Over a couple of decades, the Banking and financial services industry is going through a major transitional phase on account of technology led innovations, infringement of policies and initiatives, robust internet connectivity, increased penetration of smartphones which have changed the entire landscape of the payments industry. Besides, the Reserve Bank of India is working in close proximity with the payment intermediaries for devising useful payment mechanisms, highly customized banking applications and payment gateways that better serve customer needs thereby inducing a multi-prolonged digital payments culture among banking customers. The present study is a modest attempt to highlight the growth patterns exhibited by the digital payment methods. Additionally, the study shall provide useful insight into the efficacy of the different online payment modes in the context of Indian economy framework. The current research study is conducted with the help of secondary data compiled from websites of National Payments Corporation of India (NPCI), Reserve Bank of India (RBI), Ministry of Electronics & Information Broadcasting (MeitY), government reports & journal articles from renowned databases to address the research objectives and arrive at appropriate conclusions. The data has been analysed and interpreted through a descriptive and analytical approach. In addition to this, the data has been supplemented with graphs, charts and tables for a better understanding. The research article concludes that digital payments have shown an increasing trend both in terms of volume and value over the past half- decade. The Unified Payment Interface has performed exceptionally well outperforming other payment modes in terms of adoption and usage. The result findings reveal that digital payments have contributed positively towards financial inclusion. However, it is equally important to keep track of the underlying risk and frauds inherent in their usage which must be addressed cautiously for minimization & timely detection of frauds in order to promote smooth uninterrupted robust network of such payment mechanisms backed by effective government support systems.

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Keywords: Digitalization, Financial Inclusion, Banks, Digital Payments, UPI.