Understanding the Pros and Cons of Digital Payments in Indian Economy: A PLS-SEM Approach

Abstract

In a cashless economy, all financial dealings are conducted through the use of credit cards, debit cards, or other forms of electronic payment. There is a little amount of actual currency now in circulation. Transactions in India typically involve a disproportionately large quantity of cash. This is a significant challenge for the nation. It is essential to keep in mind that in order to achieve the transition to a cashless society, a nation requires not just high-speed internet but also solid cyber security measures. Given the country's low standing in the global cyber stakes, the primary objective of demonetization is to promote the adoption of digital transactions as an alternative to conventional ones. This is due to the fact that traditional transactions involve the exchange of physical currency. In order to ensure the safety of monetary dealings conducted online, several authorities in the area are of the opinion that the government should boost the amount of money it spends on infrastructure while simultaneously increasing the amount of oversight it exercises over the industry as a whole. At this time, India is ranked as the sixth most prolific nation for cybercrime in the world. Digital payment systems have developed, first attracting the wary interest of customers and industry professionals owing to the disruption that these systems promised to produce in the well-established e-commerce business. As its renown increased, academics started to describe it in a variety of different ways, with a focus on subjects as varied as business, information technology, accounting, and finance. According to the definition provided by Briggs and Brooks (2011), digital payment is a method of conducting electronic monetary transactions between individuals and financial institutions that is supported and facilitated by banking institutions. According to the definition provided by Peter and Babatunde (2012), an electronic method of making a payment, concluding a transaction, or moving money from one account to another is referred to as a digital payment.