Mc Kinsey study of 2021 predicted that by 2025, mobile payment users will surpass Rs 2 billion. Hence, the focus of mobile payment firms is shifting towards developing customer-centric, contextualized and inclusive payment experience for masses. As per RBI, mobile app-based transactions registered a 96% growth in volume while its value witnessed over 104% jump from Q1 2020 in India. (Reserve Bank of India Bulletin). Consumers and marketers are exploring multiple possibilities with mobile payments. Mobile wallet providers are trying to enhance consumer value propositions in terms of merchant-payment capabilities. India has evolved majorly in the last two decades; features phones were limited to USSD (Unstructured Supplementary Services) but now the internet penetration has given access to payment technologies. Further, these mobile payment players are deploying terminals for process-based payments using Aadhaar, biometrics for peer-to-peer transfer to camera enabled, QR code scanning and voice banking. QR-code based wallet is gaining popularity among merchants due to low set up costs. For example, Paytm QR has become ubiquitous to cash in India and is visible across majority of retail stores, hotels, small merchants, etc.
COVID-19 resulted into a new breed of contactless consumers who shifted from cash to various mode of digital payments such as mobile wallets, account to account transfer, QR based solution, card linked to mobile solution (Google pay / Apple Pay). According to Asia Payment Protection Survey (APPS) conducted by Mc Kinsey in 13 Asian markets; the strategic perspectives of Asia’s payment industry was built around “Five C’s”- contactless consumers, connected consumers, cross border linkages, consolidation of the industry and cashless economy. These five “Cs” will increase market complexity and mobile wallet players will not only have to enhance merchant payment capabilities but also enhance more valuable propositions for consumers. COVID-19 pandemic had revolutionized the mode of consumer & marketer interaction. Thus, cashless economy will try to consolidate industry structure with respect to policies and regulations of different countries.