Adoption of Digital Payment Tools in India
A User Research Case Study
My Role
Literature Research
User Studies
Interviews & Surveys
Analysis
Team Size
2
Timeline
3 Months
India: A cash heavy economy
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The major reason for usage of cash is to deal with black money to buy or sell things.
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A survey study depicted that usage of cash increased once new currency came back in the market.
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According to the survey conducted by Krishnan and Siegel in Mumbai’s slum over 200 families post demonetisation, the data reports that large number of families (about 80%) were familiar with the usage of digital payment tools, however only a few of them ( about 12%) knew a merchant in their neighborhood who has adopted the new cashless payment tools.
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According to the annual report of RBI, currency to GDP ratio increased to 12%, that is equivalent to the pre-demonetisation ratio.
External shifts: COVID and Demonetization
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Reason people switched to digital mode of payment post-demonetisation:
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Convenience in making payment
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Brand Loyalty
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Usefulness.
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The crucial and challenging issues faced by people is the security and privacy concerns in making online payment.
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An online questionnaire study conducted on 318 participants gathered the insights of use of e-wallets by the users during Covid19.
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E-wallets were encouraged to make contactless payments.
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Helped in avoiding traditional banks and atms
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Created a positive attitude for the adoption and usage of digital payment tools.
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NBFC to the rescue
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NBFC, or Non Banking Financial Company is a company engaged in the following businesses:
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Loans and advances,
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Acquisition of stocks/bonds/debentures/securities
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NBFCs vs Traditional Banks:
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Bank can accept demand deposits but NBFC cannot
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NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on it
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Deposit insurance facility not available in NBFCs
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What are adopters’ experiences during the adoption of NBFCs and the effects in their lives due to the transition?
Target Audience
Users of NBFC apps of the age 24 and above in NCR
Our Study
To understand the experiences of users of Non-Banking Financial Companies (NBFCs), we adopted a mix of qualitative and quantitative methods for triangulation. We administered a survey, followed by semi-structured interviews and a thematic analysis of NBFC applications. In the following sections, we elaborate on each method used, its aim, and its analysis.
SURVEY
We conducted a survey to understand the trends in the use of NBFCs by people of the National Capital Region or NCR in India. We primarily wanted to understand whether the adoption of NBFCs is relevant to the timeline of demonetization or COVID. We also inquired about general user experiences while using such applications. The applications we questioned participants about were the same ones we used later for our thematic analysis of user reviews.
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Our survey was administered in two forms. The first was an online survey administered through snowballing, that allowed us to reach a variety of people. This was essential for our study to understand whether people of different socio-economic backgrounds have different adoption patterns. We also administered a pen and paper-based survey. This medium was chosen to target the lack of representation due to snowballing. Hence, we administered our survey in various marketplaces across Delhi where we engaged in purposive sampling, targeting shopkeepers, using a pen-and-paper survey.
Before administering our main survey, we conducted two pilot studies to validate our direction of exploration and refine our questions for a better quality of inquiry. The first pilot study confirmed our understanding of the relationship between the use of NBFCs and demonetization. We refined our survey to incorporate participant suggested changes and administered a second study. We underwent a similar process of refining before administering our main survey.
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Our analysis began with retaining relevant data points from our survey and responses from users residing outside NCR were removed.
Our primary takeaway from the survey was the highest adoption rate between 2016 and 2020 in comparison to before 2016 and after 2020. This can be an indicator that demonetization and COVID resulted in the popularity of NBFC applications. This hike in adoption may also be because of the relative popularity of such applications. We also noticed a higher usage from our offline survey as compared to the online survey, indicating that shopowners tend to use these services more on a daily basis, perhaps due to shifts in the way, they are paid regularly. Other than this, we were not able to draw out any insights as we expected to.
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No correlation between income and frequency, and pattern of adoption
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Even occupation should have asked sectors instead to move towards pattern identification
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Frequency of usage did not result in any findings
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Were not able to categorise socioeconomic status: Socioeconomic status does not only depend on income but also on social status, occupation and education, and we did not consider education
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Experience should have been asked subjectively
Method
Analysis
What we were not able to see
USER INTERVIEWS
In order to understand the experiences of people who adopted NBFCc, we conducted 10 semi-structured interviews to understand the various perspectives while adopting these tools. Our aim with the interviews was to understand the widest range of perspectives around the use and adoption of NBFC. This required us to reach out to a demographic that varied in its duration and frequency of usage of NBFCs, and socioeconomic status.
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We chose Maximum Variation Purposive Sampling to cater to our need for diversity in perspectives. Our sample for our interviews was informed from our survey. We chose 5 professions from the survey respondents that covered the most ground in terms of diversity in socioeconomic status-
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Street vendors
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Shopkeepers
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Students
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Middle class working professionals
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Upper middle class audience
From these, we aimed to reach out to participants to ensure diversity in the duration and frequency of use of NBFCs. To do this, we clubbed a few categories to form professions and added a category to ensure a wide range of perspectives. ​Some of the respondents were the same as our survey, and some were new to the study.
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Method
Service Provider
Shop Keeper
Street Vendors
Working Professionals & Students
Analysis
Word Cloud with Interview Tags
From the audio recordings of the interviews, we took notes which were then open-coded line by line. From the multiple emerging themes, we identified 5 major themes related to experiences of users. In the next few sections, we dive into the details of each theme.
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PREFERENCE FOR CASH
We observed that a majority of the population prefers cash. While some had no preference, they still chose the mode of payment accepted around them like using cash when shopkeepers used cash payments. Some interesting quotes we found relevant to our observation are
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ADOPTION
Timeline
Most users started using NBFC applications post demonetization itself. Post covid users did not feel a need to use these tools before, and even now do not rely on them entirely. We noticed that vendors adopted these tools due to reasons like usage of tools in shops, and mostly it was due to a general change in the trend of payments. Some late adopters even started using smartphones just so that they could use NBFC apps for payment purposes. Some interesting quotes we found relevant to our observation are
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Ease of onboarding
Convenience in starting accounts on these apps, easily able to access documents needed, and uncomplicated procedures were plus factors for adopters. Some interesting quotes we found relevant to our observation are
USE OF PLATFORM
Learning the platform
A majority took external assistance from close circles (friends and family) in using the platforms. Self-exploration also played an important role in helping them understand different features available on the platform and gain trust in it too. Some interesting quotes we found relevant to our observation are-
Features used
The use of these tools was for similar reasons as found in the thematic analysis of applications- money transfer, using the bank, UPI, bill payments, recharge. There were also similar instances of facing transaction failure as found in the app reviews. Some interesting quotes we found relevant to our observation are-
Feature Appreciation
Users appreciated the basic functionality and various features of the platform and extended their appreciation to new features/hardware. Paying to family, cashback, convenience were some factors on which users appreciated the services. In addition to these, users had opinions on NBFC apps on safety and similarity of applications. Some interesting quotes we found relevant to our observation are-
FRAUD
Almost all participants were aware of incidents of fraud, some merchants had also suffered due to fraud. However, this never affected their experiences or made them move away from using these tools- their own experiences were more important for them to form opinions over other stories. Their trust in the platforms increased with usage. Some interesting quotes we found relevant to our observation are-
POLITICAL AND SOCIAL INFLUENCE
Interviewees expressed political opinions on digital transactions, indicating these were reasons why they even started using these tools in the first place, and a participant even criticized the role of the government in forwarding the agenda of promoting the apps and the bad experience that comes with their use. None of the users cited demonetization or covid as direct reasons for adoption, but most pointed out a general shift to these tools as their reason for adoption. This points to a societal shift towards NBFC apps as a guiding factor for most people for adoption. Digital Literacy was also a concern for some as they pointed out this as a reason for their inability to use the platform to the best of their abilities. Some interesting quotes we found relevant to our observation are-
APPLICATION REVIEW
To understand people’s opinions and experiences of using digital payment tools, we conducted a qualitative analysis of digital payment app reviews to gain insights into their experience. For our selection process, we searched the Top Charts for the category ‘Finance’ on iOS App Store and Android Play Store on smartphones in India on March 14, 2022, founded before 2018. Since both platforms had the same applications as the top 10, we chose these as our final applications for analysis. We shortlisted the top 10 applications from each platform
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We conducted a thematic analysis of 500 app reviews. For each application selected, half the reviews were taken from App Store and half from Play store applications on smartphones. We sorted the reviews by relevance for Play Store and by most recent on App Store. The top 10 user reviews for each star rating (1 to 5) were selected, sampling a total of 50 reviews per app. If there were a shortage of reviews for any rating for an application on either platform, we compensated for it by taking more reviews from the other platform. Since the reviews could not be directly copied as text from phone applications, we took screenshots of each review and extracted the text through code. We removed all personally identifiable information from the reviews and then analysed the reviews using open coding. Both authors independently coded all reviews and then reviewed the codes over a series of discussions. The open-source tool Taguette was used for coding the reviews.
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Method
Analysis
Word Cloud with App Review Tags
On combining codes, we were able to identity 3 major emerging themes from our analysis of user reviews of NBFC apps. The following sections detail on the same.
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​EXPERIENCE WITH PLATFORM
This encompasses sub-themes that describe the usage of the platforms for various purposes like purchases, payment of bills, and recharge of mobile devices. It describes the good and bad experiences of the app users, descriptions of various features they appreciated, and poor experiences they faced. As a major sub-theme, technical issues like payment processing errors have also been identified. Various technical issues caused many issues- multiple payments, loss of trust, and essential payments missed. Some interesting quotes we found relevant to our observation are-
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​EXPERIENCE WITH CUSTOMER SUPPORT​
This theme deals with user experiences with the human element of the brand. Users tend to interact with customer support to seek help, and if not satisfied, they take to platforms like App store and Play Store to capture the attention of customer executives or even developers. Customer support may also interact with users in ways like calling and reaching out to them, however users may have mixed responses to these depending on the tone of the employees. On other occasions, users also mention their good experience with executives and take the time to appreciate them. Some interesting quotes we found relevant to our observation are-
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​CUSTOMER ASPIRATIONS​
​This theme deals with the aspirations of customers for their overall experience. Users do not shy away from suggesting desired features to developers. Preference for alternatives and Customer frustration help us understand situations that cause distress to users, signaling what they desire in their app experiences. Some interesting quotes we found relevant to our observation are-
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Through our research, we learned a few things about our topic of interest, potential future explorations, and qualitative research in general-
About our topic-
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Present-day shift to NBFC applications is a general trend- As we ventured into this research, we started with the notion that demonetization and COVID pushed consumers towards a digital economy. However, this was not an insight we were able to draw from our qualitative study. We instead learned that due to a larger societal shift towards digital payment methods, people are motivated to adopt this as well.
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The penetration of these apps into the lives of users- Despite being a cash-heavy economy, and user preferences being cash while handling payments, we noticed the penetration of digital mediums of payments in the lives of users. Daily payments, bills, and mobile recharge- matters of daily usage- are all handled through a digital medium rather than cash. Many consumers also appreciated such features of being able to pay of their bills easily through provided features on platforms.
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Digital literacy vs the will to explore- With extremely low levels of digital literacy in India, lack of digital literacy appeared as a sub-theme during our interview. However, so did individuals’ will to explore the platform to overcome this shortcoming. This was a very interesting insight for us and we feel a study into this can have important implications for UI design while designing for audiences with low levels of digital literacy.
About qualitative research-
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How to deal with unexpected results- We expected more insights from our survey, however, were at a roadblock when it gave us only the bare minimum. Through this failure, we were able to learn how to design our next few steps in such a way that we made up for the unexpected results of our survey. This also trained our minds to expect and be ready for future challenges in the study.
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Conducting qualitative research in the face of rejections- Our interviews were the most challenging part of our study. Not only was it tough to get our participants to open up and discuss money-related issues, but also primarily agree to talk to us at all. Our audience was not accustomed to individuals interviewing them so it was a task to understand how to gain their trust. Moreover, it took a lot of willpower to keep going despite facing 10 rejections in a day. This study gave us a glimpse of how difficult it can be to tackle qualitative research on sensitive topics.
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