UPI Effect on Spending Behavior: Whether drinking tea worth Rs 10 or doing shopping worth thousands of rupees, many of us are accustomed to making payments through a UPI app. The habit of Google Pay, Paytm, PhonePe and other UPI apps has become so prevalent that many people do not even keep cash in their pockets.
According to the data of NPCI i.e. National Payment Corporation of India, the number of UPI monthly transactions has increased almost 10 times in the last 4 years.
With the advent of UPI payment system, the spending pattern of people has not only changed, people’s expenditure has also increased.
According to a research study by Indraprastha Institute of Information Technology (IIIT, Delhi), the use of UPI has proved to increase expenses for most people.
On the other hand, although small, there is a section which is able to save through UPI. Many other interesting results related to the use of UPI have emerged in this study.
UPI sting all over the world
Before the results of the survey, it is also interesting to know at what speed the payment system UPI, which was launched in 2016, the year of demonetization, has progressed. For this we looked at the NPCI data. It was revealed that till July 2016, only 21 banks/institutions were providing UPI services, whereas now 572 banks and financial institutions are providing UPI services.
UPI journey: monthly transactions
(UPI gained momentum after March 2020)
According to NPCI, the monthly transaction figure has increased from Rs 38 lakh in July 2015 to Rs 19.78 lakh crore in March 2024. UPI monthly transactions in March 2020 were Rs 2.06 lakh crore. That means UPI gained tremendous momentum after 2020 (Covid) and since then it has increased almost 10 times. Now India’s UPI is valid in many countries of the world.
8 out of 10 people use UPI every day
Now let’s talk about the research study of IIIT Delhi. When the people involved in the survey were asked questions about the use of UPI payment app, 8 out of 10 people said that they use it every day. There were 15.6% people who used UPI weekly and 1.1% monthly. There were only 0.3% people who rarely make UPI payments.
How frequently do people use UPI Payment?
UPI changed the spending pattern
46% of the people surveyed admitted that UPI has had an impact on their monthly expenses. Half of these people strongly agree with the impact of UPI on the budget. There are also 26% people who do not agree with this.
Harshal Dev and Raj Gupta, two students of IIIT, Delhi, have conducted the survey study under the guidance of Assistant Professor Dhruv Kumar. It included 276 adult people of different age groups and social backgrounds.
Impact of UPI on people’s budget
UPI increased budget, started spending more
74.2% people believe that due to UPI their expenditure has increased compared to before, while only 7% said that it has reduced the expenditure. 59.8% of the people surveyed have experienced excessive expenditure due to UPI payment. On the contrary, 39.8% people believe that they avoided such situations.
Experienced myself, then did research
Researchers said that they felt that their budget was getting spoiled due to the use of UPI app. They are spending more than before. A question popped up in my mind, is this happening only with him or with other people too? With this in mind, he submitted a proposal to the Research Review Committee and after getting permission, he conducted the research.
No charge, no, people are satisfied with UPI
91.5% of the people surveyed indicated that they were satisfied with their overall experience regarding UPI. About 95.2% people consider it convenient. It is also convenient compared to debit and credit cards because there is no charge or interest on it.
500 rupees worth of physical currency!
Harshal says, ‘If you do shopping worth Rs 5,000, there is no harm in paying through UPI. Fill the amount, enter the PIN and make the payment instantly. At the same time, when you have to take out money from the purse, then while counting 10 notes of Rs 500, you definitely feel that hey, so much money is being spent. Human psychology regarding cash expenditure is similar.
How to control the habit of overspending?
Digital payment system has given a direction to the financial management of people, but many times people spend more and later regret it. Researchers said that access expenses can be controlled if there is a facility to keep track of expenses in the UPI app itself.
Although many different apps are available in the name of Expense Tracker, but data and privacy is an important issue. In such a situation, it can be helpful if the service is included in UPI apps. People also expressed their desire that financial education should be promoted for this.
This is the complete research study
This research of IIIT, Delhi titled ‘From Cash to Cashless: UPI Effect on Expenses Behavior of Indian Users’ has been selected for the prestigious global conference CHI 2024 to be held at Hawaii Convention Center in America from 11 to 16 May.
