Adoption of Digital Wallets by Petty Vendors Post Demonetisation in India: A Prediction Approach

Abstract

Purpose: Demonetisation of ₹500 and ₹1000 currency notes by Government of India brought a major hit to Indian market, especially to petty vendors dealing with small monetary transactions. The study brings out a model for predicting vendors‟ decision to switch to digital wallets for payments.

Design/Methodology/Approach: An empirical approach was adopted to collect data about demographic and purchase behaviour from a sample of 223 petty vendors in two Indian cities. Decision Tree algorithm was adopted under classification approach to predict the switching behaviour of vendors to digital wallets.

Findings: The study examines the benefits and challenges experienced by petty vendors while adopting digital wallet as a payment method. The study validates the fact from literature that demographics and infrastructural capabilities have an impact on technology adoption by citizens.

Research limitations/implications: The study was conducted during the cash crunch soon after demonetisation. There could be variation in the economic conditions increasing cash availability.

Practical implications: The study brings out factors that will impact the adoption of digital wallets by petty vendors. The results would help Governments build infrastructural capabilities to motivate citizens adopt digital payments.

Social implications: The challenges highlighted in the study could be looked into and changes brought into the ecosystem of payments to promote cashless payment improving transparency in transactions.

Originality/Value: The study is one of its kind where classification approach is adopted to predict the switching behaviour of citizens towards digital wallets. The challenges highlighted in the study would help Governments bring in changes in payment methodologies to improve transparency in transactions.