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Investigating Payment Method Choice: A Study of UPI and Cash Usage Dynamics in Small-Scale Retail Environments

P. Vanaja* Head

Research and Development, Siva Sivani Degree College,

 

S. Madhavi

Head Computer Department

NH-44 Kompally, Secunderabad -500100, Telengana, India.

Email-Id: vanaja@ssdc.ac.in

 

 

ABSTRACT
Nowadays UPI has become an important source of digital money in our phones. Before that the market of digital money was replaced with plastic money like ATM card, Debit card , Credit card, paper money and metals such as coins of copper, silver and brass.Now time has changed into one small gadget that is our phones or we can say money in our phone . This has replaced digital money into digital payment.While UPI has revolutionized digital payment infrastructure—reaching over 17 billion monthly transactions and powering 62% of digital transactions by early 2025 — recent GST-related enforcement in places like Bengaluru and Hubballi has triggered a reversal among certain vendors who now refuse UPI due to concerns over tax scrutiny.

Nowadays because of UPI many cities has turned into cash free city and UPI cities, which have included the app such as phone pay, Google pay, Paytm. This has exchanged the cash system so people can do the payment with their phone but for small payments people are dependent on UPI but this is affecting the server getting more load on the system. In contrast, surveys indicate that over 73% of MSMEs report business growth through digital adoption, with UPI as the most preferred tool .

To reconcile these dynamics, the study employs mixed methods: face‑to‑face questionnaires, semi‑structured interviews, and transaction observation across a representative sample of shops.This project shows the customers preferences of cash vs UPI in Small retail shops by considering factors like security,trust,Customer payment behavior, speed of the transaction, and way of using the UPI

Key words:
Unified Payments Interface, consumer behavior, merchants, UPI, Cashless Economy, Digital Payments, Fintech, Digital payments infrastructure,big tech, financial inclusion, UPI adoption, Merchant payment choice, shopkeepers adaptability, Informal retail , small merchants, Consumer convenience, digital finance, Financial inclusion.

 

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