The Impact of Widespread Use of Digital Payment System on The Management of Personal Savings and Spending

Abstract

The increasing digitization of the global economy is changing how products and services are produced, distributed, and sold all around the world. Digital payments, such as debit cards, credit cards, and mobile money, have gained widespread popularity.

The transition to digital payments has significantly transformed consumer spending habits. With the ease of mobile wallets, online banking, and contactless payments, consumers are increasingly embracing cashless transactions. The rapid proliferation of digital payment systems has led to fundamental changes in individuals' spending habits and saving tendencies. Mobile wallets, online banking, and contactless payment, with the convenience they offer through innovative technologies, enable consumers to make faster and more accessible transactions. This change has simplified spending processes while also encouraging instant gratification and impulsive purchases.

Additionally, the ability to track and manage expenses in real-time has led to greater financial awareness, promoting responsible spending. These developments have also raised concerns regarding privacy and security.

In sum, the impact of digital payments on consumer spending habits is a complex interplay of convenience, financial management, and security considerations. In this research, attempt is made to find whether convenience of digital payment is influencing management of personal finances. A structured questionnaire was circulated in a sample of 200 individuals out of which 164 responses were received. The analysis was done with available responses. A Chi square test was done which rejected the null hypotheses that convenience of digital payment does not lead to impulsive spending. Chi square test was also done to prove  that there is no association between demographic factors like age, gender and the choice of payment mode.