Digital India initiative led the foundation for digital economy, which has shown impact on every sector of economy. The financial payment system in India focused on digital payments to be a part of Digital India programme. For the transparency of financial system demonetisation played sustainable role in providing boost to digital payment which has affected the ecosystem of security in payment system by cyber security problem with increased frauds. A safe and congenial environment is required for cashless economy that provide prevention of frauds. Therefore, the study of regulatory framework is important to control the financial payment system by its legislation including rules and regulations.

KEYWORDS: Regulatory, Framework, Security, Ecosystem, Frauds.