Author(s) :   Poonum S. Raibagi¹, O N Mohammed Rayan²

Abstract : This study Analyses consumer behaviour and preferences for online versus traditional payment methods in small business transactions in India, focusing on a sample of 120 respondents, primarily young, mostly young low-income students. Following a descriptive research design, data were gathered through structured questionnaires and statistically analyzed using measures such as frequency distributions, percentages, cross-tabulations, and ANOVA. Findings show a high demand for cash (80%) among offline modes because of its acceptance everywhere and perceived safety, followed by UPI (48%) and digital wallets (24%) in online payments because of convenience and speed. Convenience (47%) and security (30%) are the major drivers of payment decisions, with 79% appreciating multiple payment options and 62% changing businesses because preferred modes are not available. Security issues remain, with 58% experiencing online payment problems such as failed transactions. The report indicates a shift in generations to digital payments, with 61% anticipating eventual dominance by online means, but 53% foreseeing coexistence with legacy methods. The report suggests the implementation of hybrid payment systems, improving online security, and the provision of incentives to encourage digital uptake while leaving cash in place for inclusivity. These observations inform small businesses on how to maximize payment strategies to maximize customer satisfaction and customer retention.

Keywords: Consumer Behaviour, Payment Preferences, Small Businesses, India, UPI, Digital Wallets, Cash Payments, Payment Flexibility, Security Concerns, Customer Retention.

DOI: 10.61161/ijarcsms.v13i5.10

Pages : 86-93

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