Financial Engineering
E-ISSN: 2945-1140
Volume 2, 2024
The Size of Transactions, Types of Products, and the Choice Between
Electronic Payments and Cash Usage
Author:
Abstract: Fueled by recent policy advancements and technological progress, India’s digital payment system is on the
verge of becoming a noteworthy success story. Concurrently, data also highlights the continued reliance on cash. While
broad national-level data can provide insights into overall citizen preferences, we utilize a survey-based data-set to gain
insight into how factors such as ’transaction size,’ ’nature of the product,’ ’consumer perception,’ ’trust’ in digital
payments, and the costs associated with digital transactions influence consumer payment behavior. While demographic
factors like age and income play a role in these choices, we discover compelling evidence that an individual’s choice of
digital payment methods is strongly shaped by their perception of these options, transaction size, trust, associated costs,
and the product category. Notably, we observe that as transaction size increases, the use of digital payment methods tends
to decrease.
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Pages: 227-232
DOI: 10.37394/232032.2024.2.21