Assessing the Influence of Digital Payment Systems and Financial Literacy on Consumer Expenditure Patterns in Mumbai

Title

Assessing the Influence of Digital Payment Systems and Financial Literacy on Consumer Expenditure Patterns in Mumbai

Author

1. Saleemuddin Panwale, Professor, Ramnarain Ruia Autonomous College, Mumbai, India
2. Julinca Afonso, Student, Ramnarain Ruia Autonomous College, Mumbai, India
3. Sanvi Kamath, Student, Ramnarain Ruia Autonomous College, Mumbai, India
4. Deepshikha Mahar, Student, Ramnarain Ruia Autonomous College, Mumbai, India
5. Samruddhi Ghundare, Student, Ramnarain Ruia Autonomous College, Mumbai, India

Abstract

This study analyses the relation between the use of UPI, financial literacy and the spending behavior among different age groups and genders in Mumbai. The study shows a rise in the usage of UPI, which links to expenditure. The study is based on the primary data, collected through a questionnaire from 301 respondents residing in Mumbai. Various descriptive statistical tools were used to analyze the data. The results show that payment methods vary among different age groups, irrespective of their gender. Other findings show that by using the chi-square test, there is a significant relationship between age group and preferred mode of payment. By correlation analysis, there is no significant correlation between income and frequency of UPI usage, whereas no significant correlation between monthly expenditure and UPI usage of an individual. The study shows a non-significant relation between an individual’s financial literacy and UPI usage. According to the analysis, the majority of people use Google Pay for UPI transactions. Overall, the study helps to understand how digital payment affects these factors and whether they are dependent or not.

Keywords

Conclusion

The results of this study reveals that UPI usage varies across different age groups, while other factors such as gender does not have a significant difference on usage of digital payments. Younger individuals (18-26) years of age were found to use UPI more frequently whereas older respondents still tend to rely more on offline mode of transactions. The study also found no significant relationship between financial literacy and UPI usage. Respondents with different levels of financial knowledge showed similar patterns of UPI usage. Hence, there was no significant relationship between financial literacy and UPI usage. Likewise, there was no significant relationship between an individual's expenditure and usage of UPI. Also, the study states that among the various digital payment applications, Google Pay emerged as the most preferred platform with around 65.12% of respondents choosing it for day-to-day transactions. PhonePe was the second most popular app, whereas other digital payment platforms such as Amazon Pay, BHIM UPI and Cred had comparatively lower usage.

However, the study has certain limitations too. The data was collected mainly from respondents residing in Mumbai, which may affect the findings in other regions. In addition, the questionnaire was distributed through social media so most respondents were smartphone users. As a result, the individuals without smartphones were not involved in the study. The data used is primary, and it may involve data that is biased. Also, the type of sampling conducted was convenience sampling which may again increase the probability of getting data that is biased. Further research can explore more on other modes of payment, such as credit and debit cards, which can be considered for a more detailed analysis. Overall, the findings provide valuable information on how demographic factors, financial literacy, and spending behaviour shape the adoption and use of digital payment systems.

Author Contrubution

The sole responsibility for the study design, data gathering, results analysis, and manuscript drafting lies with the author.

Funding

This research, including authorship and publication, did not receive any specific grant from funding agencies in the public, commercial, or non-profit sectors.

Conflict of Interest

All authors confirm that there are no conflicts of interest associated with this research.

Data Sharing Statement

Not applicable.

Software And Tools Use

Not applicable.

Acknowledgements

I appreciate the support and expertise of everyone who contributed to this research and manuscript writing, as well as the insightful comments from anonymous reviewers.