The Influence of Digital Payments on Consumer Spending Behaviour

  • Authors

    • Anita Verma Associate Professor, Banaras Hindu University, India Author
    • Dr. K. Balasubramanian Professor, Bharathiar University, India Author

    DOI:

    https://doi.org/10.67228/30715636/IJETMR-2020PII1V8S

    Published 12-04-2020

  • Digital Payments, Consumer Spending Behaviour, Fintech, Behavioral Economics, Cashless Economy, Financial Technology Adoption, Impulse Buying, Payment Friction, UPI, Electronic Transactions

    Issue

    Vol. 3 No. 2 (2020)

    Section

    Articles

    How to Cite

    [1]
    A. Verma and K. Balasubramanian, “The Influence of Digital Payments on Consumer Spending Behaviour”, IJETMR, vol. 3, no. 2, pp. 01–13, Dec. 2020, doi: 10.67228/30715636/IJETMR-2020PII1V8S.

  • Abstract

    The fast development of digital payments ecosystems has made the world change the financial systems and consumer expenditures essentially. Digitization has changed the psychological, behavioral, and economical incentives of consumption since the movement between the use of cash-based operations and digital payment options, such as mobile wallets, contactless cards, the QR-based systems, Unified Payments Interfaces (UPI) and integrated fintech features. This paper analyses the effects of digital payments on consumer expenditure by relying on behavioral finance, convenience in transactions, security perceptions, impulse purchases, financial monitoring systems, and socio-economic moderators. Based on the cross-disciplinary insights on behavioral economics, information technology, consumer psychology, and the study of financial technology, the analytic framework presented in this paper builds up an integrated composite of understanding how digital adoption of the payment affects the modification of patterns of spending intensity, frequency, and allocation. The study utilizes a systematic quantitative paradigm with primary data that is collected by the means of surveys and statistical models such as regression analysis and correlation tests. It has been revealed that the adoption of digital payment transforms the frequency and impulsive purchases with significant ratings and minimizes the perceived transaction friction. At the same time, electronic monitoring mechanisms integrated into payment systems enhance awareness of expenditures of specific groups of consumers, which implies a two-fold behavioral change, namely, amplification of spending and increase in financial controls. These effects are moderated by such demographic variables as age, income level, digital literacy, and urbanization. The research adds to the scholarly literature by offering a behavioral-technological integrational conceptualization, which renders how digital payment regimes affect cognitive spending mechanisms. It also provides policy suggestions to regulators, financial institutions, and fintech innovators to create balanced eco systems to encourage financial inclusion without spurring unnecessary consumer debt or overspending. The results would be of great use to new economies that are fast in digital financial revolution.

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