Personal Finance Survey is an initiative by D91 Labs to understand the financial choices made by people in India. The survey questionnaire was designed and circulated in April 2020. A total of 452 responses were recorded. The survey was conducted during the month of April 2020 during the lockdown.
In this article, we’ll talk about the insights we gathered from the survey with respect to banking & payments.
Bank accounts:
We started by understanding how many active bank accounts did each participant have.
To understand if there was a correlation between the number of bank accounts and the income bracket, we superimposed the income level on to the bank account holding.
- On an average majority of the participants (42% of overall participants) held a minimum of two bank accounts irrespective of their income bracket.
- Around 42.17% of the participants within the <5 LPA income group had merely one bank account, which is the highest compared to other income brackets.
- Under the 3 bank accounts category, 10–20 LPA bracket participants had had the maximum with 28.68% of them having 3 bank accounts.
- For 80% of the respondents, bank account benefits like Debit card, credit card, net banking facility etc. is the most important factor for choosing a bank account.
- One could say that for most people having a seamless net banking, debit and credit card facility is essential when it comes to banking, especially with the younger audience.
Debit Cards
Debit card holding by income levels:
- 36% of the total respondents have 2 debit cards.
- Around 50% of those earning less than 5 LPA have 1 debit card while most in other income ranges have 2 or more than 2 debit cards.
- This is in line with the fact that most people who earn less than 5 LPA have only one bank account.
- With digital payments coming into the picture, the frequency of ATM visits has reduced considerably.
- Most people prefer to withdraw a fixed amount at the beginning of the month to manage everyday expenses.
- Now, cash is being used as a backup payment mode in places where we cannot make a payment digitally through a debit card or a credit card.
Credit Cards
Active credit card by income levels:
- 60% of the respondents who earn less than 5 LPA do not have a credit card while only 10% of respondents who earn more than 20 LPA who don’t have a credit card.
- An average of 1 to 2 credit cards is maintained for higher income ranges.
- Most people do not want to get a credit card due to the fear of not being able to control their expenses but those who do, use it excessively for offers and rewards.
- Majority of people still pays credit card bills manually instead of choosing auto-debit.
- Paying credit bill manually gives individuals a sense of control over their expenses. (Our derivation based on our previous qualitative interviews)
Net banking
- Majority of people use net banking regularly through the web or mobile app.
- Mostly, they use net banking to check balance, bank account statements and to make bank account transfer of higher amounts. This has affected passbook usage drastically.
Cheque book and Passbook
- The majority owns a chequebook but they use it only to issue cancelled cheques when in need.
- People use NEFT/IMPS for making transactions of higher amounts as opposed to issuing a cheque physically.
- A cheque is issued only when there is no other way to make the payment.
- Traditionally, a bank account passbook was used to keep track of credit, debit and expenses.
- Currently, most people either do not have a passbook or do not update it regularly even if they have it, they use net banking to check their bank statements and keep a track of their expenses.
- Though 33% of our respondents consider ‘Branch and ATM access’ an important factor in choosing a bank account, most people avoid visiting a bank branch unless it is absolutely necessary.
Payments
- Though a good number of people had started using UPI payments before the deadly coronavirus came into the picture, UPI usage has gone up significantly post lockdown as people prefer using contactless payment methods wherever possible.
- UPI followed by credit card payment are the most frequently used payment methods.
- Usage of cash as a payment method is decreasing with increase in income range with the usage of credit card is increasing.
- UPI one of the most preferred payment modes for all income groups.
Less than 5 LPA — UPI followed by cash is the most preferred payment mode. Credit card and NEFT/IMPS is hardly used by this income range.
5–10 LPA — UPI is the most preferred payment mode for this income range as well. We can see that the debit card and a credit card are equally popular.
10–20 LPA — There is a significant increase in credit card usage for this income range while UPI is still the most preferred payment mode.
More than 20 LPA — Credit card is the most preferred payment mode for this income range followed by UPI.
Electricity — Most preferred payment mode for electricity is UPI followed by credit card payment.
Rent — Rent is paid through NEFT/IMPS by most due to the large ticket size.
Broadband & DTH — UPI followed by credit card are the most preferred payment modes.
Mobile Recharge — UPI is the most preferred payment mode for mobile recharge due to the small ticket size of payments.
Subscriptions — Majority pays their subscription bills using a credit card.
Water & Gas Bills — Cash is the most used payment mode for water and gas bills because of the lack of payment options for these.
For utility payments, credit card usage increases with increase in income while usage of cash decreases. NEFT/IMPS is being used for transferring large amounts like rent.
Read the other parts of the analysis here:
Credits:
Questionnaire designed by Dharmesh Ba & Soumitro Datta
Analysis & visuals by Geetika Shukla
Read our research series
About D91 labs
This research was executed and documented by D91 Labs. D91 Labs is an open-source initiative by setu.co to help Bharat build great fintech products. We organize and publish user research, insights, and frameworks for fintech in India. Please follow us on medium for more exciting stories and insights on Bharat.
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