UPI and Consumer Spending Behaviour in India: A Narrative Synthesis of Secondary Data and Existing Survey Evidence

The system with annual processing of over 24,000 crore transactions and making up a significant proportion of real-time global payments. Despite the existence of many studies on the factors contributing to UPI adoption, little academic scrutiny has been directed towards how UPI usage, which is effortless and invisible, relates to the psychological and behavioral aspects of consumer behavior. In this regard, this paper presents a narrative synthesis of the connection between UPI usage and consumer behavior in India, drawing on secondary data sources based on official transactional level records (NPCI, RBI, PIB) and a review of five earlier survey studies conducted between 2024 and 2025, involving over 800 participants in Chennai, Tamil Nadu, and India-wide surveys. The discussion is grounded in concepts from behavioral finance, especially the ‘pain of paying’ theory and mental accounting, along with technological adoption theories including UTAUT and Diffusion of Innovation theory. The results demonstrate a clear trend Unified Payments Interface (UPI), which came to fruition in 2016 under the aegis of the National Payments Corporation of India (NPCI), has become the bedrock of India’s retail payments among independent research studies where usage of UPI has been shown to be associated with greater transaction volumes, reduced average ticket value, and an admitted rise in expenditure by the majority of users, especially among young and tech-savvy users in cities, although the extent of this trend differs from study to study (from 58 percent to over 74 percent of those who admit increased expenditure). The paper ends with some policy recommendations for regulators, banks, and fintech developers regarding the trade-off between the benefits of financial inclusion and the dangers of overspending and lack of savings discipline.