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From Cash to Cashless: UPI's Impact on Spending Behavior Among Indian Users and Prototyping Financially Responsible Interfaces

Harshal Dev, Raj Gupta, Sahiti Dharmavaram, Dhruv Kumar

TL;DR

This study investigates how India's Unified Payments Interface (UPI) influences individual spending behavior and proposes financially responsible interfaces. Employing a mixed-methods design, Phase 1 surveys (n=235 valid from 276 responses) and 20 interviews quantify increased spending and high satisfaction with UPI, while Phase 2 uses a PhonePe-based prototype (Version 1) refined through usability testing with 34 participants to promote financial awareness. The authors identify design gaps in existing apps and offer iterative, user-driven features—expense tracking, balance display, budgeting controls, education pop-ups, scam detection, and a delayed-payment option—evaluated through TAM-based usability testing. The work culminates in a set of developer-focused recommendations and a refined prototype (Version 2) to enhance financial literacy, impulse control, and overall user experience, highlighting the potential for integrated UPI apps to support responsible spending. Overall, the paper bridges micro-level behavioral insights with practical interface design to inform next-generation digital payment tools and policy considerations.

Abstract

Unified Payments Interface (UPI) is a groundbreaking innovation making waves in digital payment systems in India. It has revolutionised financial transactions by offering enhanced convenience and security. While previous research has primarily focused on the macroeconomic effects of digital payments, our study examines UPI's impact on individual spending behavior. Through a survey of 276 respondents and 20 follow-up interviews, we found that approximately 75% of participants reported increased spending due to UPI. Many attributed this to UPI's intangible nature, which reduced feelings of guilt typically associated with spending. Additionally, participants provided suggestions to improve the user experience of existing UPI applications. Utilizing this feedback, we developed a high-fidelity prototype based on a popular UPI app in India and conducted usability testing with 34 participants. The insights gathered from this testing shaped the final prototype and its features. This study offers valuable design recommendations for UPI app developers and other stakeholders.

From Cash to Cashless: UPI's Impact on Spending Behavior Among Indian Users and Prototyping Financially Responsible Interfaces

TL;DR

This study investigates how India's Unified Payments Interface (UPI) influences individual spending behavior and proposes financially responsible interfaces. Employing a mixed-methods design, Phase 1 surveys (n=235 valid from 276 responses) and 20 interviews quantify increased spending and high satisfaction with UPI, while Phase 2 uses a PhonePe-based prototype (Version 1) refined through usability testing with 34 participants to promote financial awareness. The authors identify design gaps in existing apps and offer iterative, user-driven features—expense tracking, balance display, budgeting controls, education pop-ups, scam detection, and a delayed-payment option—evaluated through TAM-based usability testing. The work culminates in a set of developer-focused recommendations and a refined prototype (Version 2) to enhance financial literacy, impulse control, and overall user experience, highlighting the potential for integrated UPI apps to support responsible spending. Overall, the paper bridges micro-level behavioral insights with practical interface design to inform next-generation digital payment tools and policy considerations.

Abstract

Unified Payments Interface (UPI) is a groundbreaking innovation making waves in digital payment systems in India. It has revolutionised financial transactions by offering enhanced convenience and security. While previous research has primarily focused on the macroeconomic effects of digital payments, our study examines UPI's impact on individual spending behavior. Through a survey of 276 respondents and 20 follow-up interviews, we found that approximately 75% of participants reported increased spending due to UPI. Many attributed this to UPI's intangible nature, which reduced feelings of guilt typically associated with spending. Additionally, participants provided suggestions to improve the user experience of existing UPI applications. Utilizing this feedback, we developed a high-fidelity prototype based on a popular UPI app in India and conducted usability testing with 34 participants. The insights gathered from this testing shaped the final prototype and its features. This study offers valuable design recommendations for UPI app developers and other stakeholders.
Paper Structure (68 sections, 23 figures, 9 tables)

This paper contains 68 sections, 23 figures, 9 tables.

Table of Contents

  1. Introduction
  2. Related Work
  3. Overview of the Study
  4. Phase 1 : Methodology
  5. Data Collection
  6. Data Analysis
  7. Ethical Considerations
  8. Limitations
  9. Phase 1: Evaluating the Impact of UPI on Spending Behaviour
  10. Quantitative Analysis (Analysis of Survey Results)
  11. Graphs for Quantitative Results
  12. Qualitative Analysis (Analysis of Interview Results)
  13. Exploring UPI Usage for Transactions: Insights and Perspectives
  14. Factors Influencing Spending Behavior
  15. Attitude Towards Financial Management
  16. ...and 53 more sections

Figures (23)

  • Figure 1: MARKET SHARE OF UPI PAYMENT APPS IN INDIA
  • Figure 2: Overview of the entire research study
  • Figure 3: (a) When did users start using UPI? (b) How often do users use UPI?
  • Figure 4: (a) Satisfaction Level with UPI (b) UPI Impact on Budget
  • Figure 5: (a) Budget exceedance due to UPI (b) How often do people keep track of transaction history?
  • ...and 18 more figures