Does the cashless transaction work? An analysis of policy challenges in an emerging economy

Purpose This paper aims to study the adoption of a public policy (cashless transaction system by implementing demonetization) from the institutional and technology adoption theories. Design/methodology/approach A mixed-method approach was followed and data was collected from 900 samples randomly selected from different cities in India. The content analysis method was applied to analyze responses collected from personal interviews, and descriptive statistics and cluster analysis methods were used to process the data. Findings The determinants of the cashless transaction policy adoption were institutional issues and technology-related issues. The non-adopters were falling into either technology antagonist or technology ignorant, whereas the adopters perceived user-friendliness, necessity and usefulness. Institutional bottlenecks and perceived security issues were serious concerns. Originality/value This study examined the factors influencing the adoption and non-adoption of mobile payments for two reasons. First, the nature of adoption here is more of a forced adoption rather than organic/natural adoption. Second the context – emerging market, India – also demands that it would be more useful to carry out exploratory study and understand the factors from the stakeholders – merchants and customers – themselves than examining existing technology adoption theories.