A Study on Customer Preference Towards Usage of Debit Card in Ahmedabad City

Customers have started preferring paying through debit cards amongst all the other plastic money options, especially after demonetization. Debit cards have various other facilities—it can be used to withdraw cash from an ATM, purchase of goods and services at point of sale, and make payments for e-commerce online transactions, both inland and foreign. Yet, what is unknown is the pattern of debit card preferred by the customers and the reason they prefer a debit card over the other payment options. In this paper, the authors investigate the customer preference over the different payment options, the factors affecting debit card usage, the frequency, the charges and the reason for using debit cards post demonetization. The authors have also compared debit cards with credit cards and net banking on various parameters. Additionally, the study also attempts to understand the impact of the frequency of usage of debit card, the bank issuing the debit card, the number of transactions and the charges on the upgradation of the debit cards. This study is conducted on 125 respondents of Ahmedabad who use debit cards of four banks (based on their market capitalization)—ICICI Bank, Kotak Mahindra Bank, State Bank of India and Bank of Baroda—selected by means of non-probability convenience sampling. The results of the study state that customers prefer using debit card, and its accessibility will create a high competitive pressure on other payment options. The authors conclude that debit cards are increasingly being accepted and are extremely popular amongst the customers, but it is underutilized as not many offers given by the banks are highlighted or understood by the customers.