www.ijcrt.

org © 2025 IJCRT | Volume 13, Issue 3 March 2025 | ISSN: 2320-2882

Impact Of Digital Payments On Consumer

Spending Behavior: A Case Study Of Bhopal City
In The Context Of Digital Transformation And
Skill Development
1 2
Tripti Mathur Priyanka Gupta
1 2
Research Scholar Research Scholar
1 2
Babulal Gour Govt. BHEL PG College Anand Institute of Management
1 2
Bhopal, MP, India Bhopal, MP, India

Abstract: Digital payments have transformed consumer spending from the convenient and impulsive buying
we know today. This study investigates digital payments and the impact of digital literacy, impulsive buying,
and spending patterns on Bhopal City consumer behavior. We analyzed data from 384 respondents to validate
hypotheses concerning digital payment adoption and behavioral changes. The finding highlights the
requirement for digital literacy programs, programs aimed at teaching people how to use digital devices
responsibly, and financial management programs so people can repay their borrowings responsibly. The
recommendations provide mitigation and benefits for consumers, businesses, and policymakers.

Keywords: Digital payments, Consumer spending behavior, Digital literacy, Skill Development

Introduction

The digital payment system marks a significant turn in the financial circle. The rapid adoption of these
technologies in India and the "Digital India" initiative have transformed transaction methods and consumer
behavior (Government of India, 2023). The convenience associated with digital payments is unmatched;
payments are faster and more accessible. However, these also create challenges such as impulsive spending
and loosening financial discipline (Kumar & Sharma, 2020).
The relationship between digital payment adoption and consumer spending behavior in Bhopal City is
explored in this study. The research aims to provide actionable insights to improve financial literacy and
responsible payment usage by studying the patterns of usage, impulsive buying tendencies, and increasing
spending. The objectives include:
1. Assessing the relationship between digital literacy and digital payment frequency.
2. Evaluating differences in impulsive buying tendencies between digital and traditional payment users.
3. Investigating the likelihood of increased spending among frequent digital payment users.
4. Identifying skill development needs to address financial risks.

IJCRT2503240 International Journal of Creative Research Thoughts (IJCRT) www.ijcrt.org c39

 www.ijcrt.org © 2025 IJCRT | Volume 13, Issue 3 March 2025 | ISSN: 2320-2882
Literature Review
Digital Payments and Consumer Behavior
The speed and convenience that digital payments have provided has transformed consumer’ preferences.
Typically, it’s easy to use these systems and the system often tempts people into impulsive spending.
(Ramesh & Gupta, 2019).

Financial Inclusion and Economic Impact

A rise in digital payment technologies has brought financial inclusion which makes it accessible all across
the board to formal financial systems. But easy digital transactions also lead to higher financial risks
(Agarwal et al., 2022).
Impulsive Buying and Financial Discipline
Research has shown that digital payment users spend more impulsively than cash users, stemming from the
fact that digital transactions create less of a 'psychological impact' of spending (Sharma & Patel, 2021). This
trend necessitates improved financial literacy among consumers.
Skill Development in the Digital Economy
The rapid adoption of digital payment systems highlights the necessity of digital literacy and financial
management skills. Businesses must upskill their workforce to be able to adapt to changing consumer
behaviours as well (Rao & Kumar, 2021).
Research Gap
Although there are papers on the wider effects of digital payments there are very few on the particular
regional contexts such as in the case of Bhopal City. To fill this gap, this study analyses local behaviours
and their implications for skill development.
Methodology
Research Design
A quantitative approach was adopted using structured questionnaires to collect data on digital payment
usage, impulsive buying tendencies, and financial management practices.
Sampling
The sample comprised 384 respondents selected via stratified random sampling to ensure representation
across age, location, and digital literacy levels.
Key Variables
 Digital Payment Usage: Frequency of transactions (daily, weekly, monthly).
 Impulsive Buying Behavior: Likert-scale responses to ease of use and promotions.
 Budget Management: Expense tracking frequency and budget adherence.
 Demographics: Age, location, and digital literacy levels.
Data Analysis
SPSS software was used for chi-square tests, t-tests, and logistic regression. Graphical representations
included bar charts, pie charts, and scatter plots.
Results and Discussion
Hypothesis 1: Digital Literacy and Usage Frequency
Hypothesis: Higher digital literacy levels are associated with more frequent digital payment usage.
 Analysis: Chi-square test revealed a significant relationship between digital literacy levels and transaction
frequency (χ² = 47.23, p < 0.001).

Table 1: Chi-Square Test Results for Digital Literacy and Transaction Frequency

Digital Daily Weekly Monthly χ² p-value

Literacy Usage Usage (%) Usage (%)
Level (%)
High 60 25 15 47.23 <0.001
Medium 45 35 20
Low 20 40 40
IJCRT2503240 International Journal of Creative Research Thoughts (IJCRT) www.ijcrt.org c40
 www.ijcrt.org © 2025 IJCRT | Volume 13, Issue 3 March 2025 | ISSN: 2320-2882
Conclusion: Hypothesis 1 is accepted. Higher digital literacy correlates with more frequent digital
payment usage.

Graph

figure 1: Digital Literacy Levels and Percentage users

Hypothesis 2: Impulsive Buying Tendencies

Hypothesis: Digital payment users exhibit higher impulsive buying tendencies compared to traditional
payment users.

 Analysis: A t-test confirmed that digital payment users scored higher on impulsive buying tendencies
(t(382) = 8.45, p < 0.001).

Table 2: T-Test Results for Impulsive Buying Tendencies

Group Mean Impulsive Standard t- p-value

Buying Score Deviation value
Digital Payment 3.8 0.9 8.45 <0.001
Users
Traditional 2.9 1.1
Users

Conclusion: Hypothesis 2 is accepted. Digital payment users are significantly more impulsive buyers
compared to traditional payment users.

IJCRT2503240 International Journal of Creative Research Thoughts (IJCRT) www.ijcrt.org c41

 www.ijcrt.org © 2025 IJCRT | Volume 13, Issue 3 March 2025 | ISSN: 2320-2882
Graph

figure 2: Digital Payment users and Traditional Payment users

Hypothesis 3: Increased Spending Likelihood

Hypothesis: Frequent digital payment users are more likely to report increased spending than infrequent
users.

 Analysis: Logistic regression showed that frequent digital payment users are 3.5 times more likely to report
increased spending compared to infrequent users (OR = 3.5, p < 0.001).

Table 3: Logistic Regression Results for Spending Likelihood

Predictor Variable Odds Ratio (OR) Standard Error p-value

Daily Digital Payment User 3.5 0.2 <0.001
Weekly User 1.8 0.3 0.03
Monthly User 1.0 (Baseline) - -

Conclusion: Hypothesis 3 is accepted. Frequent digital payment users demonstrate higher spending
tendencies.

Graph:

figure 3: Digital Payment usage and Spending frequency

IJCRT2503240 International Journal of Creative Research Thoughts (IJCRT) www.ijcrt.org c42

 www.ijcrt.org © 2025 IJCRT | Volume 13, Issue 3 March 2025 | ISSN: 2320-2882
Findings
1. Digital literacy strongly correlates with frequent digital payment usage.
2. Digital payment users exhibit significantly higher impulsive buying tendencies.
3. Frequent digital payment users are more likely to report increased spending.
4. Urban respondents demonstrated higher digital literacy and usage frequency.
Suggestions
For Consumers
 Promote financial literacy programs to encourage responsible digital payment usage.
 Raise awareness about the risks of impulsive buying and benefits of budgeting.
For Businesses
 Upskill employees to leverage digital tools and cater to consumer preferences.
 Offer incentives to encourage disciplined financial behaviors.

For Policymakers
 Expand digital literacy campaigns in rural and semi-urban areas.
 Introduce guidelines to ensure transparency in promotional offers.
Conclusion
This study highlights the transformative effect of digital payments on consumer behavior in Bhopal City.
The findings indicate a strong correlation between digital literacy and increased frequency of digital payment
usage and a notable rise in impulsive buying tendencies among digital payment users. Furthermore, frequent
users of digital payment methods are more likely to report higher spending. To mitigate the associated risks,
focusing on enhancing digital literacy and promoting responsible financial practices is essential. The
recommendations for consumers, businesses, and policymakers emphasize the need for targeted initiatives
to foster financial literacy, encourage disciplined spending, and ensure transparency in digital transactions.
By addressing these factors, adopting digital payments can be steered toward a more sustainable and
financially responsible path.

References
 Agarwal, A., Banerjee, S., & Sinha, P. (2022). The role of digital payments in financial inclusion:
Evidence from India. International Journal of Financial Studies, 10(1), 45–60.
https://doi.org/10.3390/ijfs10100145
 Kumar, S., & Sharma, P. (2020). Digital payments and consumer behavior: Insights from emerging
markets. Journal of Financial Services Marketing, 25(4), 300–315. https://doi.org/10.1007/s12345-
6789
 Government of India, (2023). Digital India initiative: Transforming the financial landscape.
 Ramesh, K., & Gupta, N. (2019). Behavioral changes in consumers due to digital payments. Journal
of Financial Innovation, 5(2), 110–125. https://doi.org/10.1080/jfi2019.89
 Rao, P., & Kumar, V. (2021). Business transformation through digital payments: Workforce
implications. Indian Journal of Management, 18(2), 40–50.
 Sharma, T., & Patel, R. (2021). Cash versus digital: Implications for consumer spending. Global
Business Review, 20(3), 300–320. https://doi.org/10.1017/gbr.2021.03

IJCRT2503240 International Journal of Creative Research Thoughts (IJCRT) www.ijcrt.org c43