Revolution of Digital Payment in India

Abstract

India's digital payment revolution is rewriting the country's financial narrative at a remarkable pace. Fuelled by the phenomenal success of the Unified Payments Interface (UPI), India has witnessed a staggering surge in digital transactions. To put it in perspective, in financial year 2023, more than 100 billion digital transactions took place across India. This study aims to examine the digital payment revolution in India, delving into the various factors driving this transformation. The digital payment revolution began predominantly in 2016, following demonetization, and has continued to grow ever since. In addition to demonetization, several other factors have contributed to this revolution, such as increased access to the internet, the impact of COVID-19, rising financial literacy, and various government initiatives. In addition to these aspects, the research work examines the changing consumer behaviour and preferences, along with the socio-economic impact of digital payment adoption, particularly on rural and unbanked populations. Increased influence of Fintech companies, digital wallets, and mobile banking applications have provided innovative and user-friendly platforms for conducting transactions. And we also discussed about the Hackers disruption in UPI transaction in India, causing financial instability and loss of trust in digital payment system. But Regulatory support from the Reserve Bank of India (RBI) has been instrumental in shaping the digital payment landscape. The RBI's policies and regulations have not only ensured the security of digital transactions, but also in the future, RBI is planning its Digital Currency. Understanding the pivotal role of finance in India's digital payment revolution is critical for both professionals and policymakers, as they navigate a landscape where innovation knows no bounds.