From cash to cashless: UPI’s impact on spending behavior among Indian users
As it takes a jiffy to complete the purchase journey via smartphones, more and more people are not only purchasing their daily essentials via unified payments interface (UPI) mode of digital transactions but also costly home appliances, high-end gadgets, and designer apparels, among other things.
According to experts, hassle-free digital transactions have also resulted in people overspending on stuff they actually may not need at times.
According to experts, consumer spending in India is soaring, with people splurging on cars, smartphones, TVs, and other items, boosting the country’s economic growth. However, the trend has also seen people overspending on certain high-priced items.
The latest data from the National Payments Corporation of India (NPCI) revealed that the number of Unified Payments Interface (UPI) transactions reached 1,330 crores in April. On a year-on-year basis, the UPI transaction count has increased by 50 percent.
Last year, the UPI transactions increased by almost 60 percent to reach a record 11,768 crore.
According to a recent survey by IIT Delhi, nearly 74 percent of people in the country are ‘overspending’ as a result of using UPI and other digital payment methods.
“The convenience and ease of digital transactions through UPI, in comparison to cash, may indeed lead to lower awareness of spending, as transactions are seamless and reduce the tangible feel of money leaving one’s possession,” Prabhu Ram, Head of industry Intelligence Group at market intelligence firm CMR, told IANS.
A recent report by Nielsen Media India, on behalf of Amazon India, showed that digital payment methods are on the rise in the country, with 42 percent of consumers saying they will choose UPI for online festive shopping.
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