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.