Sustainability of Digital Payments: Empirical Evidence from India

DOI

10.2991/ahsseh.k.220105.009How to use a DOI?

Keywords

Digital payments; Digital payment infrastructure; autoregressive distributed lag model; financial inclusion; Sustainable Developmental Goals

Abstract

The digital financial services like mobile money, digital payments, and newer digital payment systems or financial technologies when rendered productively and responsively in a structured environment, will enable growth and faster achievement of Sustainable Development Goals (SDGs) for a country. In recent years, the digital payment transactions in India have seen exponential growth in India due to massive drive by the Government of India’s “Digital India” programme. Further, in India, using digital payment systems has become cost effective. Simultaneously, however, the growth of currency demand has also increased tremendously in the country. There is thus a need to understand whether the digital payments are sustainable in India. This study thus tries to investigate the reasons resulting to sustainability of digital payments over the period of 2011-12: Q1-2020-21: Q1. To explore this relationship, the study uses autoregressive distributed lag model (ARDL) bounds test to cointegration along with Dynamic ordinary least square method (DOLS). Empirical evidence revealsthat national income and economic shocks (demonetisation and pandemic) have significant positive on sustainability of digital payment transactions both in value and volume terms, whereas mobile payments are substitutes and hence negatively affect digital payments. Surprisingly, financial inclusion (proxied by the growth in bank accounts) is not found to have any role in sustainability of digital payments. Insights from the results signify impact on development in the direction of growing need for financial exposure by way of financial literacy and rising economic growth using positive shocks to advance digital payments in India.

Copyright

© 2022 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article under the CC BY-NC license.

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TY  - CONF
AU  - Vandana Bhavsar
AU  - Pradeepta Kumar Samanta
PY  - 2022
DA  - 2022/01/18
TI  - Sustainability of Digital Payments: Empirical Evidence from India
BT  - Proceedings of the 2nd International Conference on Sustainability and Equity (ICSE-2021)
PB  - Atlantis Press
SP  - 70
EP  - 78
SN  - 2667-128X
UR  - https://doi.org/10.2991/ahsseh.k.220105.009
DO  - 10.2991/ahsseh.k.220105.009
ID  - Bhavsar2022
ER  -