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

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.