Impact of digital payment adoption on consumer spending behaviour in Urban and Semi-Urban India
DOI:
https://doi.org/10.29070/j0pxkj56Keywords:
Expenditure, UPI, Digital Finance, Technologies, Cashless, EconomyAbstract
Ever since UPI, mobile wallets, and card-based systems were widely used, the payment ecosystem in India has been greatly affected by the fast growth of digital financial technology. This research looks at the spending habits of people in urban and semi-urban areas of India after they've switched to digital payments. Eight hundred fifty participants, ranging in age from eighteen to sixty-five, were surveyed using a structured questionnaire in order to accrue primary data for a quantitative study. A DID regression model, descriptive statistics, and correlation analysis were used to compare changes in discretionary spending before and after the implementation of digital payment methods. Using digital payment methods causes consumers to spend more money, according to the results. After using digital payment services, people's discretionary spending went up by around 18.9% on a monthly average. People in the 18–24 age bracket showed the most significant increase in their buying habits, suggesting a greater sensitivity to convenience and promotional offers among this demographic. There are robust positive correlations between convenience, incentives, impulsive purchases, and total expenditure, according to the studies of correlation. Furthermore, regression findings show that using digital payment methods considerably increases spending behaviour, but financial literacy has the opposite effect, moderating impulsive expenditure. Improving financial literacy is crucial, and these results show how digital financial technology affect people's finances and their conduct.
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