Title: Impact of digital payment methods on consumer trust and spending behaviour: evidence from India

Authors: Sheikh Gowher Rasool; Tahir Ahmad Wani

Addresses: Department of Humanities, Social Sciences and Management, National Institute of Technology Srinagar, 190006, India ' Department of Humanities, Social Sciences and Management, National Institute of Technology Srinagar, 190006, India

Abstract: The current study attempts to examine the perception of safety for consumers associated with two payment options, namely Unified Payment Interface and card payments, across high (laptop) and low involvement (mobile charger) purchase, utilising behavioural economics perspectives. Purposive and snowball sampling was used and a total of 383 respondents were approached to participate in the survey out of which 367 agreed to participate however 322 responses were considered for study. Participants were divided into groups based on payment options (UPI and card) and transaction involvement (purchase of laptop and mobile charger). Results indicate no significant difference in safety perception among participants between UPI and card payments, suggesting consumers weigh benefits and risks similarly for both methods. Perceived safety positively influences trust, aligning with behavioural economics theories emphasising heuristics and biases in decision making. Trust, in turn, positively impacts consumer spending, mediated by convenience. However, loss aversion negatively moderates the relationship between trust and spending growth, indicating that loss-averse individuals may resist increasing spending regardless of trust in electronic payments. These findings underscore the importance of cultivating trust and convenience to encourage payment method adoption in emerging countries like India which leads to increased consumer spending, while considering individual differences in loss aversion.

Keywords: digital payments; UPI; trust; loss aversion; consumer spending.

DOI: 10.1504/IJEB.2026.151460

International Journal of Electronic Business, 2026 Vol.21 No.2, pp.135 - 153

Received: 12 Jul 2024
Accepted: 02 Sep 2024
Published online: 02 Feb 2026 *

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