IMPACT OF DIGITAL PAYMENT SYSTEMS ON CONSUMER BUYING BEHAVIOR IN INDIA

ABSTRACT:

Digital payment systems—particularly UPI-based mobile payments—have reduced transaction friction and altered consumer buying behavior across India. Drawing on behavioral economics (cashless effect; pain of paying), technology adoption theory (TAM/UTAUT), and India-specific policy and market context, this paper investigates how digital payments influence (i) purchase frequency, (ii) impulse buying, and (iii) perceived spending increases. A mixed-evidence approach is used: official secondary indicators and policy documents are synthesized alongside a simulated cross-sectional consumer survey dataset (n = 412) designed to mirror a plausible India-based research instrument. Regression results show that digital payment usage intensity significantly predicts increased purchase frequency (β = 0.348, p < .001) and impulse buying (β = 0.190, p < .001). Reduced pain of paying is positively associated with impulse buying (β = 0.278, p < .001) and partially mediates the effect of usage on impulse buying (indirect effect ≈ 0.109; 95% CI [0.066, 0.151]). Promotional benefits also significantly raise impulse buying (β = 0.265, p < .001). Financial self-control is negatively related to frequency increase, impulse buying, and spending increase. The findings support an integrated model in which digital payment adoption and use increase consumer buying activity primarily via friction reduction and payment decoupling, while self-control and trust/safety factors condition the magnitude of behavioral change. Implications are presented for consumer budgeting tools, merchant promotion design, fintech UX transparency, and policy interventions focused on consumer protection and fraud risk in ubiquitous low-value digital payments.