A marked surge in the volume of internet banking, mobile banking, QR code payments, payment gateway transactions, and a spurt in the number of ATM users testify to Nepal’s digitisation revolution. This silent yet perceptible transformation wouldn’t have been possible but for the huge opportunities available for accessing the internet and other infrastructural facilities coupled with the ever-growing ownership of cell phones, laptops, and other hand-held devices.

Consumers, especially from urban areas, have become digitally literate and more tech-savvy to size up the advantages of using such digitised platforms, products, and services vis-à-vis traditional physical transactions. The terms’ “digitisation” and “digitalisation” are generally found to be used synonymously in common parlance. Yet, they are distinctly different. “Digitisation” generally means encoding data and documents and converting them to a digital format, “digitalisation” refers to converting business processes to digital technologies instead of analogue or offline systems.

Current status of digitisation

In consumer behaviour, digitisation has made it possible for consumers to become more aware and informed. It has altered the way consumers buy and use products and services. On the positive side, digitisation has led to a noticeable spike in the number of business transactions from customers, who could save substantial time and search costs in making comparisons among products and services online. Going by the increased number of payment gateway transactions, especially in the post Covid-19 scenario, we can certainly infer that digitisation would stay so in the future.

While consumers’ adoption of digitisation or digital consumption is discussed frequently, the factors responsible for causing resistance are hardly debated. Of late, consumer readiness towards digital adoption and consumption is the major positive factor for its growing popularity. Post Covid-19, many consumers are much more inclined towards using the available online means.

Drastic reduction in the queues witnessed earlier for banking transactions, especially in the urban settings, would vouch for this trend. This, however, doesn’t presuppose that such digital transactions don’t face any resistance. For instance, personal habits and feelings of insecurity act as the principal reasons for consumers resisting any innovation in the digital domain. This is primarily because most Nepali consumers, especially in the upper age bracket, are habituated to physical means of transactions. Misusing consumers’ data on some service providers has triggered a sense of insecurity.

The practice of elderly parents’ dependence on their children for internet banking and other digital transactions has also contributed to the former’s hesitancy. Any instance of misuse of passwords by children or close relatives would generally result in avoidance of digital transactions in future.

The absence of an enabling, safe and secure ecosystem for digital products and services is also one of the chief reasons for keeping a chunk of the population at bay. In this context, the availability of affordable digital devices, a reasonable knowledge of encryption, and other security features and mechanisms become imperative. They are avoided by most consumers merely due to the nuances and complexity involved in the technology. Additionally, elderly consumers especially do not sync these digital innovations and their personal needs, values, and practices. They firmly believe making payment through cash/ cheque is always a safer option than using payment gateways. Hence, they refuse to consider the relative advantages of digital transactions over physical ones.

The use of digital services necessarily requires a consistent and reliable internet supply. And non-availability of a robust digital infrastructure undoubtedly remains another cause for resistance. Moreover, compared to other countries in the region, the Internet services in Nepal are pricey, making the service providers less competitive. In addition, there is no particular pricing policy or policy regime to guide the charges they levy on digital transactions. As a result, the consumers become cautious about the quality and pricing of digital services such as ride-sharing apps, online food delivery, or online shopping.

Despite the benefits that accrue from digital transactions, consumers’ well-being is ignored more often than not. Regrettably, a mechanism to redress is not kept in place when consumers get cheated on price or when the products or services are not as per their expectations while making transactions in such digital platforms. Lately, consumers are found to vent out anger and frustration when the ride-sharing apps don’t turn up on time or cancel orders at the last moment or charge more than regular taxis.

Failure to deliver food ordered online as per the committed timelines is yet another issue. The absence of a well-designed and user-friendly return policy expected from online digital shopping platforms is another avoidable nuisance. Government portals and platforms are no better in this regard, and some of their apps have hardly been functional after their launch. Of course, the latest fiasco of initiating an e-passport is a case in point. Such instances of failure will only make consumers shy away from using or even trying digital services.

Way forward

The best and the only way to overcome consumer resistance to any digitisation initiatives is to design, develop, and deploy a robust digital ecosystem. For this to happen, all the stakeholders such as the government, service providers, consumers, and vendors come together and act as the key drivers and active enablers in the digital transformation odyssey. Until it becomes a reality, the consumers’ mindset might continue to be averse and not open to adopting such innovations in the digital space. Every effort should be made to convince them about the utility of the innovative products and services, the quality of the service providers, and the dependability of the supporting infrastructure behind those digital services. Moreover, most of the population can be brought under the purview of digital consumption only when interventions are designed and made to create digital awareness among the masses. Keeping in mind the rural-urban digital divide, the government should ensure that all consumers are educated about the optimally productive use of such digital innovations and platforms nationwide. That would put to rest any insecure feelings that consumers might have and would lessen the digital divide that is prevalent at present.