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INDEX OF CASHLESS TRANSACTION
Sancharita DattaUGC-SRF Ph.D. Research Scholar, Department of Economics
Jadavpur University, Kolkataand
Prof. Malabika Roy Department of Economics, Jadavpur University
-
What is Cashless Transaction?
• Exchange of goods and services and transfer of money from one to other, without the use of currencies but using the financial transaction system provided by the financial institutions.
-
WHY CASHLESS TRANSACTION?
• Lower transaction cost (from consumer side)
• Reduce cost of production of coins and currencies
• Reduce potential of black money
• Transparency in business accounts will help in collection of taxes.
-
GOVT. INITIATIVES (POST DEMONETIZATION)
• Unstructured Supplementary Service Data (USSD)
• Aadhar Enabled Payment system (AEPS)
• Digital Finance for Rural India: Creating Awareness and access through CSCs’
• 0.75% Discount on purchase of petrol/ diesel if payment is made through digital means.
• Development of 2 POS devices each in 1 lakh villages with population less than 10,000, through NABARD.
-
GOVT. INITIATIVES (POST DEMONETIZATION)
• Issuing of ‘Rupay Kisan Cards’ to 4.32 crore Kisan Credit Card holder to make digital transaction.
• MDR charges shall be borne by the Govt. for the transaction under 2000.
• Discount of 10% at Toll Plazas on NH for the payments using cards.
-
Why Need an Index?
• Demand Deposit with banks as a proportion of money supply is not a better way
• To define the extent of cashless transaction differently.
-
LITERATURE • Humphrey, Pulley and Vesala (1996) did a comparative study
between cash paper payment and electronic payments, theyanalyzed the pattern of payment instruments use over time forfifteen countries
• Westland, Kwok, Shu, Kwok, Henry Ho (1998) have done an analysison the acceptance of electronic cash (Mondex e cash) among thecustomers and merchants of the Hong Kong.
• Humphrey, Kim and Vale(2001), havedonea study of usage ofelectronic payments over cashbetween U.S, Europe, Norway andJapan on the basis of Cash to GDP ratio and number of noncashtransactions per persons.
-
Method • Exogenous effects
• Volume and value of the cashless transaction can increase due to the increase in the adult population.
• we have considered Per Capita volume of the cashless transaction as well as per capita value of the cashless transaction.
• The value of the cashless transaction can be increased because of the increase in the overall price level or production.
• We have considered Value of the cashless transaction as a proportion GDP
-
METHOD
• The Indexes, which we have considered for our analysis, are:
• Per Capita Volume Index of The Cashless Transaction.
• Per Capita Value Index of The Cashless Transaction.
• Value of The Cashless transaction as a proportion of GDP Index.
-
INDIVIDUAL DIMENSION INDEX
• We have used Mandira Sharma’s multidimensional index(2010)
• ith dimension index is computed using the followingformula.
• 𝑥𝑥𝑖𝑖 = actual value of the dimension• 𝑀𝑀𝑖𝑖 = maximum value of the dimension (sample maximum)• 𝑚𝑚𝑖𝑖 = minimum value of the dimension (sample minimum)
−−
=ii
iii mM
mxd
Unit free Bounded Homogeneous Monotonic
-
AGGREGATE INDEX
• By averaging all the normalized dimensions with weights we get our desired index.
• Where k = no. of dimensions,wi = Weights (using Principal Component Analysis)
• And rest of the symbols have their previous meaning
• For structural breaks we have used Cusum Test
∑=
−−
=k
i ii
iiikr mM
mxwdddI1
21 ],....,[
-
THE DIMENSIONS OF PER CAPITA VOLUME INDEX:
• The No. of cards per adult population
• The number of POS transaction (with debit and credit cards) per adult population.
• The number of NEFT transaction per adult population
• The number of RTGS transaction per adult population.
• The number of IMPS transaction per adult population.
• The number of ECS Debit & Credit +NACH transaction per adult population.
-
DIMENSIONS OF PER CAPITA VALUE INDEX
• Amount of POS transaction per adult population.
• Amount of NEFT transaction per adult population.
• Amount of RTGS transaction per adult population.
• Amount of IMPS transaction per adult population.
• Amount of ECS debit & credit + NACH transaction per adult population.
-
DIMENSIONS OF VALUE AS A PROPORTION OF GDP INDEX
• Amount of POS transaction as a proportion of GDP.
• Amount of NEFT transaction as a proportion of GDP.
• Amount of RTGS transaction as a proportion of GDP.
• Amount of IMPS transaction as a proportion of GDP.
• Amount of ECS debit & credit + NACH transaction as a proportion of GDP.
-
DATA SOURCE AND TYPE
Data Title Data Source1. Bank-wise value and volume of the electronic
transaction over the months RBI
2. Bank- Wise value and volume of NEFT, RTGS, Mobile Banking transaction over the months
RBI
3. Quarterly GDP data and growth rate (Expenditure approach, seasonally adjusted, at
constant prices (2011-12))
OECD
4. Adult Population Data (from the age group of 15 and above)
World Bank
• We have done the analysis on Indian economy overtime.• Month wise analysis• Total 76 time points from Sep 2012 to Dec 2018
-
MONTHLY GDP CALCULATION• Monthly growth rate (r) = quarterly growth rate/3• We assume the GDP has grown at this constant growth rate r so
• Where y1 = monthly GDP of 1st financial monthy2 = monthly GDP of 2nd financial monthy3 = monthly GDP of 3rd financial month
Such that 1st quarter GDP Q1 = y1 + y2 + y3.
Similarly we have the values of other months’ GDP
-
Per Capita Volume Index
0
0.2
0.4
0.6
0.8
1
1.2
2012
Nov
2013
Feb
2013
May
2013
Aug
2013
Nov
2014
Feb
2014
May
2014
Aug
2014
Nov
2015
Feb
2015
May
2015
Aug
2015
Nov
2016
Feb
2016
May
2016
Aug
2016
Nov
2017
Feb
2017
May
2017
Aug
2017
Nov
2018
Feb
2018
May
2018
Aug
2018
Nov
-40
-20
0
20
40
60
80
5 10 15 20 25 30 35 40 45 50 55 60 65 70
CUSUM 5% Significance
Dependent Variable: _N_PER_CAPITA_VOLUME_IND
Method: Least Squares
Date: 11/14/19 Time: 17:51
Sample: 1 74
Included observations: 74
Variable
Coefficient
Std. Error
t-Statistic
Prob.
TIMES
0.013777
0.000272
50.56951
0.0000
C
-0.104671
0.011758
-8.902426
0.0000
R-squared
0.972616
Mean dependent var
0.411971
Adjusted R-squared
0.972236
S.D. dependent var
0.300431
S.E. of regression
0.050060
Akaike info criterion
-3.124549
Sum squared resid
0.180429
Schwarz criterion
-3.062277
Log likelihood
117.6083
Hannan-Quinn criter.
-3.099708
F-statistic
2557.275
Durbin-Watson stat
0.129931
Prob(F-statistic)
0.000000
-
Per Capita Value Index
0
0.2
0.4
0.6
0.8
1
1.2
2012
Nov
2013
Feb
2013
May
2013
Aug
2013
Nov
2014
Feb
2014
May
2014
Aug
2014
Nov
2015
Feb
2015
May
2015
Aug
2015
Nov
2016
Feb
2016
May
2016
Aug
2016
Nov
2017
Feb
2017
May
2017
Aug
2017
Nov
2018
Feb
2018
May
2018
Aug
2018
Nov
-30
-20
-10
0
10
20
30
40
5 10 15 20 25 30 35 40 45 50 55 60 65 70
CUSUM 5% Significance
Dependent Variable: _N_PER_CAPITA_VALUE_INDE
Method: Least Squares
Date: 11/08/19 Time: 15:10
Sample: 1 74
Included observations: 74
_N_PER_CAPITA_VALUE_INDE = C(1)*TIMES + C(2)*TIMES^2 + C(3)
Coefficient
Std. Error
t-Statistic
Prob.
C(1)
-0.002912
0.000637
-4.571322
0.0000
C(2)
0.000209
8.23E-06
25.42146
0.0000
C(3)
0.062574
0.010352
6.044544
0.0000
R-squared
0.990310
Mean dependent var
0.343077
Adjusted R-squared
0.990037
S.D. dependent var
0.289388
S.E. of regression
0.028885
Akaike info criterion
-4.211262
Sum squared resid
0.059240
Schwarz criterion
-4.117854
Log likelihood
158.8167
Hannan-Quinn criter.
-4.174000
F-statistic
3628.007
Durbin-Watson stat
0.621307
Prob(F-statistic)
0.000000
-
Value/GDP Index
0
0.2
0.4
0.6
0.8
1
1.2
2012
Nov
2013
Feb
2013
May
2013
Aug
2013
Nov
2014
Feb
2014
May
2014
Aug
2014
Nov
2015
Feb
2015
May
2015
Aug
2015
Nov
2016
Feb
2016
May
2016
Aug
2016
Nov
2017
Feb
2017
May
2017
Aug
2017
Nov
2018
Feb
2018
May
2018
Aug
2018
Nov
-30
-20
-10
0
10
20
30
40
5 10 15 20 25 30 35 40 45 50 55 60 65 70
CUSUM 5% Significance
Dependent Variable: VALUEGDP_R_1_N_
Method: Least Squares
Date: 11/08/19 Time: 15:12
Sample: 1 74
Included observations: 74
Variable
Coefficient
Std. Error
t-Statistic
Prob.
TIMES
-0.003030
0.000942
-3.218286
0.0019
TIMES^2
0.000203
1.22E-05
16.66194
0.0000
C
0.109070
0.015302
7.127798
0.0000
R-squared
0.977045
Mean dependent var
0.372986
Adjusted R-squared
0.976398
S.D. dependent var
0.277924
S.E. of regression
0.042697
Akaike info criterion
-3.429669
Sum squared resid
0.129437
Schwarz criterion
-3.336261
Log likelihood
129.8977
Hannan-Quinn criter.
-3.392407
F-statistic
1510.987
Durbin-Watson stat
0.586894
Prob(F-statistic)
0.000000
-
FINDINGS (Individual dimension wise)
No. of Cards/1000 adults No. of POS/Adult Population No. of NEFT/Adult Population
No. of RTGS/Adult Population
No. of IMPS/ Adult Population No. of IMPS/Adult Population
0
0.2
0.4
0.6
0.8
1
1.2
2012
Nov
2013
Apr
2013
Sep
2014
Feb
2014
Jul
2014
Dec
2015
May
2015
Oct
2016
Mar
2016
Aug
2017
Jan
2017
Jun
2017
Nov
2018
Apr
2018
Sep
0
0.1
0.2
0.3
0.4
0.5
0.6
2012
Nov
2013
Apr
2013
Sep
2014
Feb
2014
Jul
2014
Dec
2015
May
2015
Oct
2016
Mar
2016
Aug
2017
Jan
2017
Jun
2017
Nov
2018
Apr
2018
Sep 0
0.05
0.1
0.15
0.2
0.25
2012
Nov
2013
Apr
2013
Sep
2014
Feb
2014
Jul
2014
Dec
2015
May
2015
Oct
2016
Mar
2016
Aug
2017
Jan
2017
Jun
2017
Nov
2018
Apr
2018
Sep
0
0.002
0.004
0.006
0.008
0.01
0.012
0.014
2012
Nov
2013
Apr
2013
Sep
2014
Feb
2014
Jul
2014
Dec
2015
May
2015
Oct
2016
Mar
2016
Aug
2017
Jan
2017
Jun
2017
Nov
2018
Apr
2018
Sep
0
0.02
0.04
0.06
0.08
0.1
0.12
0.14
0.16
0.18
2012
Nov
2013
Apr
2013
Sep
2014
Feb
2014
Jul
2014
Dec
2015
May
2015
Oct
2016
Mar
2016
Aug
2017
Jan
2017
Jun
2017
Nov
2018
Apr
2018
Sep
0
0.05
0.1
0.15
0.2
0.25
0.3
2012
Nov
2013
Apr
2013
Sep
2014
Feb
2014
Jul
2014
Dec
2015
May
2015
Oct
2016
Mar
2016
Aug
2017
Jan
2017
Jun
2017
Nov
2018
Apr
2018
Sep
-
FINDINGS (Individual dimension wise)
Amount of POS/ Adult Population
Amount of NEFT/Adult Population
Amount of RTGS/Adult Population
Amount of IMPS/Adult Population
Amount of ECS+NACH/ Adult Population
0
200
400
600
800
1000
1200
2012
Nov
2013
Apr
2013
Sep
2014
Feb
2014
Jul
2014
Dec
2015
May
2015
Oct
2016
Mar
2016
Aug
2017
Jan
2017
Jun
2017
Nov
2018
Apr
2018
Sep
0
5000
10000
15000
20000
25000
2012
Nov
2013
Apr
2013
Sep
2014
Feb
2014
Jul
2014
Dec
2015
May
2015
Oct
2016
Mar
2016
Aug
2017
Jan
2017
Jun
2017
Nov
2018
Apr
2018
Sep 0
20000
40000
60000
80000
100000
120000
140000
2012
Nov
2013
Apr
2013
Sep
2014
Feb
2014
Jul
2014
Dec
2015
May
2015
Oct
2016
Mar
2016
Aug
2017
Jan
2017
Jun
2017
Nov
2018
Apr
2018
Sep
0
200
400
600
800
1000
1200
1400
1600
2012
Nov
2013
Apr
2013
Sep
2014
Feb
2014
Jul
2014
Dec
2015
May
2015
Oct
2016
Mar
2016
Aug
2017
Jan
2017
Jun
2017
Nov
2018
Apr
2018
Sep
0
200
400
600
800
1000
1200
1400
1600
2012
Nov
2013
Apr
2013
Sep
2014
Feb
2014
Jul
2014
Dec
2015
May
2015
Oct
2016
Mar
2016
Aug
2017
Jan
2017
Jun
2017
Nov
2018
Apr
2018
Sep
-
FINDINGS (Individual dimension wise)
Amount of POS/ GDP Amount of NEFT/ GDP Amount of RTGS/ GDP
Amount of IMPS/ GDP Amount of ECS+NACH/ GDP
00.010.020.030.040.050.060.070.080.09
0.1
2012
Nov
2013
Apr
2013
Sep
2014
Feb
2014
Jul
2014
Dec
2015
May
2015
Oct
2016
Mar
2016
Aug
2017
Jan
2017
Jun
2017
Nov
2018
Apr
2018
Sep
00.20.40.60.8
11.21.41.61.8
2012
Nov
2013
Apr
2013
Sep
2014
Feb
2014
Jul
2014
Dec
2015
May
2015
Oct
2016
Mar
2016
Aug
2017
Jan
2017
Jun
2017
Nov
2018
Apr
2018
Sep
0
2
4
6
8
10
12
2012
Nov
2013
Apr
2013
Sep
2014
Feb
2014
Jul
2014
Dec
2015
May
2015
Oct
2016
Mar
2016
Aug
2017
Jan
2017
Jun
2017
Nov
2018
Apr
2018
Sep
0
0.02
0.04
0.06
0.08
0.1
0.12
0.14
2012
Nov
2013
Apr
2013
Sep
2014
Feb
2014
Jul
2014
Dec
2015
May
2015
Oct
2016
Mar
2016
Aug
2017
Jan
2017
Jun
2017
Nov
2018
Apr
2018
Sep
0
0.02
0.04
0.06
0.08
0.1
0.12
0.14
2012
Nov
2013
Apr
2013
Sep
2014
Feb
2014
Jul
2014
Dec
2015
May
2015
Oct
2016
Mar
2016
Aug
2017
Jan
2017
Jun
2017
Nov
2018
Apr
2018
Sep
-
FINDINGS (Individual dimension wise)
No. of Cards/ Adults Population
No. of POS/ Adult Population No. of NEFT/ Adult Population
No. of RTGS/Adult Population No. of IMPS/ Adult Population No. of ECS+NACH/AdultPopulation
-30
-20
-10
0
10
20
30
40
50
5 10 15 20 25 30 35 40 45 50 55 60 65 70
CUSUM 5% Significance
-30
-20
-10
0
10
20
30
40
50
60
5 10 15 20 25 30 35 40 45 50 55 60 65 70
CUSUM 5% Significance
-30
-20
-10
0
10
20
30
40
5 10 15 20 25 30 35 40 45 50 55 60 65 70
CUSUM 5% Significance
-30
-20
-10
0
10
20
30
5 10 15 20 25 30 35 40 45 50 55 60 65 70
CUSUM 5% Significance
-30
-20
-10
0
10
20
30
40
50
5 10 15 20 25 30 35 40 45 50 55 60 65 70
CUSUM 5% Significance
-30
-20
-10
0
10
20
30
40
5 10 15 20 25 30 35 40 45 50 55 60 65 70
CUSUM 5% Significance
-
FINDINGS (Individual dimension wise)
Amount of POS/ Adults Population
Amount of NEFT/ Adult Population
Amount of RTGS/ Adult Population
Amount of IMPS/ Adult Population Amount of ECS+NACH/Adult Population
-30
-20
-10
0
10
20
30
40
50
60
5 10 15 20 25 30 35 40 45 50 55 60 65 70
CUSUM 5% Significance
-30
-20
-10
0
10
20
30
5 10 15 20 25 30 35 40 45 50 55 60 65 70
CUSUM 5% Significance
-30
-20
-10
0
10
20
30
5 10 15 20 25 30 35 40 45 50 55 60 65 70
CUSUM 5% Significance
-30
-20
-10
0
10
20
30
40
50
60
5 10 15 20 25 30 35 40 45 50 55 60 65 70
CUSUM 5% Significance
-30
-20
-10
0
10
20
30
40
5 10 15 20 25 30 35 40 45 50 55 60 65 70
CUSUM 5% Significance
-
FINDINGS (Individual dimension wise)
Amount of POS/ GDP Amount of NEFT/ GDP Amount of RTGS/ GDP
Amount of IMPS/ GDP Amount of ECS+NACH/GDP
-30
-20
-10
0
10
20
30
40
50
60
5 10 15 20 25 30 35 40 45 50 55 60 65 70
CUSUM 5% Significance
-30
-20
-10
0
10
20
30
40
50
60
5 10 15 20 25 30 35 40 45 50 55 60 65 70
CUSUM 5% Significance
-30
-20
-10
0
10
20
30
5 10 15 20 25 30 35 40 45 50 55 60 65 70
CUSUM 5% Significance
-30
-20
-10
0
10
20
30
40
50
5 10 15 20 25 30 35 40 45 50 55 60 65 70
CUSUM 5% Significance
-30
-20
-10
0
10
20
30
5 10 15 20 25 30 35 40 45 50 55 60 65 70
CUSUM 5% Significance
-
CONCLUSION
• Per capita volume of the cashless transaction increases significantly from January 2015,
• but the per capita value of the cashless transaction and value as a proportion of GDP has increased after demonetization period but the effects are not enough satisfactory.
• So post demonetization policies have a positive impact on the value of the cashless transaction rather volume.
-
CONCLUSION
• Only POS transaction and IMPS transaction significantly increases after the demonetization period.
• The effect are very slightly and the increments are not that as expected.
-
THANK YOU….
INDEX OF CASHLESS TRANSACTIONWhat is Cashless Transaction?WHY CASHLESS TRANSACTION?GOVT. INITIATIVES (POST DEMONETIZATION)GOVT. INITIATIVES (POST DEMONETIZATION)Why Need an Index?LITERATURE Method METHODINDIVIDUAL DIMENSION INDEXAGGREGATE INDEXTHE DIMENSIONS OF PER CAPITA VOLUME INDEX:DIMENSIONS OF PER CAPITA VALUE INDEXDIMENSIONS OF VALUE AS A PROPORTION OF GDP INDEXDATA SOURCE AND TYPEMONTHLY GDP CALCULATIONPer Capita Volume IndexPer Capita Value IndexValue/GDP IndexFINDINGS (Individual dimension wise)FINDINGS (Individual dimension wise)FINDINGS (Individual dimension wise)FINDINGS (Individual dimension wise)FINDINGS (Individual dimension wise)FINDINGS (Individual dimension wise)CONCLUSIONCONCLUSIONTHANK YOU….
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