Perceptual Digital Gaps in Generations between Adoption and Usage of Different Modes of Payment in Digital Economy

Abstract

The Mobile payment revolution has led to 55% increase in digital payments in India in the past one year. Currently there are 10 million locations that accept digital payments in the country. Though, internet connectivity, digital literacy and perceptual gaps in generations have proved to be the major hurdles for service providers to capture the full market potential for digital payments. This study holistically approaches the topic by critically analyzing the data collected from different strata based on age groups. It was observed that all the generations are readily adopting digital payments whereas there is still a perceptual gap that exist in the regular usage of mobile payments among the elderly and the young generations. Data analysis also reveals that mobile payments are mostly used for the low value purchase by the customers in comparison to the high value purchase as there is high risk and high channel cost associated with mobile transactions and also government regulations do not support very high value transactions. Another trend observed was Impulsive purchase behavior in customers (especially millennial) using mobile payments as these purchases are unplanned, unintentional and unthoughtful. These facts can be used as an input by the Government departments and the financial service providers to design strategies to bring convenience in the adoption and usage of digital transactions, to bridge the gap in the adoption of digital payments between young and old generations.