Adoption of Mobile Banking with Reference to UPI System in India- An Application of Diffusion of Innovation Model

Abstract

Mobile banking is an innovative channel which provides various services to its customer in the era of cashless transactions and under the campaign of Digital India. Many banks have started offering banking services through mobile phones yet the penetration of smart cards and digital payments is still low in India. The research attempts to study adoption of m-banking among consumers focusing majorly on the contemporary system of e-transactions that is UPI (Unified Payment interface). It is a system having several merging features of multiple banks, merchant payments and seamless fund routing under a single head. It is a cross sectional study that explains the consumer’s behaviour in terms of various aspects of the Diffusion of Innovation theory propounded by Everett Roger in 1962. There are five major aspects of the DOI theory these are observerability, compatibility, relative advantage, triability and complexity. This study is a practical research work where in an structured questionnaire was administered on 184 actual users of M-banking. It concludes that relative advantage, observerability, compatibility are major inducing factors affecting the use of Mobile banking whereas triability and complexity have lesser noteworthy impact on its adoption. The study has explored these factors that has proven useful for the bankers to frame services related to Digital banking. Therefore, this study has practical implications in the banking industry in India.