Sustainable Digital Payment Solutions In India: The Interplay Of Customer Acceptance, Technical Advancement, And System Feasibility
DOI:
https://doi.org/10.69980/npgcqy39Keywords:
Sustainable digital payments, Customer acceptance, Technical advancement, System feasibility, Digital payment adoption, IndiaAbstract
Purpose: India’s digital payment ecosystem has expanded rapidly however, the long-term sustainability of card-based and digital payment systems depends on user acceptance, technological robustness, and overall system feasibility. This study examines how customer acceptance of digital payment solutions in India is influenced by customer service quality and technical advancement, and how these factors together support the feasibility and sustainability of digital payment systems.
Methodology: Grounded in the Technology Acceptance Model (TAM) and service quality literature, this study adopts a quantitative research design. Survey data were collected from users of card-based and digital payment systems in India. The key constructs examined include Customer Service Quality, Technical Advancement, and Overall Acceptance. The data were analyzed using variance-based Structural Equation Modelling (SEM) to evaluate both direct and indirect relationships among the study variables.
Findings: The results reveal that Customer Service Quality has a strong positive effect on perceptions of Technical Advancement, indicating that responsive and reliable service interactions enhance users’ confidence in the technological capability of digital payment systems. Technical Advancement, in turn, significantly influences overall customer acceptance. Further analysis confirms that Technical Advancement partially mediates the relationship between Customer Service Quality and acceptance, highlighting the interconnected role of service experience and technology in driving adoption. The model demonstrates high explanatory power, underscoring the importance of these factors in ensuring the feasibility and sustainability of digital payment solutions in India.
Originality/Value: This study adds up to the literature on digital payments by incorporating customer acceptance, technical development, and system feasibility into a sustainability-based framework. It not only offers evidence of how the Indian context works out empirically, but also gives practical advice to policymakers, banks and fintech companies aiming to be able to build resilient, efficient, and user-friendly digital payment ecosystems.
References
Al-Qudah, A. A., Al-Okaily, M., Shiyyab, F. S., Taha, A. A., Almajali, D. A., Masa’deh, R. E., & Warrad, L. H. (2024). Determinants of digital payment adoption among Generation Z: An empirical study. Journal of Risk and Financial Management, 17(11), 521.https://doi.org/10.3390/jrfm17110521
Alrawad, M., Lutfi, A., Almaiah, M. A., & Elshaer, I. A. (2023). Examining the influence of trust and perceived risk on customers intention to use NFC mobile payment system. Journal of Open Innovation: Technology, Market, and Complexity, 9(2), 100070.https://doi.org/10.1016/j.joitmc.2023.100070
Baabdullah, A. M. (2018). Consumer adoption of Mobile Social Network Games (M-SNGs) in Saudi Arabia: The role of social influence, hedonic motivation and trust. Technology in society, 53, 91-102. https://doi.org/10.1016/j.techsoc.2018.01.004
Browne, M. W., & Cudeck, R. (1993). Alternative ways of assessing model fit. In K. A. Bollen & J. S. Long (Eds.), Testing structural equation models (pp. 136–162). Sage.
Chavda, V. (2018). An empirical study on factors affecting consumer adoption of mobile payments in rural area. Sankalpa, 8(1), 64-71.
Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39–50. https://doi.org/10.1177/002224378101800104
Grover, P., Kar, A. K., Janssen, M., & Ilavarasan, P. V. (2019). Perceived usefulness, ease of use and user acceptance of blockchain technology for digital transactions–insights from user-generated content on Twitter. Enterprise Information Systems, 13(6), 771-800. https://doi.org/10.1080/17517575.2019.1599446
Haider, A., Khan, M. A., Khoja, M., Alharthi, S., & Minhaj, S. M. (2024). The role of e-banking, mobile-banking, and e-wallet with response to e-payment and customer trust as a mediating factor using a structural equation modelling approach. Journal of Infrastructure, Policy and Development, 8(9), 6644.
Hu, L. T., & Bentler, P. M. (1999). Cutoff criteria for fit indexes in covariance structure analysis: Conventional criteria versus new alternatives. Structural Equation Modeling: A Multidisciplinary Journal, 6(1), 1–55. https://doi.org/10.1080/10705519909540118
Hussain, S., Gupta, S., & Bhardwaj, S. (2025). Determinants inhibiting digital payment system adoption: an Indian perspective. Qualitative Research in Financial Markets, 17(4), 716-748. https://doi.org/10.1108/QRFM-09-2023-0223
Laukkanen, T. (2016). Consumer adoption versus rejection decisions in seemingly similar service innovations: The case of the Internet and mobile banking. Journal of business research, 69(7), 2432-2439.https://doi.org/10.1016/j.jbusres.2016.01.013
Ly, R., & Ly, B. (2024). Digital payment systems in an emerging economy. Computers in Human Behavior Reports, 16, 100517. https://doi.org/10.1016/j.chbr.2024.100517
Ruiz-Herrera, L. G., Valencia-Arias, A., Gallegos, A., Benjumea-Arias, M., & Flores-Siapo, E. (2023). Technology acceptance factors of e-commerce among young people: An integration of the technology acceptance model and theory of planned behavior. Heliyon, 9(6).
Saxena, N., Gera, N., & Taneja, M. (2023). An empirical study on facilitators and inhibitors of adoption of mobile banking in India. Electronic Commerce Research, 23(4), 2573-2604.DOI https://doi.org/10.1007/s10660-022-09556-6
Shaikh, I. M., & Amin, H. (2024). Consumers’ innovativeness and acceptance towards use of financial technology in Pakistan: extension of the UTAUT model. Information Discovery and Delivery, 52(1), 114-122. https://doi.org/10.1108/IDD-08-2022-0080
Shankar, A., & Datta, B. (2018). Factors affecting mobile payment adoption intention: An Indian perspective. Global Business Review, 19(3_suppl), S72-S89. https://doi.org/10.1177/0972150918757870
Shin, D. H. (2007). User acceptance of mobile Internet: Implication for convergence technologies. Interacting with computers, 19(4), 472-483. https://doi.org/10.1016/j.intcom.2007.04.001
Shree, S., Pratap, B., Saroy, R., & Dhal, S. (2021). Digital payments and consumer experience in India: a survey based empirical study. Journal of Banking and Financial Technology, 5(1), 1-20. DOI https://doi.org/10.1007/s42786-020-00024-z
Singh, S., & Srivastava, R. K. (2018). Predicting the intention to use mobile banking in India. International Journal of bank marketing, 36(2), 357-378. https://doi.org/10.1108/IJBM-12-2016-0186
Sivathanu, B. (2019). Adoption of digital payment systems in the era of demonetization in India: An empirical study. Journal of Science and Technology Policy Management, 10(1), 143-171. https://doi.org/10.1108/JSTPM-07-2017-0033
Talwar, S., Dhir, A., Khalil, A., Mohan, G., & Islam, A. N. (2020). Point of adoption and beyond. Initial trust and mobile-payment continuation intention. Journal of Retailing and Consumer Services, 55, 102086.https://doi.org/10.1016/j.jretconser.2020.102086
Tamilmani, K., Rana, N. P., & Dwivedi, Y. K. (2021). Consumer acceptance and use of information technology: A meta-analytic evaluation of UTAUT2. Information Systems Frontiers, 23(4), 987-1005. DOI https://doi.org/10.1007/s10796-020-10007-6
Tran, V. D. (2020). Assessing the effects of service quality, experience value, relationship quality on behavioral intentions. Journal of Asian Finance, Economics and Business, 7(3), 167-175.
Trivedi, H., & Sanchiher, S. (2023). Challenges in digital payment adoption in India. International Journal of Education, Modern Management, Applied Science & Social Science, 5(2), 32-38.
Tullaili, M., & Susanto, P. (2025). E-Service Quality, Trust, Emotions, and Forgiveness Drive Repurchase in M-Commerce. Academia Open, 10(1), 10-21070.DOI : https://doi.org/10.21070/acopen.10.2025.11162
Tyagi, V. K., Kumar, S., Gulyani, M., & Gahlawat, R. (2023). E-SERV-EX: A Multi-item Scale for Measuring Customer Expectations from the Online Retail Services. NMIMS Management Review, 31(2), 131-144. https://doi.org/10.1177/0971102323119779
Venkatesh, V., Morris, M. G., Davis, G. B., & Davis, F. D. (2021). User acceptance of information technology: toward a unified view. MIS Q. 2003; 27 (3): 425–78.
