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COMPREHENSIVE PROJECT REPORT ON A Study of Usage & Security of the Mobile Payments Services in India SUBMITTED TO

PARUL INSTITUTE OF MANAGEMENT AND RESEARCH Submitted in partial fulfillment of the requirement for the Award of the degree of

MASTER OF BUSINESS ADMINISTRATION BATCH (2016-18) Submitted by Joshi Pulkit MBA Semester IV 160617200034

Shailak Jani MBA Semester IV 160617200028

Purva Karangiya MBA Semester IV 160616200015

Under the Guidance of Prof. Amita Garg (Ass. Professor)

PARUL UNIVERSITY FACULTY OF MANAGEMENT STUDIES P.O. Limda, Tal. Waghodia, District Vadodara-391760

DECLARATION We Pulkit Joshi, Shailak Jani, Purva Karangiya Enrollment No. 160617200034, 160617200028, 160616200015 From Parul Institute Of Management And Research (MBA), Semester IV Of the Parul University , Vadodara hereby declare that the Comprehensive Project entitled “A Study Of Usage & Security Of The Mobile Payments Services In India” is an original work and the same has not been submitted to any other Institute for the award of any other degree.

Date: :


Signature of the Students

I

INSTITUTE CERTIFICATE It is hereby certified that the Comprehensive Project Report entitled “A Study Of Usage & Security Of The Mobile Payments Services In India” is submitted in partial fulfillment of Master of Business Administration at Parul Institute Of Management And Research, Vadodara by Pulkit Joshi, Shailak Jani, Purva Karangiya Enrollment No. 160617200034, 160617200028, 160616200015 has been completed under my guidance and is satisfactory.

Date:


Signature of the Guide

Signature of the Director

Prof. Amita Garg

Dr. Bijal Zaveri





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ACKNOWLEDGEMENT We take immense pleasure in thanking Dr. Bijal Zaveri , Head of the Department for having permitted us to carry out this project work. We wish to express my deep sense of gratitude to our Internal Guide, Prof. Amita Garg for her guidance and useful suggestions, which helped us in completing the project work, in time. By her uncompromising demand for quality and her insistence for meeting the deadlines, she has always shown us a way to pursue excellence. Finally, yet importantly, We would like to express our heartfelt thanks to our beloved parents for their blessings, our friends/classmates for their help and wishes for the successful completion of this project.

With sincere regards,

Pulkit Joshi Shailak Jani Purva Karangiya

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PREFACE The development of the Internet and the arrival of e-commerce fostered digitalization in the payment processes by providing a variety of electronic payment options including payment cards, digital and mobile wallets, electronic cash, contactless payment methods etc. Mobile payment services with their increasing popularity are presently under the phase of transition, heading towards a promising future of tentative possibilities along with the innovation in technology. Total transaction value in the "Digital Payment" segment in India amounts to USD 2.5 billion in 2016 and is expected to show an annual growth rate of 18.36% resulting in the total amount of USD 5.5 billion in 2020.The report takes a look at various companies providing the mobile payments solutions (private & public) and different products offered by them. It also provides information regarding the various methods that are available for mobile payments solutions. However, around the world, spread of electronic banking has resulted in thousands of cybercrimes and monetary thefts by cybercriminals. The security risks related to electronic transactions through mobile payments are high due to various technological and other reasons. In order to prevent yourselves from this, it is significant that you use a secure mobile payment solution. This study focuses on evaluating the security of the mobile payments solutions. The issues faced by the users of these mobile payments system are identified in this work. These user issues are then analyzed to identify the risk associated with it, based on the RBI guidelines & BASEL norms. The research provides useful information to evaluate the security of your mobile payments solution and identify its risk level as comparison with other. This research provides a conclusion on the security level of mobile payments solutions in India in accordance with the principles.

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Executive Summary After the digitization wave hit India, there is a tremendous growth witnessed in the Mobile Payments Industry. Mobile phones, as a medium for extending banking services, have attained greater significance because of their ubiquitous nature. The rapid growth of mobile users in India, through wider coverage of mobile phone networks, have made this medium an important platform for extending banking services to every segment of banking clientele in general and the unbanked segment in particular. Besides the new entrants, the traditional players have modernised themselves with the time to give a stiff competition in the Industry. There is a constant rise in the number of customers using mobile payments services mostly due to easy access to the Internet. At such a time the security of the mobile payments services holds a great significance. The reason for conducting this study is to identify security measures implemented by the mobile payments services used & see to it whether they suffice the guidelines issued by the regulators in India. This research aims to evaluate the security of the mobile payments services, based on its practices & regulations in India. Further this research focuses on classifying/categorizing the various mobile payments services in India. The research also provides insights regarding the usage of the mobile payments services in terms of frequency, monthly usage, & purpose of using the mobile payments services. The study follows a descriptive research design. The work includes a quantitative research which identifies whether there is relationship between gender of the users & the usage of mobile payment services. It also identifies the important factors which infuences or dissuades an individual in using the mobile payments services, as well as, the most popular mobile payments services among the users. The primary data for the research is collected from 300 respondents using online surveys like surveymonkey, one to one questionnaire requests, e-mails, & social networking sites like FB. For secondary data various articles, websites, journals, & magazines were refferred. After collecting the data through a structured questionnaire, it was coded into the SPSS to perform data analysis. Independent sample t test is used to examine whether there is any significant difference in the usage of the mobile payments services of the users based on their gender. To evaluate the security, a conceptual framework is prepared based on the RBI guidelines & Basel norms. The model identifies whether the mobile payments service has the required security measures or not. The findings of the research based on data analysis suggests that all the mobile payments services have security concerns based on one or more security principles. The mobile payments services in India are categorized in four categories viz. Mobile Wallets, Appliations linking to Bank account, Bank’s Application for A/C holders, & basic USSD (*99#) service. Although emerging as the most secure type of mobile payment option, the basic USSD service is prefferred by the least number of people, while the Mobile wallets like PayTm were most popular. It was found that there was no significant difference in the usage frequency of the mobile payments services based on their gender, while there was a significant difference in the money spent monthly using the mobile payments services based on their gender.

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Table of Contents DECLARATION ................................................................................................................................... I INSTITUTE CERTIFICATE ………………………………………………………………………………………………………………… II ACKNOWLEDGEMENT.................................................................................................................... III PREFACE ………………………………………………………………………………………………………………………………. IV EXECUTIVE SUMMARY .................................................................................................................... V 1)

ABOUT THE MOBILE PAYMENTS INDUSTRY ......................................................................... 01

2)

ABOUT THE MAJOR COMPANIES IN MOBILE PAYMENT INDUSTRY.................................... 04 2.1) BANK ................................................................................................................................... 04 2.1.1) STATE BANK OF INDIA ................................................................................................. 04 2.1.2) CENTRAL BANK OF INDIA ............................................................................................ 05 2.2) PRIVATE PLAYERS ............................................................................................................... 06 2.2.1) ONE97 COMMUNICATIONS ........................................................................................ 06 2.2.2) AMAZON ...................................................................................................................... 08 2.3) PUBLIC PLAYERS ................................................................................................................. 09 2.3.1) NATIONAL PAYMENTS CORPORATION OF INDIA ....................................................... 09 2.3.2) MOBILE PAYMENT FORUM OF INDIA ......................................................................... 10

3)

MAJOR PRODUCTS ………………………………………………………………………………………………………. 11 3.1) Amazon Pay ........................................................................................................................ 11 3.2) Paytm .................................................................................................................................. 11 3.3) PhonePe ............................................................................................................................. 12 3.4) BHIM ................................................................................................................................... 12 3.5) National Unified USSD Platform(*99#) ............................................................................. 13 3.6) SBI Anywhere Personal ...................................................................................................... 14 3.7) Cent Mobile ........................................................................................................................ 15

4)

INTRODUCTION TO STUDY .................................................................................................... 16 4.1) LITERATURE REVIEW .......................................................................................................... 16 4.2) BACKGROUND OF THE STUDY ........................................................................................... 26

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4.3) PROBLEM STATEMENT/RATIONAL OF THE STUDY .......................................................... 26 4.4) OBJECTIVES OF THE STUDY ............................................................................................... 26 4.5) HYPOTHESIS ....................................................................................................................... 27 5)

RESEARCH METHODOLOGY .................................................................................................. 28 5.1) RESEARCH DESIGN ............................................................................................................ 28 5.2) SOURCES OF DATA ............................................................................................................ 29 5.3) DATA COLLECTION METHOD ........................................................................................... 29 5.4) POPULATION ..................................................................................................................... 29 5.5) SAMPLING METHOD ......................................................................................................... 29 5.6) SAMPLING FRAME……………………………………………………………………………………………………30 5.7) DATA COLLECTION INSTRUMENT ……………………………………………………………………………30

6)

DATA ANALYSIS & INTERPRETATION ………………………………………………………………………………………..31

6.1) ON CATEGORIZATION OF THE MOBILE PAYMENT SERVICES ………………………………………31 6.2) ON SECURITY OF THE MOBILE PAYMENT SERVICES ……………………………………………………32 6.3) ON USAGE OF THE MOBILE PAYMENT SERVICES ………………………………………………………..35 7) RESULTS AND FINDINGS …………………………………………………………………………………………………45 8) LIMITATIONS OF THE STUDY ………………………………………………………………………………………….48 9) CONCLUSION …………………………………………………………………………………………………………………49 REFERENCES …………………………………………………………………………………………………….………………..50 APPENDIX ……………………………………………………………………………………………………….………………….52

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A Study Of Usage & Security Of The Mobile Payments Services In India

CHAPTER - 1 About the Mobile Payments Industry India is amongst one of the most cash-intensive economies of the word with cash to GDP ratio of 12%, this figure is around three to four times than the comparable economies for similar economies like Brazil and South Africa. The ratio of the amount of money in circulation in cash compared to that of what is in the banks in about 51% in India, whereas the ratio is 8 to 9 percent for most of the countries. Total transaction value in the "Digital Payment" segment in India amounts to USD 28,961.6 million in 2016 and is expected to show an annual growth rate (CAGR 2016-2020) of 18.36% resulting in the total amount of USD 56,837.5 million in 2020. In China, it has reached USD 833,358.4 million in 2016. The “Digital Payment” market's largest segment in India is "Online B2C Commerce" with a total transaction value of USD 28,718.5 million in 2016. With the increasing sales of smart phones year after year and the average time that the users are spending online, this figure is likely to increase significantly in the coming few years. To support this growth, the online payment services are also witnessing tremendous growth trajectory. M-wallet market segment, which currently account for a minuscule part of Digital Payments includes transferring of money, banking transactions, shopping, ticketing, recharging, and bill payments is projected to grow at a CAGR of around 30% in the next five years from 2015-2019. As depicted in Fig 1.1 the highest 38% market share is captured by money transfer businesses, followed by recharge by 30% and bill payments, and utility areas by 12% while others enjoy 20% market share. Some of the major m-wallet players are Airtel Money, mRupee, Vodafone m-Pesa, Oxigen Wallet, PayTM, Mobikwik and Idea Money.

India is witnessing an exponential growth in the area of digital payment in recent times. With everincreasing internet and mobile penetration, the country is all set to witness a massive surge in the 1|Page

A Study Of Usage & Security Of The Mobile Payments Services In India adoption of digital payments in the coming years. Furthermore, flagship government initiatives such as Digital India will act as key catalysts and enablers of this transformation. At present, mobile payments form a minuscule part of the overall digital payments industry in India. However, the contribution from phones and tablets is expected to increase to 30 per cent by 2020. Mobile payments in India are estimated to grow from $86 million in 2011 to $1.15 billion in 2016, with a compounded annual growth rate (CAGR) of 68 per cent, according to estimates. The m-wallet segment includes transfer of money, services related to banking transactions, valueadded services such as shopping, ticketing, recharging, and bill payments. In this segment, the highest, 38 per cent market share is captured by money transfer businesses, followed by recharge and bill payments, and utility areas by 30 per cent and 12 per cent, respectively. The Digital Payment Systems Market in India market will witness a CAGR of 58.90% during the forecast period FY2017-FY2023. Indian payments industry is largely dominated by cash-based transactions. The banking industry in the country was majorly branch-based till 2014. Later, there was a considerable growth in the branch-less channels of banking, which has further explored into digital payments in both rural and urban regions. Indian digital payments industry is expected to reach $700 billion by 2022 in terms of value of transactions. It is expected that more than 80% of the urban population in India will adopt digital payments as a part of their routine by 2022, and 70% of the retail chains will adopt the same. The reduced transaction charges and the degree of ease of cash transfers associated with the electronic fund transfers and mobile banking will further drive the growth of digital payment systems in India. Also, the Indian Government is bringing positive policy framework such as Goods and Services Tax (GST), financial inclusion, improving digital infrastructure, launching payment systems such as aadhar enabled payments, UPI, and others which are supporting the digital payments industry. In 2016, Indian Government made a significant move, i.e. demonetization, to curb black money circulation within the country and to increase digital payment penetration. It is a phenomenal step made by India towards improving cashless economy, resulting in sharp increase of several digital payment channels in the country. The market is segmented by digital payment system types and regions. The digital payment system types include mobile wallets, internet banking, mobile banking, PoS, and others. The regions are urban and rural regions; currently, urban region segment holds the major market share followed by rural segment. Mobile Wallets; India's mobile wallet ecosystem is yet to be competitive, however major e-commerce and telecom companies are fueling this industry through business expansion. Also, a strong regulatory support is yet to come into force for the exponential growth of digital payments ecosystem in India.

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A Study Of Usage & Security Of The Mobile Payments Services In India The changing customer behavior, increasing internet penetration rate, and government policies are fueling the industry which is indirectly supported by the growing demand for P2P payments, ecommerce platforms, utility bill payments, and others. The development of digital infrastructure in India stands out by providing a strong technological ecosystem for the digital payments industry. The increasing internet penetration, changing customer behavior, and government regulations towards financial inclusion have created a positive future forecast for the Indian digital payments ecosystem. This industry is at its starting stage where users and merchants are adopting the internet facilities and gaining knowledge about digital and electronic modes of payments. The market has got a significant advantage from the government’s financial move, which has increased the competitiveness among mobile wallet providers and electronic (POS) payment mode providers.

The opportunities for digital payments sector are immense. People are adapting to cashless and internet banking environment due to the increased use of plastic money (debit cards, credit cards, virtual prepaid cards, and others), other facilities have become necessary offerings from every financial institution and there is a boom in the digital payments sector. The mobile banking is representing significant share in the digital payments industry in India. This will show a robust growth throughout the forecast period, followed by POS and internet banking transactions. From a stake sale to an acquisition to capital infusion and to ambitions of becoming an all in one platform, India’s digital payment players each had a unique tale to tell for 2017. And the reason behind this is simple. The Indian digital payments industry is projected to reach $500 Bn by 2020, contributing 15% to India’s GDP, as per a recent report by Google and Boston Consulting Group.

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A Study Of Usage & Security Of The Mobile Payments Services In India

CHAPTER - 2 About Major Companies in Mobile Payments Industry BANKS 2.1 State Bank of India State Bank of India (SBI) is an Indian multinational, public sector banking and financial services company. It is a government-owned corporation with its headquarters in Mumbai, Maharashtra. On 1st April, 2017, State Bank of India, which is India's largest Bank merged with five of its Associate Banks (State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore) and Bharatiya Mahila Bank with itself. This is the first ever large scale consolidation in the Indian Banking Industry. With the merger, State Bank of India will enter the league of top 50 global banks with a balance sheet size of ₹33 trillion, 278,000 employees, 420 million customers, and more than 24,000 branches and 59,000 ATMs. SBI's market share will increase to 22 percent from 17 per cent. It has 198 offices in 37 countries; 301 correspondents in 72 countries. The company is ranked 232nd on the Fortune Global 500 list of the world's biggest corporations as of 2016. The bank traces its ancestry to British India, through the Imperial Bank of India, to the founding, in 1806, of the Bank of Calcutta, making it the oldest commercial bank in the Indian subcontinent. Bank of Madras merged into the other two "presidency banks" in British India, Bank of Calcutta and Bank of Bombay, to form the Imperial Bank of India, which in turn became the State Bank of India in 1955. Government of India owned the Imperial Bank of India in 1955, with Reserve Bank of India (India's Central Bank) taking a 60% stake, and renamed it the State Bank of India. In 2008, the government took over the stake held by the Reserve Bank of India. State Bank of India has 20% market share in deposits and loans among Indian commercial banks. SBI provides a range of banking products through its network of branches in India and overseas,

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A Study Of Usage & Security Of The Mobile Payments Services In India including products aimed at non-resident Indians (NRIs). SBI has 14 regional hubs and 57 Zonal Offices that are located at important cities throughout India. SBI has 18,354 branches in India. In the financial year 2012–13, its revenue was ₹2.005 trillion (US$31 billion), out of which domestic operations contributed to 95.35% of revenue. Similarly, domestic operations contributed to 88.37% of total profits for the same financial year. Under the Pradhan Mantri Jan Dhan Yojana of financial inclusion launched by Government in August 2014, SBI held 11,300 camps and opened over 3 million accounts by September, which included 2.1 million accounts in rural areas and 1.57 million accounts in urban areas. As of 2014–15, the bank had 191 overseas offices spread over 36 countries having the largest presence in foreign markets among Indian banks. It has branches in Singapore, Moscow, Colombo, Dhaka, Frankfurt, Hong Kong, Tehran, Johannesburg, London, Los Angeles, the Maldives, Muscat, Dubai, New York, Osaka, Sydney, and Tokyo. It has offshore banking units in the Bahamas and Bahrain, and representative offices in Myanmar, Bhutan and Cape Town. SBI acquired the control of seven associate banks in 1960. These seven banks were State Bank of Bikaner and Jaipur (SBBJ), State Bank of Hyderabad (SBH), State Bank of Mysore (SBM), State Bank of Patiala (SBP), State Bank of Travancore (SBT), State Bank of Saurashtra (SBS) and State Bank of Indore (SBI - Indore). The State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore, and Bharatiya Mahila Bank were merged with State Bank of India with effect from 1 April 2017. SBI is one of the largest employers in the country with 209,567 employees as on 31 March 2017. Around 13,000 employees have joined the Bank in FY 2016-17. Each employee contributed a net profit of ₹511,000 (US$8,000) during FY 2016-17.

2.2 Central Bank Of India Central Bank of India is a government-owned bank. It is one of the oldest and largest commercial banks in India. It is based in Mumbai which is the financial capital of India and capital city of state of Maharashtra. The bank has 4730 branches, 5319 ATM's and 4 extension counters across 27 Indian states and three Union Territories. At present, Central Bank of India has overseas office at Nairobi, Hong Kong and a joint venture with Bank of India, Bank of Baroda, and the Zambian 5|Page

A Study Of Usage & Security Of The Mobile Payments Services In India government. The Zambian government holds 40 per cent stake and each of the banks has 20 per cent. Recently it has also opened a representative office at Nairobi in Kenya. Central bank of India is one of 20 Public Sector banks in India to get recapitalization finance from the government over the next 24 months. Central Bank of India has approached the Reserve Bank of India (RBI) for permission to open representative offices in five more locations - Singapore, Dubai, Doha and London. As on 31 March 2015, the bank's reserves and surplus stood at ₹ 283030 million. Its total business at the end of the last fiscal amounted to ₹ 45, 05,390 (approx.) million. Central Bank of India was one of the first banks in India to issue credit cards in the year 1980 in collaboration with MasterCard. Central Bank of India announces that the financial results for the year ended 2013, Total Business ₹ 402000 Cr. And Net Profit ₹ 1015 Cr.

PRIVATE PLAYERS 2.3 One 97 communications It was founded by Vijay Shekhar Sharma in August 2010.It launched is a consumer brand called Paytm, it is an acronym for "Payment Through Mobile”. The company employs over 13,000 employees as of January 2017 and has 3 million offline merchants across India. It also operates the Paytm payment gateway and the Paytm Wallet. Paytm, One97's flagship brand, is India's largest digital goods and mobile commerce platform inspired and driven by a commitment to great consumer experience. In 2015 Paytm received a license from Reserve Bank of India to start one of India's first payments banks, called "Paytm Payments Bank Limited". At the time, the bank intended to use Paytm’s existing user base for offering new services, including debit cards, savings accounts, online banking and transfers, to enable a cashless economy. The payments bank would be a separate entity in which the founder Vijay Shekhar Sharma will hold 51%, One97 Communications will hold 39% and 10% will be held by a subsidiary of One97 and Sharma. One97 delivers mobile content and commerce services to millions of mobile consumers through India’s most widely deployed telecom applications cloud platform. In May 2017 Paytm Launched Paytm Payments Bank For Paytm E-Wallet Users. Also in May 2017, Paytm was reported to be in 6|Page

A Study Of Usage & Security Of The Mobile Payments Services In India talks to pump in $30 million in Insider.in for a majority stake. In July 2017, Paytm acquired a majority stake in Insider.in, allowing its users to book events instantly. By June 2017, Paytm Mall, the recently launched online marketplace of the organization, has confirmed that it is digitizing the catalogues of more than 1,000 cars and two-wheeler dealerships to increase online usage and offline sales. In June 2017, The Economic Times reported that Paytm was seeking a license to set up a money market fund to enable its users to store cash and earn interest on it. They were awaiting an approval having already applied to India's central Reserve Bank of India to start the fund. Headquartered in New Delhi, One97 is more than 4,500 people strong with regional offices in Mumbai, Bengaluru, Pune, Chennai and Kolkata with global presence in Africa, Europe, Middle East and Southeast Asia. We are backed by marquee investors like Alibaba Group, Ant Financial (AliPay), SAIF Partners, Mediatek, Sapphire Venture and Silicon Valley Bank. One97 also invests in early stage mobile companies through the One97 Mobility Fund (OMF). One97 Communications Limited provides telecommunications value added services to telecom service providers, consumers, and enterprises in India, Afghanistan, Nigeria, and Bangladesh. It offers network component services, which include Short Message Service Centers that facilitate the delivery of SMS messages; USSD gateways that enable a subscriber to obtain information on sports results, stock quotes, and the amount of unused prepaid balance on a SIM card; and call management systems, such as pre-call announcements, call forwarding, and call block services. The company also provides customer lifecycle management services, including self-care and service provisioning portals, loyalty programs, and customer churn management services; and tollfree infolines, customer communication tools, tagged-SMS, missed-call back services, and USSD inserts. In addition, it offers marketing solutions, such as pre-call inserts and profiled post-call notifications; incomplete call announcements; and an analytics-driven customer communications platform. Further, the company provides a range of mobile content, including music-based, picture-based, text-based, and segmented content on voice and text, as well as contests, quizzes, and puzzles; applications, such as security and data backup, and social networking site for mobile phones; and commerce services to consumers through SMS, voice, and WAP.

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A Study Of Usage & Security Of The Mobile Payments Services In India

2.4 Amazon Amazon.com, Inc., doing business as Amazon, is an American electronic commerce and cloud computing company based in Seattle, Washington that was founded by Jeff Bezos on July 5, 1994. The tech giant is the largest Internet retailer in the world measured by revenue and market capitalization, and second largest after Alibaba Group in terms of total sales. The amazon.com website

started

as

an

online bookstore and

later

diversified

to

sell video downloads/streaming, MP3downloads/streaming, audiobook downloads/streaming, sof tware, video games, electronics, apparel, furniture, food, toys, and jewelry. The company also produces consumer electronics—Kindle e-readers, Fire tablets, Fire TV, and Echo—and is the world's largest provider of cloud infrastructure services (IaaS and PaaS). Amazon also sells certain low-end products like USB cables under its in-house brand Amazon Basics. Amazon has separate retail websites for the United States, the United Kingdom and Ireland, France, Canada, Germany, Italy, Spain, Netherlands, Australia, Brazil, Japan, China, India, and Mexico. In 2016, Dutch, Polish, and Turkish language versions of the German Amazon website were also launched. Amazon also offers international shipping to certain other countries for some of its products Amazon India, which has now completed four years of operations in India. Mint reported on 13 April that Amazon India had already received the RBI approval to launch its own digital wallet service in India. The PPI license from RBI allows Amazon India to launch its own digital wallet service, but it is not clear whether the company will launch a new payments service altogether or expand the nature of its existing Pay Balance service in India. Currently, about 75% of Amazon India’s new customers come from lower-tier cities, while 65% of its active customers are new users, Agarwal said. Amazon India currently sells more than 100 million products and the company is adding nearly 100,000 products on its marketplace every day, he added.

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A Study Of Usage & Security Of The Mobile Payments Services In India From entertainment to food to wallets, the ecommerce giant is leaving no stone unturned to penetrate the Indian market. Earlier this week, the company received the final nod from the government for its proposed $500 MN investment in food retail in India. Earlier this month, the US-based ecommerce giant poured in about $260 MN (INR 1,680 Cr) in Amazon Seller Services. This took the total money invested in the Indian unit to about $2.1 BN (INR 13,800 Cr).In June 2017, it launched its sixth Fulfilment Centre (FC) in Mumbai. With this new launch, it now has eight FCs in Maharashtra, with close to 2.5 MN cubic feet of storage space. In the same month, the company further fueled $32 MN (INR 207 Cr) in Amazon Transportation Services, the logistics arm of the company. As reported earlier, Amazon Pay is all set to scale up its wallet business in India by planning to enter strategic partnerships with government bodies such as electricity and insurance companies. The push to ecommerce can also help in the growth of its digital payments platform Amazon Pay. However, amidst all these speculations and capital infusions the date of launch for the digital payments is uncertain. The fast-approaching festive season will prove to be a litmus test for the ecommerce entities to decide who emerges on top.

PUBLIC PLAYERS

2.5 National Payments Corporation of India 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 9|Page

A Study Of Usage & Security Of The Mobile Payments Services In India across the country and help financial inclusion. NPCI has ten promoter banks namely, State Bank of India, Punjab National Bank, Canara Bank, Bank of Baroda, Union Bank of India, Bank of India, ICICI Bank, HDFC Bank, Citibank and HSBC. It offers following Product and Services: 1. Bharat Interface for Money (BHIM) 2. Unified Payments Interface (UPI) 3. Immediate Payment Service (IMPS) 4. *99# USSD Service 5. National Automated Clearing House (NACH) 6. Aadhaar Enabled Payment System 7. RuPay 8. Bharat Bill Payment System (BBPS)

2.6 Mobile Payment Forum of India Mobile Payment Forum of India (MPFI) has been set up with the joint initiative of the Institute for Development and Research in Banking Technology (IDRBT), Hyderabad and Rural Technology Business Incubator (RTBI), IIT Madras in 2006 with a mission to enable mobile payments and mobile financial services by everyone in digital India through secure, efficient and low cost transactions. It has following objectives: 

To provide a forum to share and discuss learnings, opportunities, and constraints (including regulatory issues) in enabling mobile payments in India.



To identify and advise the enablers for implementing mobile payment systems.



To create awareness among enablers/users through educational workshops.



To guide banks, telecom organizations, support service providers, government and others for providing mobile payments in an inter-operable and heterogeneous environment including the rural masses.



To take up commonly agreed upon initiatives on behalf of the members. 10 | P a g e

A Study Of Usage & Security Of The Mobile Payments Services In India

CHAPTER - 3 Major Products 3.1 Amazon Pay Amazon Pay is an online payments processing service that is owned by Amazon.com, Inc. Launched in 2007, Amazon Pay uses the consumer base of Amazon.com and focuses on giving users the option to pay with their Amazon accounts on external merchant websites. As of June 2017 the service is available in the U.S., France, Germany, Italy, Japan, Spain, India and the UK. Amazon Pay provides the option to purchase goods and services from websites and mobile apps using the addresses and payment methods stored in the Amazon account, such as credit cards or direct debit bank account. Amazon Pay Express is a payments processing service for simple E-commerce use cases on websites. Built on Amazon Pay but without requiring a full E-commerce integration. It uses a Java button code generator to create a button that can be copied and pasted onto a website or added via WordPress Plug-in. It is best suited for merchants selling a small number of products and with a single item in each order, such as a digital download.

3.2 PayTM Paytm is India's largest mobile payments and commerce platform. It started with online mobile recharge and bill payments and has an online marketplace today. In a short span of time, it has scaled to over 250 MN registered users. Service is available through a browser, and an app is available on the Android, Windows and iOS operating systems. Paytm is also approved as an operating unit for Bharat Bill Payment System, allowing multiple payment modes for consumers. The Paytm Wallet application enables users to book air tickets and taxis, mobile recharge, and payment of DTH, broadband and electricity bills 11 | P a g e

A Study Of Usage & Security Of The Mobile Payments Services In India among others. The money transfer feature is only available for mobile users, not for desktop. Users can also pay for fuel at Petrol pumps and buy movie tickets at PVR Cinemas through the wallet. A whole lot of products can be bought from Paytm in categories including electronics, home appliances, mobile phones, and clothing with good cashback scheme for users. Booking bikes, cars, digital gold have been added recently in 2017.

3.3 PhonePe PhonePe is a Fin-Tech company headquartered in Bangalore, India. Founded in December 2015, it provides online payment system based on Unified Payments Interface (UPI), which is a new process in electronic funds transfer launched by National Payments Corporation of India (NPCI).It is licensed by the Reserve Bank of India for issuance and operation of a Semi Closed Prepaid Payment system. By April 2016, it was acquired by Flipkart. In August 2016, the company partnered with Yes Bank to launch a UPI-based mobile payment app. The selling point of the UPI platform is that your money never leaves your account before your transaction is complete. There is no intermediate step where a third party receives access to your money. In short, UPI transactions are direct bank account to bank account transactions. The way PhonePe works, you just need the payee’s bank linked mobile number to make a transaction, provided that they are a PhonePe user too. This removes the need to share confidential details like bank account number and IFSC number.

3.4 Bharat Interface for Money BHIM (Bharat Interface for Money) is a mobile app developed by National Payments Corporation of India (NPCI), based on the Unified Payment Interface (UPI). It was launched by Narendra Modi, the Prime Minister of India, at a Digi Dhan mela at Talkatora Stadium in New Delhi on 30 December 2016. It was named after Dr. Bhimrao R. Ambedkar and is intended to facilitate e-payments directly through banks as part of the 2016 Indian banknote demonetization and drive towards cashless transactions. 12 | P a g e

A Study Of Usage & Security Of The Mobile Payments Services In India The app supports all Indian banks which use that platform, which is built over the Immediate Payment Service infrastructure and allows the user to instantly transfer money between bank accounts of any two parties. It can be used on all mobile devices. BHIM allow users to send or receive money to or from UPI payment addresses, or to non-UPI based accounts (by scanning a QR code with account number and IFSC code or MMID (Mobile Money Identifier) Code). Unlike mobile wallets (PayTM, MobiKwik, mPesa, Airtel Money etc.) which hold money, the BHIM app is only a mechanism which transfers money between different bank accounts. Transactions on BHIM are nearly instantaneous and can be done 24/7 including weekends and bank holidays. BHIM also allows users to check the current balance in their bank accounts and to choose which account to use for conducting transactions, although only one can be active at any time. Users can create their own QR code for a fixed amount of money, which is helpful in merchant-seller-buyer transactions. Users can also have more than one payment address. If the 12digit Aadhaar number is listed as a payment ID, the BHIM app will not require any biometric authentication or prior registration with the bank or Unified Payment Interface (UPI). Version 1.3 allows users to use mobile numbers from their contact book to send money and also save payment addresses for future use without needing to type the address again. User can also check the transaction history, which only shows transactions through BHIM. At present, there is no charge for transactions from ₹1 to ₹1 lakh.

3.5 National Unified USSD Platform (*99# Service) One of the innovative payment service launched by NPCI includes *99# service, which works on Unstructured Supplementary Service Data (USSD) channel. This service was launched envisioning the potential of Mobile Banking and the need for immediate low value remittances which will help in financial deepening and inclusion of underbanked society in the mainstream banking services.*99# service was dedicated to the nation by the Honorable Prime Minister of India Shri Narendra Modi on 28th August 2014 as part of Pradhan

Mantri

Jan

Dhan

Yojana

(PMJDY).

*99# service has been launched to take the banking services to every common man across the country. Banking customers can avail this service by dialing *99#, a “Common number across all 13 | P a g e

A Study Of Usage & Security Of The Mobile Payments Services In India Telecom Service Providers (TSPs)” on their mobile phone and transact through an interactive menu displayed on the mobile screen. Key services offered under *99# service include, interbank account to account fund transfer, balance enquiry, mini statement besides host of other services. *99# service is currently offered by 43 leading banks & all GSM service providers and can be accessed in 12 different languages including Hindi & English. *99# service is a unique interoperable direct to consumer service that brings together the diverse ecosystem partners such as Banks & TSPs (Telecom Service Providers). It is a common technology platform developed by NPCI which allows the Banks and TSPs to seamlessly integrate with each other to provide banking services to the customers at large over the mobile phones (basic as well as smartphone). This USSD-based communication can be used for checking your account balance, generating mini statement, fund transfer via MMID (a code allotted by banks on mobile banking registration), IFSC code or Aadhaar number. Some of the other services that NUUP offers are generating OTPs, M-PIN, and VAS such as query service on Aadhaar mapper which checks the seeding status of your Aadhaar with your bank account. TRAI has set a maximum ceiling of ₹1.5 per transaction for accessing NUUP. It is important to remember that NUUP uses IMPS platform for fund transfer, which is an immediate transfer service, so once a transaction is initiated it cannot be stopped or cancelled. This is unlike an online transaction done via a laptop or mobile where it can be cancelled after initiation.

3.6 SBI Anywhere Personal State bank of India Anywhere Personal is State Bank of India Retail banking application offered on Mobile. The application is available at Google Play store, Apple App store for Android, Windows and Apple smartphones. SBI Retail Internet Banking Users can download the application from respective application market places and access the application with his/her internet banking username and password. The non-financial services offered include m-Passbook, ATM cum Debit card hot listing, Debit Card Blocking, Cheque Book Request, Generate/cancel/retrieve MMID, TDS Enquiry, Online Nomination and Aadhaar Linking/LPG consumer ID linking. While the financial services include 14 | P a g e

A Study Of Usage & Security Of The Mobile Payments Services In India Fund

Transfers

within

SBI

&

other

Banks

to

already

registered beneficiaries using NEFT/RTGS/IMPS modes, Quick Transfer without having to register beneficiary, Post-paid bill payment, Mobile Top -Up and DTH Recharge, Utility Bill payments, mCash Facility, Credit card ( VISA ) transfer with /without one time password (OTP), and Merchant Payments through Bharat QR.It helps customers to conduct banking transactions 24x7 at his/her convenience from any place (Anywhere Banking) just by the use of a mobile phone. This service is available to all SBI customers having an operative savings bank or current account. All the accounts linked to the CIF number will be automatically linked. State Bank Anywhere is a secure and robust application.

3.7 Cent Mobile Cent Mobile is Mobile Banking application offered by Central Bank of India. Users can access most of the banking services anywhere any time through internet enabled handsets. Pre login features are accessible to all without registration, which includes Branch and ATM Locations, Interest rates for time Deposits, Interest rates for Retail Loan Schemes, Forex rates, Contact details of Admin Offices, Link for Corporate website and Official social media pages, Missed Call service for getting Account Balance or last few Transactions over SMS (available to, Customers registered for this service), Apply for new Saving Account, Retail Loan or Credit Card, Real time Notifications/Alerts regarding new launch/offers/modification in schemes etc., Information banners related to products and services of bank, Frequently asked Questions (FAQ) . Post login features can be accessed by customers of Central Bank of India after completing one time registration process, which include Account Balance Enquiry, Account Details, Mini Statement, Fund transfer to accounts with Central Bank of India, Fund transfer to other banks through NEFT/IMPS, Open New Time Deposit Account, Request for personalized ATM (Debit) Card, Request for ATM (Debit) Card Blocking, Link Account to Aadhar Number, Donation to selected Institution, Request for Cheque Book, Request for Stop Payment, Request to Revoke Stop Payment, Cheque Status Enquiry, Registration for getting Account Statement over Email, & NEFT Status Enquiry.

15 | P a g e

A Study Of Usage & Security Of The Mobile Payments Services In India

CHAPTER - 4 Introduction to Study 4.1 Literature Review N

Journal/Conference

Title

Author

o 1

Yea

Conclusion/Results

r Second

International Mobile

Kruttika

Febr

Conference on Mobile payment

Sutrave,

uary, model is presented and each type of mobile

and

Christen

2016

Secure

(MobiSecServ)

Services security,

In this paper, a mobile payment processing

payment systems is

introduced. It also

threats, and Hahn,

summarizes the security services desired in

challenges

Yong

mobile payment systems and also the security

Wang

mechanisms which are currently in place. It further identifies and discusses three security threats, i.e., malware, SSL/TLS vulnerabilities, and data breaches, and four security challenges, i.e.,

malware

detection,

multi-factor

authentication, data breach prevention, and fraud detection and prevention, in mobile payment systems. Information 2

An

Technology

for exploratory

Development

study

Sumit

Janu

The findings of the study reveal the important

Gupta,

ary,

role of perceived risk and control in influencing

2017

customers’ intention to adopt mobile banking.

on Hee-

mobile

Woong

Moreover,

perceived

banking

Kim,

significantly

influenced

risk

and

mobile

control banking

adoption in Heng

adoption by customers in urban areas but only

Indian

Xu,Haeju

perceived

metropolita

ng Yun

mobile banking adoption by customers in

control

significantly influenced

n and urban

metropolitan areas. Additional analysis show

areas

that customers’ risk and control perceptions differ according to level of security.

16 | P a g e

A Study Of Usage & Security Of The Mobile Payments Services In India N

Journal/Conference

Title

Author

o 3

Yea

Conclusion/Results

r Journal

of Mobile

Organizational Computing

Banking: and Exploring

Electronic Commerce

Ravi

Although the number of Internet Banking users

Lonkani,

have grown rapidly in recent years, not all

Chuleepo

customers are ready to accept mobile banking

Determinan rn

services. This study examines the factors that

ts

impact acceptance of the use of mobile banking.

of

its Changchi

Adoption

t,Jomjai

A total of 309 subjects participated in this study.

Sampet

Data was collected via a survey instrument. After multiple regression analysis of the data, findings suggest the factors that bank should consider when implementing mobile banking services, thus allowing them to design services that meet the needs of their customers.

4

Organizacija, 49

Volume User

Aleksand

Nov

The goal of the research was to analyze user

Experience

ra Svilar, emb

opinions about the current situation: how users

with

Joze

er,

perceive security and how the authentication

Security

Zupancic

2016

methods they are using affect user experience.

Elements in

Data was collected using an online survey

Internet

among the users of 15 banks, and statistical

and Mobile

methods were applied to analyze them. The

Banking

results indicate that the use of mobile banking is relatively low, as only 30 percent of respondents use mobile banking along with Internet banking. Users perceive security to be the most important factor in mobile and online banking, closely followed by reliability. 69% of respondents selected the correct authentication method. The opinion of 88% of respondents was that authentication methods do not limit them when using mobile and Internet banking. 17 | P a g e

A Study Of Usage & Security Of The Mobile Payments Services In India N

Journal/Conference

Title

Author

Yea

o 5

Conclusion/Results

r Emerging

Trends

Multi-Disciplinary Research

of  Purusho

in Role National

National Payments

Conference,

Sangli, Corporatio

Maharashtra.

n of India 

(NPCI) for cash

less

economy

Febr

A cashless economy is a system where any type

ttam

uary, of money transactions are done through digital

Arvind

2017

Petare,

means like debit cards, electronic fund transfer, mobile payments, internet banking, mobile wallets, and other newly evolved payment

Mugdha

channels, this will leave very little scope for

Joshi,

flow of hard cash in economy. Further this

Nikita

paper includes the various products & services

Nille

given by the National Payments Corporation of India (NPCI) such as Bharat Interface for Money (BHIM), Unified Payments Interface (UPI), Immediate Payment Service (IMPS), *99# Service, National Automated Clearing House (NACH), Aadhaar Enabled Payment System, RuPay, Bharat Bill Payment System (BBPS) etc. 6

IEEE

International Evaluation

Dr.

J June, As mobile technologies and services are in

Conference on Services Of Mobile Venkates Computing (SCC),

Payment

h,

System

Mr.

And

2013

stable development, many wonder on whether or not mobile payments will be a sin qua non

D

function for mobile commerce. To have an

It's Sathishku

improved consideration of the market, present

mar

there is a requirement to inspect not only the

Service Providers

technology but also the different players that are implicated. This paper investigates the use of mobile payment systems, technologies and security issues. In this paper we can understand the

methodologies,

number

of

network

providers and payment technologies provided by the Mobile networks in India. 18 | P a g e

A Study Of Usage & Security Of The Mobile Payments Services In India N

Journal/Conference

Title

Author

Yea

o 7

Conclusion/Results

r National Conference on Mobile

Deepti

Mar

This paper proposes new mobile payment

Communications

payment

Kumar,

ch,

architectures that support interoperability. A

(NCC), 2010

architecture Timonthy 2010

key technical aspect of the mobile payment

s for India

Gonsalve

process is to lookup customer details, for which

s,Ashok

the following three design options are proposed:

jhunjhun

(1) a central database, (2) a peer-to-peer query,

wala,

or (3) a hierarchical lookup. These options were

Gaurav

evaluated using relevant metrics such as the

Raina

complexity of implementation and scalability with respect to system size. Based on the evaluation it is recommended that initially the peer-to-peer design is chosen, and once the technology is more widespread, the central database option should be adopted.

8

International Journal of Towards a Fergel

Dece This paper derives a theoretical framework for

Bank Marketing

mber consideration of both the technologically driven

framework for

the Carton,

evaluation of

Liam

Jonas

mobile Hedman,

,

dimensions of mobile payment solutions, and

2016

the associated value proposition for customers. Banks promote traditional payment instruments

payments

JB

whose value proposition is the management of

integration

McCarth

risk for both consumers and merchants.

y,

Adopting the purchase and payment process as

Jam

the unit of analysis, the current mobile payment

Damsgaa

landscape is reviewed with respect to the

rd

creation and consumption of customer value. From this analysis, a framework is derived juxtaposing customer value, related to what is being paid for, with payment integration, related to how payments are being made. 19 | P a g e

A Study Of Usage & Security Of The Mobile Payments Services In India N

Journal/Conference

Title

Author

o 9

Yea

Conclusion/Results

r Journal of Business and “Rechargin Management

Dr.

(IOSR- g: the Right Karmind

Janu

The case study possesses a strategic question

ary,

whether it is a better strategy to develop a

2016

unique positioning on the basis of single key

JBM)

Way??” A er

e-ISSN: 2278-487X

case study Ghuman,

service or it’s better for an organization to offer

on

e- CS Shruti

multiple services. To answer this fundamental

payment

Shrivasta

question, the present study employs the case

giants:

va

example of two leading e-platforms: Freecharge

Freecharge

and PayTM that are employing diametrically

& PayTM

opposite strategies in order to scale up their ventures. It also examines the role of Push and Pull strategies in a single industry, thus drawing the reader to take a position, which is better and why.

1

13th

0

Conference

International Mobile

Gabriel

on Payment: A Machado

Information Systems & systematic Technology

review

ManagementCONTECSI 2016

June, It identified 4 categories where the studies 2016

Braido,

forum concentrate, namely: adoption of mobile payment (Theory of Innovation), trust ship

of Amarolin

(Theory of Transfer of Confidence), intention to

the

da Zanela

use technology (Unified Theory of Acceptance

literature

Klein

and Use of Technology) & acceptance of technology (Technology Acceptance Model).

1

Journal

1

Organizational Computing

of Mobile Banking: and Exploring

Electronic Commerce

Ravi

May, This study examines the factors that impact

Lonkani,

2017

Chuleepo

acceptance of the use of mobile banking. A total of 309 subjects participated in this study. Data

Determinan rn

was collected via a survey instrument. After

ts

its Changchi

multiple regression analysis of the data,

t, Jomjai

findings suggest the factors that bank should

Sampet

consider when implementing mobile banking

of

Adoption

services, thus allowing them to design services that meet the needs of their customers. 20 | P a g e

A Study Of Usage & Security Of The Mobile Payments Services In India N

Journal/Conference

Title

Author

Yea

o

Conclusion/Results

r

1

National

Mrunal

7

The stated role of Digital India is "Faceless,

2

disciplinary conference Payment

Chetanbh

Octo

Paperless, and Cashless". To support Cashless

on Digital Payments System: A ai Joshi

ber,

as a part of Digital India Campaign government

Systems

2017

has initiated with different modes of digital

India

Multi- Digital

and by

Rural Feat North Forward of

payment system. This paper studies the trend in

India

various modes of digital payments like NFS

Maharashtra University, Jalgaon

Inter Bank ATM Cash Withdrawal, NACH, CTS, IMPS, AEPS, BBPS, UPI, BHIM (UPI) and NETC in last three years. In this study it is found that in previous two years (2015-16 and 2016-17) and especially during the year 201718 (up to July 2017) there is remarkable growth in digital payment in volume and value both.

1

International Journal of Heuristic

3

Engineering and

Ashu

Research Analysis of Prakash

Technology, "Growth of

Apri

Information Technology sector in India is

l,

making progress at rates way beyond what was

2017

expected 30 years back. A company like

Volume 6, Issue 4, PayTM"

PayTM has covered the entire online market of

April 2017 edition

India. The number of transactions through the gateway of PayTM is second highest in the country after IRCTC. This paper analyses the all-round growth of the company in the ecommerce sector of India. PayTM started in 2010 as a mobile recharge company and currently it is everywhere in the commercial market. It has its own payments bank approved by the Reserve Bank of India and is currently the largest commercial market on the web in the country of 1.2 billion people.

21 | P a g e

A Study Of Usage & Security Of The Mobile Payments Services In India N

Journal/Conference

Title

Author

o

Yea

Conclusion/Results

r

1

Information

4

Technology Development

Perception

Umesh

for of Trust in Chandras

Janu

This research addresses a pre-requisite for

ary,

mobile payment adoption in India-the factor of

2016

trust. For large-scale adoption of mobile

Mobile

ekhar,

Payment

R

payments, customers must be assured that these

Usage

Nandgop

payments should have minimal environmental

Intent India:

in al

risks (abuse of billing and usage information,

An

misuse,

oversight)

for

them,

operators

Explorator

reputation (fairness and honesty) must be good

y Study

and no risk of operator opportunism (delivering promises, right charges and confidentiality of information should be present. In addition, easy error mitigation in case of mistakes/refunds should be possible.

1

International Journal for Analysis of A

5

Scientific Engineering (IJSER)

Janu

The research has also lent evidence to the fact

& the

Nagendra ary,

that there will be huge scope and opportunities

Research inception,

, B Shah, 2017

for digital payment players to increase their

D.S.

market size. It was learnt that the introduction

acceptance

and future Ullatil

of UPI mobile app will overcome challenges

of e-wallets

that banks are currently facing. From the primary research it was observed that the awareness of UPI is quite negligible in comparison to E-wallets amongst the users. This will have a positive impact and will encourage E-wallet companies, banks as well as other payment service providers to launch more initiatives. The findings indicate that E-wallets in the future will be able to solve some of the existing problems, and face new challenges from banks. 22 | P a g e

A Study Of Usage & Security Of The Mobile Payments Services In India N

Journal/Conference

Title

Author

o

Yea

Conclusion/Results

r

1

IFRSA’s International J The

Munish

6

ournal Of

Adoption

Sabharwa ber

inquired from the branch heads of selected

Computing|Vol2|issue

Computer

l

banks and compared the responses with the

4

Informatio

desired state using GAP Analysis Worksheet.

|

n

The study indicated that the most of the banks

Oct

Security

selected by the researcher in his research

2012

Standards

backup its data at a Remote offsite location,

by

have a BCP / DRP Plan available with them on

Octo

2012

System

Indian

Banks

The researcher with the help of a questionnaire

software but they do not apply Disaster Management System as per RBI -“Guidelines on information security, Electronic Banking, Technology risk management and cyber frauds” and other international standards.

1

International Journal of Mobile

Emmelin

Febr

The purpose of this paper was to harness the

7

Retail & Distribution payment

e Taylor

uary

learning from the implementation of self-

2016

checkout and combines it with available

Management

technologie s in retail: a

information relating to mobile scanning and

review

mobile point-of-sale (MPOS). With the market

of

potential

being flooded with software and products,

benefits

retailers are exposed to a compelling case for

and risks

mobile payment, but it was found that they are not as cognizant of the potential risks. Research Further research is needed on the different permutations of mobile POS and how it impacts on the customer journey and rates of internal and external theft. Suggestions for future empirical

research

on

the

risks

and

vulnerabilities that moving to mobile payment can usher in are provided. 23 | P a g e

A Study Of Usage & Security Of The Mobile Payments Services In India N

Journal/Conference

Title

Author

o

Yea

Conclusion/Results

r

1

International Journal of User

8

Man-Machine Studies

Florian 

Octo

This study distinguished security in two

Acceptance Urmetzer

ber,

dimensions: objective and subjective security.

and Mobile ,

2014

Objective

security of

represents

existing

the

user's

technical

safety

Payment

Isabelle

perception

Security

Walinski

mechanisms. Subjective security is intangible, based on the user's feelings and perception towards security (trust). The study showed that despite the financial crisis banks are still the preferred

providers

for

mobile

payment

services, where over 80% of the respondents would like to receive the service from a bank. In contrast, only 20% would like to receive such a service from a mobile phone producer. Additionally objective security does not substantially increase subjective security; hence the user trusts the provider rather than the technology itself. 1

Journal

9

Banking

of

Commerce

Internet Payment

Deepank

and Systems in ar Roy, India:

Amarend

Aug

The paper shows areas for improvement in the

ust

efficiency in existing payment systems in India

2016

and the other countries especially in regard to

Opportuniti ra Sahoo

the liquidity risk, operational risks, access

es

criterion, transparency etc. In the end, the paper

and

Challenges

makes

a

opportunities

modest

attempt

and

challenges

to

identify

for

India.

Numerous major changes in the payment system would take place at a quicker pace as ecommerce becomes more prevalent in the economic activities in the country.

24 | P a g e

A Study Of Usage & Security Of The Mobile Payments Services In India N

Journal/Conference

Title

Author

o

Yea

Conclusion/Results

r

2

Department

of Cashless

0

Mathematics,

Indian Payment

Institute of Technology System Bombay,

Febr

Das,

uary, usage of payment cards, this paper studies the

in and

Mumbai- India-A

400076, India

Ashish

Roadmap

2013

While trying to look for the reasons of poor

costs involved in India by holding independent

Rakhi

interactions with all players in the system. With

Agarwal

the rationalization in costs, the banks and card companies would continue to gain, as revenues would increase due to increase in usage and user base. Additionally, for the Government, with the new pricing the gain will be twofold— firstly there will be sizable reduction in the growth of currency management cost, and secondly, the system will generate volumes of data on spending behavior of individuals that can

be

used

by

the

government

for

developmental planning. 2

Handbook of Research Overview

Sanghita

Janu

The payment systems have numbers of

1

on

Roy

ary

requirements:

2015

convenience, cost, anonymity, control, and

Cultural

and of

Economic Impacts of electronic the

Information payment

Society, pp.391-418

e.g.

security,

acceptability,

traceability. Therefore, instead of focusing on

system: A

the technological specifications of various

special

electronic payment systems, the researcher has

reference

distinguished electronic payment systems based

to India

on what is being transmitted over the network; and analyzed the difference of each electronic payment system . To sustain in the competition more banks are following e-commerce and especially using e-payment mechanism.

25 | P a g e

A Study Of Usage & Security Of The Mobile Payments Services In India

4.2 Background of study This research is focused on options available for the mobile payments. As discussed, the mobile payments industry is one of the fastest growing industries in India, its security is of great significance. This research analyses the security measures provided by various mobile payments services in India, to determine whether they follow the reulations or principles for the security of the services. The research is based on primary data collected from 280 respondents using stuctured questionnaires distributed using e-mails, online survey websites, social networking websites & one to one questionnaire requests. The secondary data mainly includes RBI’s the operating guidelines for mobille payments, as well as The Basel Committee on Banking Supervision’s principles to control and reduce the risks associated.

4.3 Rationale of Study The reason for conducting this study is to identify security measures implemented by the mobile payments services used & see to it whether they suffice the guidelines issued by the regulators in India. In this way the security of the mobile payments service provider is evaluated. Besides this research also categorizes the mobile payments services available in India, based on their features. Further this research also provides insights regarding the usage of the mobile payments services in India.

4.4 Objectives I.

Primary Objectives 

To classify various Mobile Payments services available in India.



To evaluate the security of various Mobile Payments services.



To investigate the relationship between gender of the users & the usage of mobile payment services.

26 | P a g e

A Study Of Usage & Security Of The Mobile Payments Services In India

II.

Secondary Objectives 

To find out which mobile payments services are most popular among the users.



To identify the important factors which infuences the usage of mobile payments services.



The find out factors which dissuades the individual from using the mobile payments services.



To find out the most common reason for usage of the mobile payments services.



To find out the frequency in the usage & the monthly spent money using the mobile payments services.

4.5 Hypothesis 

H1: There is no significant difference in the Usage Frequency of the mobile payment services based on their gender.



H2: There is no significant difference in the Monthly Spent Money of the users of the mobile payment services based on their gender.

27 | P a g e

A Study Of Usage & Security Of The Mobile Payments Services In India

CHAPTER - 5 Research Methodology 5.1 Research Design The study follows a descriptive research design. It is concerned with describing the charactericstics of the security as well as the usage of the mobile payments services. The study is about the mobile payments services in India. It is made to evaluate the security, identify the usage & categorize the various Mobile Payments Services. The data for the research is collected from primary & secondary sources. The secondary data is collected from various journals, websites, & articles. For Primary data collection a structured questionnaire is used to collect responses from 280 participants. The questionnaire survey followed a non probabilistic sampling technique, convinience sampling, in which the questionnaire was distributed using personal e-mails, online survey tools like surveymonkey & questionpro, social networking sites like facebook, as well as, one to one questionnaire requests. For identifying the relationship between the usage of the mobile payments services & the gender of the users, independent sample t test is performed on the primary data collected which is presented in the next chapter. For categorizing the mobile payments services the help of secondary data sources is taken which is mentioned in the literature review . And in order to evaluate the security of the mobile payments services, a conceptual model is prepared with the help of secondary data mentioned in the literature review. This model is then used for evaluating the security of the mobile payments services. The secondary data is used to determine the variables (in this model) to measure the security of the mobile payments services. The Primary data collected has inputs to these variables, which evaluate the security. Thus, the secondary data is used to constuct the conceptual model & primary data is used as an input in that model to evaluate the security of the mobile payments services. In this research we have evaluated the security of the top two of the most preffered mobile payments services in each of the categories identified, which is presented in the next chapter.

28 | P a g e

A Study Of Usage & Security Of The Mobile Payments Services In India

5.2 Sources of Data The sources of data can be divided in two kinds: 1. Primary Data Sources: Some data specifically was produced for the purpose of research, which was collected from various sources like a) Online Survey Tools b) One to One Questionnaire Requests c) Personal E-mails d) Social Networking Site Forums 2. Secondary Data Sources: Some existing publications related to the mobile payments services were also refferred in this research, mainly for the two purposes viz. categorizing the mobile payments services & determining the variables for evaluating its security. Their sources are a) Journals b) Websites

5.3 Data Collection Method The primary data for the research was collected by using the survey method. The secondary data for the objective of evaluating the security was collected with the priority of the government regulations in India & for the objective of categorizing the mobile payments services was collected considering the latest trends in the mobile payments industry.

5.4 Population The Population for the research includes the users of the mobile payments services in India.

5.5 Sampling Method The research work included collecting primary data from different sources as mentioned above. For that purpose a non-probabilistic sampling technique was adopted. The sampling method adopted was Judgemental Sampling with the purpose of prior identification of the respondent to be the user of the mobile payments services.

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A Study Of Usage & Security Of The Mobile Payments Services In India

5.6 Sampling Frame The sample size for the research consisisted of 280 respondents. The sampling frame from each primary data sources are 79, 89, 58, & 64 respondents respectively.

5.7 Data Collection Instrument A Structured Questionnaire is used as the data collection instument for gathering inputs form the users of the mobile payments services, which served as the primary data for the reseach.

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A Study Of Usage & Security Of The Mobile Payments Services In India

CHAPTER - 6 Data Analysis & Interpretation

6.1 On Categorization of the Mobile Payments Services Based on the secondary data analysis the mobile payments services in India can be classified into four broad categories: Category

Charactericstic

Mobile Wallets

Prepaid

Payments

Service providers Instrument PayTM, FreeCharge, M-paisa,

(PPI)issuers ; User can store/save Citrus

Pay,

Oxygen,

money in it from their bank account, MobiKwik, Lime, mRupee, besides performing transactions.

Jio Money, My Airtel,

Appliations linking to User can perform transaction using BHIM, PhonePe, Google Tez, Bank account

this platform but cannot save money. PayPal,

Ultracash,

RechargeItNow.com. Bank’s Application for Provided only to bank’s account ICICI Pockets, Cent Mobile, A/C holders

holders for accessing account & SBI Quick, HDFC’s Chillr, perform transactions.

Pay Zapp, Axis Pay,Axis Mobile, SBI Buddy, U-mobile

Basic service

USSD

(*99#) Doesnot need internet connectivity *99# & can perform transactions.

Table 1: Categories of Mobile Payments Services Mobile wallets is the first category & they are very popular amongst the users. Mobile wallet companies have to work as per the RBI guidelines for the prepaid payments instrument (PPI) issuers. Besides performing transactions, users can store money in the wallet from their bank account. PayTM, Freecharge, M-paisa, Citrus Pay, Oxygen, MobiKwik, Lime, mRupee, Jio

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A Study Of Usage & Security Of The Mobile Payments Services In India Money, My Airtel, etc are some of the popular choices amongst the users. BHIM, PhonePe, Google Tez, PayPal, Ultracash, RechargeItNow.com. The second category is the applications linking to bank account of the user, in which the user can only perform the transaction using this platform but cannot save money. The third category of the mobile payments services are the applications which are provided by the banks only to the bank’s account holders for accessing the account & performing the transactions. The fourth category includes the basic USSD service which can be accessed through any mobile phone to perform transaction & does not need an internet connection or service.

6.2 On Security of the Mobile Payments Services The apps were evaluated on the RBI guidelines6 and BASEL norms7 for secure digital financial transactions as below: i.

Confidentiality: The transaction, bank account details, and wallet balance of the user should be confidential and not accessible to unauthorized users or third-party vendors. To evaluate this aspect in the apps, we investigated whether the data (in-transit or saved data) was accessible only to intended stakeholders (Adopted from Basel e-transaction Security Controls principle-10 and RBI guidelines’ 1st property)

ii.

Transaction non-repudiation management: In the case of mobile payments, transactions are confirmed using notifications, SMS and emails containing essential details (amount, time of transaction, sender, receiver, app vendor name and comments) and confirmation of the transaction to both sender and receiver, and these ought to be logged and tracked to prevent false denial. To evaluate this aspect, we investigated whether a) The transaction logs were maintained and if the data in the logs could be used in case of transaction repudiation b) The app tracked and warned in cases of unusual transaction patterns – for example, multiple transactions being carried out in quick succession (within a few seconds) (Adopted from RBI guideline’s 4th property)

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A Study Of Usage & Security Of The Mobile Payments Services In India iii.

Authentication of the identity of the customers: It is very important for mobile apps, during a transaction, to ensure that it is the authenticated account holder who is transferring the money. Authentication can be achieved by the use of unique passwords or biometrics of the user. To evaluate this aspect, we investigated a) Whether every transaction was authenticated, and conducted with explicit consent b) The strength of login and logout process authentication. If this process is not sufficiently authenticated, it would be similar to leaving the door open for any intruder to enter the house at any time. (Adopted from Basel e-transaction Security Control principle-4 and RBI guideline’s 3rd property)

iv.

Data and transaction integrity: The transaction details and wallet amounts shown to the customers in app notifications and statements should be consistent with actual details. To evaluate this aspect, we investigated whether the a) Data maintained and displayed were accurate and consistent b) Transaction confirmation processes followed the norms of a reliable and consistent transaction (Adopted from Basel e-transaction Security Control principle-8 and RBI guideline’s 2nd property)

v.

Access and availability: In case of mobile payment services, the network forms a key feature for the availability of the services to the customer. Some apps and USSD systems work through SMS or voice calls from the mobile phone, thus being available to customers who do not have internet or data connections on their mobile devices. To evaluate this aspect, we investigated the a) Variety of modes in which the services were available b) Reliability of the service (such as availability of information on ombudsman, security and more) (Adopted from Basel e-transaction Legal and Reputational Risk Management principle-13). 33 | P a g e

A Study Of Usage & Security Of The Mobile Payments Services In India vi.

Privacy of customer information: The payment app or service should not ask for customer data that violates privacy or increases risk of identity theft. This principle is particularly prominent during app installation when the user needs to give access permissions to the app for a multiple number of fields. To evaluate this aspect, we investigated whether the requested privileges were justified (whether the functionality of the app could be compromised without access to the privileges). (Adopted from Basel e-transaction Legal and Reputational Risk Management principle12)

Conceptual Framework to evaluate Security of the mobile payment services: From the RBI guidelines & Basel Norms discussed above, a framework is prepared to evaluate the security in the mobile payments services which is mentioned below. In the frame work,

V1 = Variable 1 which denotes ‘Confidentiality’ V2 = Variable 2 denoting ‘Non Repudiation’ V3 = Variable 3 which denotes ‘Authentication’ V4 = Variable 4 which denotes ‘Integrity V5 = Variable 5 which denotes ‘Access & Availibility’ V6 = Variable 6 which denotes ‘Privacy’

‘A’ indicates that all the respondents agree to a particular mobile payments service satisfying in the given variable of the framework; ‘B’ indicates that not all the respondents agree to a particular mobile payments service satisfying in the given variable of the framework; ‘C’ indicates that no respondents agree to a particular mobile payments service satisfying in the given variable of the framework.

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A Study Of Usage & Security Of The Mobile Payments Services In India Mobile Payment Service

V1

V2

V3

V4

V5

V6

PayTM

B

A

B

B

A

B

Freecharge

B

A

B

B

B

B

BHIM

A

A

A

B

B

B

PhonePe

B

A

B

B

B

C

SBI Buddy

B

A

A

A

A

B

Axis Pay

B

A

A

A

B

B

Chillr

B

A

B

A

B

B

Google Tez

A

A

A

B

B

C

M-paisa,

B

A

A

B

B

B

Citrus Pay

B

A

A

B

B

B

Oxygen

B

A

B

A

B

B

My Airtel

B

A

A

B

B

B

ICICI Pockets

B

A

A

A

B

B

mRupee

B

A

B

B

B

C

Paypal

A

A

B

B

B

B

Jio Money

B

A

B

A

B

B

Cent Mobile

B

A

A

A

B

B

MobiKwik

B

A

B

B

B

B

USSD (*99#)

A

A

A

B

A

A

Table 2: Security of Mobile Payments Services

6.3 On Usage of the Mobile Payments Services Descriptive Statistics : The primary data for the research was collected from 300 respondents using the structured questionnaire. Out of them, 54.6 % are the male respondents & 45.4 % are female respondents. Table 3 indicates the demographic profile of the repondents. Majority (38.66 %) of the repondents are falling into the age category of 21 to 25 years followed by 26 to 30 years (17.33 %). Further looking at the experience in using the mobile payments services shows that majority (41.33 %) of the respondents have 1 to 2 years & 6.67 % of the repondents had no 35 | P a g e

A Study Of Usage & Security Of The Mobile Payments Services In India experience in using the mobile payments services. Besides 39.66 % of the respondents have job or service, followed by 27.33 % of the respondents who are Students. Particulars

Respondents

Percentage

Male

164

54.6

Female

136

45.4

Business

46

15.33

Student/ Research Scholar

82

27.33

Service/Job

119

39.66

Other

34

11.33

Unemployed/ Not working

19

6.33

Nil

20

6.67

Less than 1 year

81

27

More than 1 year upto 2 years

124

41.33

More than 2 years

75

25

Less than equal to 20

16

5.33

21 to 25

116

38.66

26 to 30

52

17.33

31 to 35

33

11.00

36 to 40

24

8.00

41 to 45

18

6.00

46 to 50

27

9.00

Greater than 50

14

4.66

Total

300

100

Gender

Occupation

Usage Experience

Age

Table 3: Demographic Profile of respondents

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A Study Of Usage & Security Of The Mobile Payments Services In India

Analysis of Mobile Payments Users Most Used Mobile Payments services: The primary data shows that majority of the respondents uses PayTM (31.43 %) followed by other mobile payments services (17.86 %). Besides freecharge is also popular among users with 15.36 % respondents using it, followed by SBI Buddy (13.93 %) & Phone Pe (12.5 %). Only 8.93 % of the repondents are using the BHIM application. Table 4 shows the ranks of the mobile payments services based on their popularity amongst users. Rank

Mobile

Payments Respondent

Percentage

Service 1

PayTM

88

31.43

2

Freecharge

43

15.36

3

SBI Buddy

39

13.93

4

PhonePe

35

12.5

5

BHIM

25

8.93

6

Others

50

17.86

280

100

Total

Table 4: Most Famous Moble Payments Services

Most important factors influencing the users of the Mobile Payments services: Table 5 illustrates the factors that influence the adoption of the mobile payments services. It is identified that the users consider 24 x 7 access most important with the highest rank, followed by user friendly interface and third as Exchange platforms. Respondents rank least to Discounts & Rewards for influencing them in using the mobile payments services.

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A Study Of Usage & Security Of The Mobile Payments Services In India Rank

Factor

Respondent

Percentage

1

24x7 Access

106

37.9

2

User friendly Interface

84

30.0

3

Exchange platforms

59

21.1

4

Discounts & Rewards

31

11.0

280

100

Total

Table 5: Factors for infuencing the users of Moble Payments Services

Frequency of usage of the Mobile Payments services : It is identified that majority of the respondents use the mobile payments services at least once in a month, followed by respondents using it at least once in a week. While only 14.3 % respondents use it at least once in a year, 17.79 % of the respondents use it on a regular basis. Usage Frequency

Respondent

Percentage

Daily

50

17.9

Weekly

71

25.4

Monthly

119

42.5

Yearly

40

14.3

Total

280

100

Table 6: Usage frequency of Moble Payments Services

Most Common Purpose for using the Mobile Payments services: Table 7 represents the purpose for which the mobile payment services are used most of the times by the respondents. It is observed that 32.5 % of the respondents generally use mobile payments services for purchasing or shopping, followed by 27.1 % for bill payments. The 22.9 % of the respondents mostly use it for the purpose of transferring funds, while 12.5 % respondents commonly used it for Balance inquiry or account statement.

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A Study Of Usage & Security Of The Mobile Payments Services In India Rank Reason 1

Respondent

Purchasing/shopping (Online websites, Restuarants, 91

Percentage 32.5

Cinema, etc) 2

Bill Payments (Electicity, Phone, DTH, Gas)

76

27.1

3

Funds Transfer

64

22.9

4

Balance Enquiry/ Account Statement

35

12.5

5

Others

14

5.0

Total

280

100

Table 7: Reason for using Moble Payments Services

Monthly Expenditure using the Mobile Payments services: The money spent using mobile payments services in a month by the respondents are illustrated in Table 8. It is found that majority (32.1 %) of the respondents fall in the category of 500 rs to 1000 rs, followed by 26.1 % users who spend more than 2000 rs . While 18.2 % respondents spend less than 500 rs ina month using the mobile payments services. Transaction value

Respondent

Percentage

Less than 500 INR

51

18.2

500 to 1000 INR

90

32.1

1001 to 1500 INR

35

12.5

1501 to 2000 INR

31

11.1

More than 2000

73

26.1

Total

280

100

Table 8: Money Spent using Moble Payments Services

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A Study Of Usage & Security Of The Mobile Payments Services In India

Difference between male & female Mobile Payments users a) T-Test for Usage Frequency vs Gender It is intended to examine whether there is any significant difference in the frequency of the usage of the mobile payments services by the users based on their gender For this an independent sample t-test has been used with Gender as independent variable and Usage Frequency as dependent variable. By performing the test following null hypothesis has been tested. H0: There is no significant difference in the frequency of usage of the mobile payment services based on their gender.

The group statistics for the T test is illustrated in the table 9. The mean for the male gender is 2.65 with the standard deviation of 0.89, while the mean for the female gender is 2.62 with the standard deviation of 0.99. This suggests that there is less difference in the frequency of using the mobile payment services amongst male as compared to female gender.

Group Statistics Male

or N

Mean

Female Number used

of

times Male Female

Std.

Std.

Deviation

Mean

164

2.6524

.89713

.07005

116

2.6207

.99263

.09216

Error

Table 9: Group Statistics for Gender & Usage frequency

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A Study Of Usage & Security Of The Mobile Payments Services In India Independent Samples Test Levene's Test t-test for Equality of Means for

Equality

of Variances F

Sig.

t

df

Sig.

Mean Std.

95%

(2-

Differ Error

Interval

tailed) ence

Equal variances 3.374 .067

Frequency for

.279

278

.780

assumed

the

mobile

.0317 5

of

the

Differe Difference nce

Usage

Confidence

Lower

Upper

.11377 -.19222

.25572

.11577 -.19634

.25984

Equal

payments

variances

services

not

.274

231. 705

.784

.0317 5

assumed

Table 10: Independent sample T Test for Gender & Usage frequency

Table 10 illustrates the data from the independent sample T test performed with Gender as the grouping variable and Usage Frequency for the mobile payments services as the test variable. The f value (3.374) is also above 0.05, so we would see the first column. From the table we can see that p value (0.780) is greater than 0.05, which means that we accept the null hypothesis & there is no significant difference in the frequency of usage of the mobile payments services based on their gender. This suggests that the frequency of using the mobile payment services is not dependent on the gender of the user as there is no significant difference in the frequency of using the mobile payment services amongst the male & female users.

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A Study Of Usage & Security Of The Mobile Payments Services In India

b) T-Test for Monthly Spent Amount vs Gender It is intended to examine whether the gender has any influence on the monthly amount spend using the mobile payments services. For this an independent sample t-test has been used with Gender as independent variable and monthly money spent as dependent variable. By performing the test following null hypothesis has been tested. H0: There is no significant difference in the monthly expense of the users of the mobile payment services based on their gender. The group statistics for the T test is illustrated in the table 13. The mean for the male gender is 3.42 with the standard deviation of 1.50, while the mean for the female gender is 2.27 with the standard deviation of 1.16. This suggests that there is less difference in the monthly money spent using the mobile payments services amongst female as compared to male gender.

Group Statistics Male

or N

Mean

Female Average expenditure

monthly Male Female

Std.

Std.

Deviation

Mean

164

3.4207

1.50657

.11764

116

2.2759

1.16907

.10855

Error

Table 11: Group Statistics for Gender & Monthly Expense

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A Study Of Usage & Security Of The Mobile Payments Services In India Independent Samples Test Levene's Test t-test for Equality of Means for Equality of Variances F

Sig.

t

df

Sig. (2- Mean tailed)

Differenc Error e

Money

Equal

spent

variance 36.05

monthly s

3

.000

6.853

278

Std.

95%

Confidence

Interval

of

the

Differen Difference ce

Lower

.000

1.14487

.16706

.81601

.000

1.14487

.16007

.82976

Upper

1.4737 3

using the assumed mobile

Equal

payment variance s

s

not

7.152

275.57 8

services assumed

Table 12: Independent sample T Test for Gender & Monthly Spent Money

Table 14 illustrates the data from the independent sample T test performed with Gender as the grouping variable and Money spent monthly using the mobile payments services as the test variable. The f value (36.053) is also above 0.05, so we would see the first column. From the table we can see that p value (.00) is less than 0.05, which means that we reject the null hypothesis & there is a significant difference in monthly amount spend by the users of the mobile payments services based on their gender. This suggests that and the money spent monthly using the mobile payment services is dependent on the gender of the user as there is significant difference in the money spent monthly using the mobile payment services amongst the male & female users.

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1.4599 8

A Study Of Usage & Security Of The Mobile Payments Services In India

Analysis of Non-Users of Mobile Payments Table 13 illustrates the reasons due to which some of the respondents were bot using the mobile payments services. There were 20 respomdents out of 300 who do not use the mobile payments services, of which 8 were males & 12 were females. They were asked about the reasons for not using the mobile payments services. Majority (45 %) of those respondents did not possess smart phone, while 25 % the respondents cited lack of knowledge as the reason for not using the mobile payments services. Rank Reason

Respondents

Percentage

1

Donot possess smart phone

9

45

2

Lack of knowledge/ Not Techsavvy

5

25

3

No need

4

20

4

Security Concerns/ No Trust

2

10

20

100

Total

Table 13: Factors discouraging adoption of Moble Payments Services

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A Study Of Usage & Security Of The Mobile Payments Services In India

CHAPTER - 7 Results & Findings The mobile payment services is classified into four categories, from analysing the secondary data, for the objective of classification of the various mobile payments services available in India (Section 4.4.1.1) . These are mobile wallets, applications linking to user’s bank account, bank’s own appliaction for account holders, & basic USSD service (*99#). The study suggests that the usage of mobile wallets are more prevelent, followed by the bank’s applications for the account holders. While USSD service is the least used category of the users of the mobile payments services . The secondary data was analyzed to prepare a conceptual model to evaluate the security of the mobile payments services (Section 4.4.2.2). The findings of the research based on data analysis of the primary data suggests that all the mobile payments services have security concerns based on one or more security principles. Potential for confidentiality breaches was a problem observed for all the mobile payment methods, except USSD. Some apps have an unusual and unreasonable access to the one-timepassword sent by a partner bank. There was no evidence of systematic analysis of transaction patterns with a warning to users of unusual or problematic transactions in any of the applications. Data and transaction integrity was quite sound for most of the apps. There are serious privacy concerns with all the services studied, except USSD service as it does not ask for other privileges such as access to identity, media etc. All the apps demand access to private data of the user, on the phone, without providing a clear rationale as to why this is needed. The mobile payments services are widely accepted by the people as a payment method in India. This result is based on analysis of the primary data shown in table 3 in which shows that out of 300 respondents , only 20 respondents (6.67 %) were not using the mobile payments services while 280 repondents (93.33 %) were the users of the mobile payments services. . Majority of these respondents are students or individuals with service/job who are aged between 20 to 30 years. As a result for the objecive of detemining the most popular mobile payment services amongst the users (Section 4.4.2.1) , PayTM emerged as the most popular amongst the users of the mobile 45 | P a g e

A Study Of Usage & Security Of The Mobile Payments Services In India payment sevices with 31.43 % respondents choosing it as first choice, followed by Freecharge with 15.36 % respondents choosing it as first choice , SBI Buddy with 13.93 % respondents choosing it as first choice, PhonePe with 12.5 % respondents choosing it as first choice, & BHIM with 8.93 % respondents choosing it as first choice. For the objective of determining the factors that infuence the users of the mobile payment services (Section 4.4.2.2), 24 x 7 access can be ranked first as 37.9 % respondents found it as in important factor in using the mobile payment service. User friendly Interface is ranked second with 30 % ,Third is Exchange platforms with 21.1 %, & Discounts & Rewards with 11% is fourth important factor in using the mobile payment service preferred by the user. For the objective of determining the factors which prevents the individual from using the mobile payments services (Section 4.4.2.3), the ananlysis of the non-users of mobile payments was done. It

was found that absense of smart phone was a prominent reason (45 %), followed by lack of knowledge (25 %). For the objective of determining the frequency in the usage of the mobile payments services (Section 4.4.2.4), it was found that 42.5 % of the users use the mobile payments services atleast once in a month, while 25.4 % users use it atleast once in week & 17.9 % respondents use it atleast once daily. For the objective of determining the most common reason for usage of the mobile payments services (Section 4.4.2.5), it was found that majority of the users mostly use the mobile payments services for purchasing or shopping with 32.5 % of the respondents, followed by the purpose of bill payments with 27.1 % users.while 22.9 % users mostly use the mobile payments services for funds tranfer. While analysing data for the objective of determining the monthly spent money using the mobile payments services (Section 4.4.2.6), it was found that 32.1 % of the users spend between 500 to

1000 rs monthly using the mobile payments services. 26.1 % users spend more than 2000 rs monthly, while 18.2 % users spend less than 500 rs monthly using the mobille payments services. Data obtained from the study provided information regarding the usage pattern of the users of the mobile payments services in terms of the frequency of usage, monthly money spent, & most

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A Study Of Usage & Security Of The Mobile Payments Services In India common purpose which was analyzed for the objective to investigate relationship between the gender of the user & the usage of the mobile payment services. (Section 4.4.1.3) It was found from the study that both both male & female users have the same frequency in using the mobile payment services, while male users spend more in a month as compared to the female users using the mobile payment services. In other words, there was no relationship between the gender of the user & the usage frequency, while there was significant relationship between the gender of the user & the money spent monthly using the mobile payments services.

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A Study Of Usage & Security Of The Mobile Payments Services In India

CHAPTER - 8 Limitations of Study As the Mobile Payments Services is in the field of technology, it is in the process of constant modification.Hence the responses of the users might be limited to the period of 28 th January 2018 to 25th March 2018, after which may be some of the security concerns might have been adrressed by the mobile payments services providers. Another limitation related to this study is that the primary data is collected on a ordinal scale, hence limited statistical tests could be applied when testing a hypothesis. Additionally while preparing the sampling frame a non-probabilistic sampling technique was adopted which restricts its validity on the population, while applying inferential statistics for hypothesis testing.

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A Study Of Usage & Security Of The Mobile Payments Services In India

CHAPTER - 9 Conclusion/Suggestion It can be concluded from the study that the mobile payments services are widely accepted by the people as a payment method in India. The mobile payment services available in India can be classified into four categories, viz. mobile wallets, applications linking to user’s bank account, bank’s own application for account holders, & basic USSD service (*99#). From the findings regarding the security of the mobile payments services we can conclude that the security in not upto the mark in any of the mobile payments services. Improvements in terms of security of the mobile payments services will enhance the trust of the users in the mobile payments services. From the analysis of the mobile payment users we can conclude that the most popular mobile payments services amongst the users is PayTM. Besides the most important factor influencing the users of the Mobile Payments services is 24 x 7 access. Most of the users use the Mobile Payments services at least once in a month, while Shopping or purchasing in Stores, Restuarants, Cinema, Online websites, etc remains the Most Common Purpose for using the Mobile Payments services. Most of the users spent monthly 500 rs to 1000 rs using the Mobile Payments service. From the analysis of the non users of the mobile payment services we can conclude that most common factors preventing the usage of the mobile payment services are not possessing a smart phone & lack of knowledge. As far as relationship between the gender of the users & the usage pattern of the mobile payments services is concerned, we can conclude that there is no association between the gender of the users and the usage frequency of the mobile payment services but there is a significant relationship between the gender of the users and money spent monthy using the mobile payments services.

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[10] J. H. j. d. K.-T. T. Fergal Carton, "Framework for Mobile Payments Integration," December,2016. [Online]. Available: http://research.cbs.dk/en/publications/uuid(e96df5bb-1d80-4380-8e8cb19e026dab89).html. [11] M. J. J. N. Desai, "Paper Digital Payamet Before During and After Demonetisationhttps://www.researchgate.net/publication/322477150_Paper_Digital_Payamet_ Before_During_and_After_Demonetisation," January 2018. [Online]. Available: https://www.researchgate.net/publication/322477150_Paper_Digital_Payamet_Before_During_a nd_After_Demonetisation.

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A Study Of Usage & Security Of The Mobile Payments Services In India [12] "mobile forum of india," [Online]. Available: http://www.mpf.org.in/. [13] "mobile payment application comparision," [Online]. Available: http://www.iamwire.com/2016/11/list-of-mobile-wallets-upi-payment-apps-in-india/145172. [14] R. m. I. C. A. Holly Whitehead, "Understanding the risks of mobile-payments technology," 2016. [Online]. Available: https://www.mobilepaymentstoday.com/articles/understanding-the-risks-ofmobile-payments-technology/. [15] "7 Pros and Cons Of Mobile Payments You Must Know," December,2015. [Online]. Available: https://www.techgyd.com/7-pros-cons-mobile-payments-must-know/17057/.

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A Study Of Usage & Security Of The Mobile Payments Services In India

APPENDIX

Survey Questionnaire 1. Mention your Gender: Male or Female 2. Select your age group: A) < 20 B) 20 to 25 C) 26 to 30 D) 31 to 35 E) 36 to 40 F) 41 to 45 G) 46 to 50 I) > 50 3. Select your occupation: A) Business B) Student/ Research scholar C) Job/service D) Not employed 4. What is your experience in using the mobile payments services: A) < I year B) 1 to 2 years C) > 2 years D) Nil (No experience) 5. Which mobile payments service do you mostly use : _________ 6. Does the app provide confirmation using SMS, email, notification? A) Yes B) No C) Don’t know 7. Does the app track & warn user, in case of unusual transaction pattern? A) Yes B) No C) Don’t know 8. Does the app have auto/session logout feature ? A) Yes B) No C) Don’t know 9. Whether every transaction is carried using unique password/biometrics & with explicit consent? A) Yes B) No C) Don’t know 10. Does the app provide account Statement ? A) Yes B) No C) Don’t know 11. Can each transaction be identified by transaction_id ? A) Yes B) No C) Don’t know 12. Is the app available in other language except English ? A) Yes B) No C) Don’t know 13. Are other modes like SMS or voicecall available to customers who do not have internet facility? A) Yes B) No C) Don’t know 52 | P a g e

A Study Of Usage & Security Of The Mobile Payments Services In India 14. Do you think that the apps ask for access permissions to more number of fields during installation? A) Yes B) No C) Don’t know 15. According to you which is the most important factor in using the mobile payments services? A) 24x 7 access B) Discounts & Rewards C) User friendliness D) E) Other _______ 16. What is the most common purpose for using the mobile payments services? A) Shopping/Purchasing B)Bill Payments C) Funds Transfer D) Account Statement/ Balance Inquiry E) Other_______ 17. How many times at least do you use the mobile payment services? A) Daily B) weekly C) Monthly C) Yearly 18. How much money do you spend monthly using the mobile payments services? A) < 500 B) 500 to 1000 C) 1001 to 1500 D) 1501 to 2000 E) > 2000 19. For non users, what is the reason for not using the mobile payments services? A) Lack of knowledge B) Unavailibility of smartphone C) No need D) Security concerns E) Other___________

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