Adoption of payments banks: a grounded theory approach

Abstract

Payments banks came into existence in India in 2015 when the Reserve Bank of India awarded licenses to eleven applicants to set up these banks specifically to further financial inclusion by providing small savings accounts and facilitating payments and remittances to the financially excluded population. As of March 2020, only six of these were operative and not very successful, both from the profitability and customer growth perspectives. This article seeks to understand the reason for payments banks not taking off as envisaged. Attributing this primarily to low adoption of payments banks by the financially excluded customer segments, this study uses a grounded theory approach based on data collected from interviews of target customer groups and of managers at some payments banks. The primary factors contributing to low adoption by the customer segments studied here, namely migrant labor and small vendors, have been identified as lack of awareness, lack of trust and lack of perceived need for their products/services. These factors arise due to inconsistencies between the business model design and the nature of the target audience. The article further discusses managerial and policy implications of these conclusions.

Analysis of the Application of the Principles of Business Ethics in Islam

“…3) Using Bank Account Transfer Payment for the purchase of goods is paid by transferring cash between banks. Buyers make cash transfers through banks and may also go through ATMs and buyers make interbank transfers using the internet banking method, which means transferring to a bank account via the internet (Pramani & Iyer, 2023;Tiliwalidi dkk., 2019). 4) Using a Virtual Wallet, which means a place to store money in cyberspace, works the same way as a debit card (Prieto-Torres & Galpin, 2020).…”

Integration of Payment Banks into Daily Life in Delhi NCR

“…Section 5 presents the study's results, and Section 6 concludes the study. (Pramani & Iyer, 2023) The research delves into why Indian payment banks have struggled to promote financial inclusion effectively. By March 2020, only six of the eleven licensed payment banks were operational, facing challenges in profitability and client growth.…”

Conceptualising Sustainability in the Fintech Sector

“…Bhal and Leekha used grounded theory to gain a better understanding of moral logic and software piracy (Bhal and Leekha, 2008). Pramani and Iyer found a gap in the understanding of why the adoption of payment banks in India is not growing as fast as was expected and used grounded theory to reveal some answers (Pramani and Iyer, 2022).…”

“…Due to their exploratory nature, structured interviews are not optimal for GT (Duffy et al, 2004;Charmaz, 2006;Breckenridge, 2014). Unstructured and semi-structured interview designs are both suitable for use with grounded theory, and there are numerous examples of semistructured interviews in GT (Solt, 1998;Bhal and Leekha, 2008;Stoeckli et al, 2018, Pramani andIyer, 2022).…”