Digital Payment System In India And Its Effect On Economic Condition Of Retail Industry

Abstract

The speed of digital payments in India has had a massive impact on the retail sector, especially small and medium
businesses (SMEs) and mom-and-pop shops. The entry of Unified Payments Interface (UPI) and mobile wallets
has promoted cashless payments, enhancing business efficiency, formalization, and customer base. This research
investigates the effect of digital payment systems on the economic situation of Indian retail companies through
the lens of adoption rates, revenue growth, challenges, and policy implications. The research combines academic
literature, government reports (RBI, NITI Aayog, World Bank), and industry reports (BCG, PwC, KPMG) to give
a holistic view. Our results indicate that *digital payments improve financial inclusion, lower transaction costs,
increase consumer trust, and boost revenue growth. But adoption difficulties like technological know-how,
cybersecurity threats, and merchant fees are still key hurdles. The paper ends with
policy suggestions to encourage the inclusive adoption of digital payments in urban and rural retail environments