Digital transformation in India’s payment system: analysing the evolution of unified payments interface (UPI)

Purpose The purpose of this study is to investigate the evolution of UPI performance in India. The investigation addresses three major components, firstly, to study the impact of COVID-19 on UPI ecosystem; secondly, to assess performance of major UPI apps; and finally, to conduct a comparative analysis between UPI, POS and ATM performance in India. Design/methodology/approach This study is based on secondary data ranging from July 2016 to December 2023. For the analysis paired sample t-test, ANOVA, Games–Howell Post Hoc, Levene’s test, independent sample t-tests and a log-linear econometric model to control for structural factors influencing UPI performance have been used. Findings The results of this study indicate that pandemic had a positive association with long-term UPI performance. Additionally, the econometric analysis suggested that the COVID-19 pandemic alone did not represent a causal driver of behavioural shift of UPI adoption but rather acted as an accelerator. Furthermore, following the pandemic, there has been a remarkable growth of UPI adoption as compared to ATM and POS with PhonePe UPI app emerging as the leader. Research limitations/implications This study relies on secondary data focusing on a specific time period which may restrict the generalizability of findings of this study. Practical implications To expand the growth of UPI, the policymakers and industry should focus on UPI adoption amongst rural population; additionally, the policymakers from other countries should try to replicate the UPI system of India to strengthen their digital financial infrastructure. Originality/value This study enriches UTAUT2 theory and offers novelty by studying long-term performance of UPI along with examining performance of major UPI apps which has been mostly overlooked.