E-Payments – Enabling India towards Becoming Less Cash Economy

Abstract

An efficient payment system enables to increase the liquidity in the system or economy. An efficient system of payment not only ensure the appropriate utilization of resources but also enables to reduce the threat of systemic risk. There is significant pace of shift towards the electronic payment or digital payments. India’s strong cash based economy has started moving towards becoming cashless economy. Through RBI and Government of India initiatives, it is expected that the digital footprints grow to 500 million users by 2020. This paper focuses on different electronic or digital payment options available to Indian users and their usage in day to day life. By using factor analysis and applying KMO Barlett test, the data collected from 100 respondents was analysed. This study revealed that the two significant factors, incentives and risk free transactions, influences the Indian people to transact digitally. This research provides a theoretical foundation for academics and guidelines for service providers and Government in dealing with e-payment systems.