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VOL. 8, ISSUE 2 (2026)
Impact of digital payments on cashless economy in India
Authors
Vidyadhara M V
Abstract
The rapid evolution of digital payments has served as the
primary catalyst in transitioning India toward a cashless economy,
fundamentally altering the nation’s socio-economic fabric. This paper examines
the shift from a cash-reliant society to a global leader in real-time digital
transactions, driven largely by the Unified Payments Interface (UPI),
mobile wallets, and government-led initiatives like Digital India. The
study highlights how the formalization of the economy has led to
increased GDP growth, enhanced tax compliance, and the streamlined
delivery of social security through Direct Benefit Transfers (DBT).
Furthermore, it explores the critical role of digital trails in
providing financial inclusion for the unbanked and enabling credit
access for MSMEs. Despite record-breaking transaction volumes, the
transition faces persistent hurdles, including the rural-urban digital
divide, escalating cybersecurity threats, and infrastructure dependencies.
The paper concludes that while India has achieved a "digital leap,"
the long-term sustainability of a cashless ecosystem depends on
strengthening cyber-resilience, improving last-mile connectivity, and
fostering digital literacy among vulnerable populations.
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Pages:39-41
How to cite this article:
Vidyadhara M V "Impact of digital payments on cashless economy in India". International Journal of Social Science and Humanities, Vol 8, Issue 2, 2026, Pages 39-41
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