Digital Payment Adoption and Consumer Spending Behaviour in India: Evidence from UPI Growth, Convenience and Trust (2020–2026)

Abstract

Abstract The rapid expansion of digital payments has altered the way consumers purchase goods and services in India. Among the available digital payment instruments, the Unified Payments Interface (UPI) has become particularly important because it combines real-time settlement, interoperability, mobile accessibility and widespread merchant acceptance. This study examines the relationship between digital-payment development and consumer buying behaviour, with specific attention to perceived convenience, trust and spending behaviour. The research adopts a descriptive-analytical design based entirely on secondary evidence. Data are drawn from the Reserve Bank of India’s Digital Payments Index (RBI-DPI), National Payments Corporation of India (NPCI) UPI statistics, Government of India releases and recent empirical studies on UPI adoption and consumer spending. The RBI-DPI increased from its March 2018 base of 100 to 493.22 in March 2025, while UPI transaction volume rose from 2 crore transactions in FY2016–17 to 24,161.69 crore in FY2025–26. Government data further report UPI transaction value of approximately ₹314 lakh crore in FY2025–26 and 55.49 crore users onboarded by June 2026. Evidence from prior empirical research indicates that convenience and trust are important determinants of UPI adoption. A study reported that approximately three-fourths of respondents perceived an increase in their spending after adopting UPI, while 91.5% reported satisfaction and 95.2% considered UPI convenient. The present study does not claim a new causal estimate because no primary observations or raw micro-data were collected. Instead, it triangulates official payment-system indicators with published behavioural evidence. The results indicate that digital-payment expansion is associated with greater transaction frequency and may reduce the psychological friction associated with payment, thereby influencing purchase behaviour. The study contributes by connecting technology-adoption factors with consumer-finance outcomes and by highlighting the need for secure, inclusive and financially responsible digital-payment ecosystems.