The Impact of Demonetization on Digital Payment Transactions: A Statistical Study

Abstract

Digital payments or e-payments are a way through which, a payer and payee can made payments electronically. Here, both payer and payee make use of digital modes to perform any sort of transactions. Digitalization of the economy leads to transparency, accuracy, reliability and security for the Users, Consumers and the Economy. A cashless economy is the one in which large number of population use the digital methods of transactions for making and receiving payments. Through cashless methods of transacting in the economy, anyone can transfer money from one point to another point easily and conveniently without any loss of extra energy and efforts, as these methods are fast and efficient. Variety of Digital payments methods are available these days that include UPI apps, AEPS, cards, E-wallets, Internet banking, NEFT, RTGS, mobile transactions and many other. The Digital India Programme by Government of India was initiated with the vision to transform the country into digitally emancipate and cultivated society. Since then it started rising but the substantial increase in digital payments were found after demonetization. The e-payments have started building the momentum and showed notable increase. The paper focuses on the comparison among various digital payment options and it also tries to project the light over the need and importance of digitalized economy in terms of financial transactions and helps to change the rationale of the citizens of the country towards various different modes of cashless transactions especially after the demonetization took place in the economy in the year 2016. It also attempt to analyze the digital payment transactions in terms of NEFT, RTGS and Mobile transactions using paired sample t-test. The analysis was undertaken using IBM SPSS 21 on past 30 months of data starting from September 2015 to February 2018, taken from Reserve Bank of India.