Cashless India: A Comparative Analysis of Digital Payments and their Impact on the Economy

The emergence of digital payment platforms has dramatically altered the global economy. These platforms have transformed the way businesses and individuals conduct financial transactions by making them more efficient, transparent, and inclusive. In India, the population’s increasing access to the internet has caused a further increase in digital payments. According to the Reserve Bank of India (RBI), the number of digital transactions in the country rose from 6.9 billion in 2017-18 to 23.8 billion in 2020-21. This increase can be attributed to more people adopting new digital payment methods like mobile wallets, the Unified Payments Interface (UPI), as well as the widespread use of debit and credit cards. When considering the rest of the world, India’s increase in the use of digital payments is noteworthy. A report from McKinsey stated that India is expected to achieve a $1 trillion-dollar digital payment market by 2025. This is combined with growing access to the internet, a higher adoption rate of smartphones, and the government’s efforts to encourage digital payments. This paper studies the increase in digital payments in India while looking at global trends and its economic implications. It investigates the reasons for the increase in digital payments in India and analyses the results of these payments on financial inclusion, economic growth, and the general finances of India.