Understanding Constrained Users' Experience of UPI-based Digital Payments

CSBC, in partnership with the Future Finance Initiative at Dvara Research, conducted a diagnostic study to understand the experience of constrained users in the digital payments journey and to improve the design and usability of digital payment solutions.

Introduction

The usage of digital payments has been rapidly growing in India, with the Unified Payments Interface (UPI) system serving as a key contributor to this growth. In 2021-2022 alone, transactions conducted digitally increased from ~55.5 billion in the previous year to ~74.2 billion (Buteau, Rao & Valenti, 2021). As the reach of digital payments continues to expand, the experience of specific population segments in the digital payment ecosystem remains grossly under-examined. Specifically, the friction points and challenges faced by those who are more vulnerable and face constraints-users who are late adopters to technology, have low traditional and/or digital literacy, are vulnerable to financial losses and harms, and live in rural areas of low internet penetration or smartphone ownership-are relatively unknown.

To address the gap in research, we developed a foundational understanding of the common needs and challenges of users such as women, migrant workers, and gig workers. We leveraged this understanding to formulate best practices and design principles that improve the digital payment experience, such as simplified digital payment interfaces that reduce the cognitive load of navigating complex products and services.

Our ultimate goal is that providers, researchers, and implementers alike draw on the shared understanding and recommendations from this research, taking them forward for further research, testing, and implementation. We hope to encourage enhancements to digital payment solution-design features that are tailored and inclusive and ensure that all segments of the population are able to access and use digital payment apps easily, confidently, and safely.

Key results

Improving the design and usability of digital payment solutions for constrained users requires addressing prevalent barriers. Barriers faced by these users are less behavioural in nature due to high trust in digital payments and low risk-perception. However, structural and usability barriers such as network/server issues and an absence of timely notifications and guidance can limit users' confidence and ability to use digital payments. Users often end up relying on their own workarounds to problem solve, such as switching between applications or teaching themselves via YouTube.

Within the user experience itself, the design of digital payment applications can lead to low discoverability of features beyond payments and can be cognitively overloading - limiting users' from availing of other features. Many users navigate digital payments through memorisation of visual elements, such as icons, colours and positions of buttons which override literacy barriers. Additionally, the first-time user experience is often brief due to limited application guidance and training, compounding the lack of trust in digital payment features beyond transferring and receiving money.

Description and methodology

Our research methodology focused on the user experience amongst women, gig workers, and migrant workers. We adopted a multi-pronged methodological approach, triangulating insights from three methodologies: a quantitative survey, in-depth qualitative interviews, and usability testing with low-income constrained users.

A comprehensive survey questionnaire was designed to provide a baseline understanding of adoption and usage patterns and behaviours and challenges (structural, behavioural, UX-UI) faced by these population segments. The survey was conducted with 262 respondents across urban and rural locations in two states in India.

Survey data was then brought to life using in-depth qualitative interviews with 25 respondents to gain deeper insight into the context, usage and behaviours around digital payments. The qualitative interview guide was informed by inputs from customer protection and UI/UX experts.

Finally, usability testing was employed with the same 25 respondents to reveal specific friction points in the user experience in real time. This involved observing respondents' interaction with common digital applications and discovering knowledge and accessibility gaps with respect to the use of features and services offered by different providers. The research team reached out to representatives of prominent digital payment applications for further information but received no response.

Results and highlights

Users have high usage and trust in digital payments, but many have a mixed experience. The majority of users have more than one application downloaded and switch between them. Many report the benefits of digital payments: most users find it convenient, easy to use, and useful.

However, the agency and self-efficacy of users to explore digital payment interfaces and use features beyond transferring money are low. Most users are onboarded to digital payments by people they know (especially women) and receive minimal guidance and training around navigating the digital payment interface. This leads many to rely on their own access to knowledge sources, such as YouTube, to relearn key features.

The user experience itself is variable. Digital payment interfaces lead to cognitive overload, and users often face barriers in navigating an application in English and understanding technical jargon. Many users rely on spatial positionality, colours, and icons to overcome literacy barriers, but this can also lead to mistakes and errors and reduce users' interaction with digital payments. Simplified information architecture through tailored iconography, guided videos, signposted customer care, and delivering just-in-time notifications at the time of a failed network/server issue are some key recommendations to address these barriers.

Discussion

Beyond barriers, our study presents a myriad of opportunity areas and focus areas for further research. Many constrained users navigate digital payments through memorisation of visual elements, such as icons, colours, and positions of buttons which override literacy barriers. In particular, further research should focus on understanding which icons carry the most salience and prototyping optimised visual features, like icons, notifications, and passwords.

Moving forward, we hope that service providers, researchers, and implementers strive to continue to fill the gap of research on constrained users' experience of digital payments and focus efforts on better serving their needs to use digital payments easily, safely, and confidently.

Research funders and other information

This study presents research commissioned by the Future of Finance Initiative at Dvara Research and conducted under an unconditional grant from WhatsappPay.