Digital Payments are payments done using online modes with no physical exchange of money involved. (1) Various methods of digital payment include UPI, Debit Cards, Credit Cards, AEPS, USSD, Mobile Wallets, Mobile Banking, Mini ATM’s, Point of Sale, Internet Banking. The paper aims to study the enablers contributing to fast growth of the digital payment system in India and analyse its impact on the economy. Also it focuses on studying the challenges existing in digital payment system. The paper also targets the residents of vadodara city of Gujarat State, to know their acceptability for Digital Payment System and difficulties faced by them while using it and their desire to move back to cash payment system. The primary data from 200 respondents has been collected via questionnaire. The paper concludes, majority respondents are youngsters willing to continue using most preferred Digital Payment mode i.e. UPI in future. Many are facing difficulties like Technical error, Payment failure, Fear of fraud, Hidden charges, Lack of Knowledge, Complicated instruction, other issues. As though there are some difficulties, many still want to continue with the ideology, “more digital, less cash”. Government needs to take more initiatives to promote the Digital Payment System and make it fraud proof, technical- glitch free, reliable and user friendly.