Lower Transaction Levels of Rupay Debit Card in Maharastra and Odisha

OBJECTIVE

1.  To carry out a market research to identify the reasons behind lower transaction levels of Rupay debit card in Maharastra and Odisha.
2. To understand the cash and card usage behaviour of the consumers and how it affects the transaction levels of Rupay Card.
3. To study the awareness of bank customers about debit cards and the attitude of card holders towards Rupay Debit cards.
4. Develop strategies to increase Rupay card transactions in the target states.

SCOPE OF THE STUDY

The scope of the study is limited to two states – Maharastra and Odisha. The study has covered 7 banks in 12 different branches across two districts –Satara and Cuttack. In Maharastra, the bank interviews and consumer survey was conducted at 8 branches of State Co-operative and Regional Rural Banks in Satara district. The merchant survey ANKITA

In Odisha, the study was conducted at four branches of State Co-operative and Regional Rural Banks in Cuttack district. The Merchant survey was conducted in Cuttack town and the Banking correspondents interview was done at Tangi, Cuttack district.

LIMITATIONS

• The study covers more than three hundred consumer survey respondents along with  40 Merchants response as well as Bank Manager interviews and Banking correspondents interview. Due to above reason, time was a constraint
• This research was conducted in the post PMJDY and Post Mudra era.

METHODOLOGY

Business Problem

Research Problem –

Hypothesis

• The Card usage, Awareness levels and Cash propensity(Low) is positively correlated with Education
• The Card usage, Awareness levels and Cash propensity (Low)is negatively correlated with Age.
• The Card usage, Awareness levels and Cash propensity(Low) is positively correlated with Income

Research Design-

Research Methodology

DATA SOURCES

4.1        Primary Sources of Data Collection

1. Consumer Survey

           Individual consumer surveys were conducted in order to collect data on cash and card behaviour, awareness levels of Rupay features, transaction patterns, and infrastructure connectivity. The questionnaire used for survey is attached in the annexure.

1. Semi Structured Interviews

Semi interviews were conducted with Bank managers and Banking Correspondents to identify the barriers at consumer as well as bank level.

1. Focus Group Discussions

            FGDs were conducted with the consumers as well as Bank staff at different branches                                                                          to understand the key problems areas with Rupay Debit card and major concerns of   consumers.

1. Merchant Survey

           The merchants who use POS terminals for payments were covered to understand Point of sale behaviour of consumers as well as merchants.

4.2         Secondary Sources

For detailed information about the secondary sources were used. The major sources of   secondary data are given below:

• Banks
• ATM and POS Transaction data
• Merchant Bank statements
• Customer records at Bank Branches.
• Head office

5. SAMPLING PLAN

The sample size for consumer’s survey was 304 and 40 for merchant’s survey. The sampling method followed was Multi stage sampling. In the first stage, based on purposive sampling only co-operative and rural banks were selected for study since the transactions levels were quite low for these banks. In the second stage, convenience sampling was used to select the respondents as the number of customers visiting a bank is limited. The Mechants were selected based on convenience sampling.

Introduction

About NPCI

National Payments Corporation of India (NPCI) is an umbrella organization for all retail payments system in India. It was set up with the guidance and support of the Reserve Bank of India (RBI) and Indian Banks’ Association (IBA).

The RBI, after setting up the Board for Regulation and Supervision of Payment and Settlement Systems (BPSS) in 2005, released a vision document incorporating a proposal to set up an umbrella institution for all the RETAIL PAYMENT SYSTEMS in the country. The core objective was to consolidate and integrate the multiple systems with varying service levels into nation-wide uniform and standard business process for all retail payment systems. The other objective was to facilitate an affordable payment mechanism to benefit the common man across the country and help financial inclusion.