The Impact of Instant Digital Transactions on Consumer Spending Behaviour

Abstract

The rise of instant digital transactions via UPI, mobile wallets, and contactless payments has transformed consumer spending by enhancing convenience but also encouraging impulsive purchases and reduced savings. This study investigates the psychological and behavioural impacts of digital payment systems, applying the Theory of Planned Behaviour to analyse how Attitude, Behavioral Intention, and Perceived Behavioral Control influence purchasing frequency. Addressing gaps in existing literature that often emphasize trust and usability over behavioural consequences, the research explores how digital spending behaviours are shaped, especially across demographic segments. Using a quantitative approach with SmartPLS-based Partial Least Squares Structural Equation Modelling, data from 317 digitally active consumers was analysed. The findings show Behavioral Intention as the strongest predictor of purchase frequency, followed by Attitude, while Perceived Behavioral Control showed minimal influence. High model reliability and good fit indices reinforce the results. The study concludes that consumer intent, more than perceived control, drives digital purchases. It recommends integrating behavioural feedback tools and financial education in digital platforms to foster healthier financial habits and ensure long-term economic well-being in a cashless economy.

Introduction

The 21st century’s digital revolution has transformed financial systems through instant digital transactions enabled by mobile wallets, UPI, contactless cards, and integrated platforms. These technologies have reshaped consumer spending behaviors and offer unprecedented opportunities for financial inclusion, especially for previously unbanked populations. However, the convenience of one-click payments also encourages impulsive spending, reduces financial discipline, and increases exposure to targeted digital marketing.

The global digital economy operates as a decentralized network of platforms that facilitate new forms of financial engagement and challenge traditional banking. Adoption drivers like perceived usefulness and ease of use mask psychological vulnerabilities that can lead to uninformed financial decisions, while infrastructural and literacy gaps deepen the digital divide, particularly between urban and rural populations.

Digital payment systems alter consumer cognition and economic behavior by pushing real-time incentives that increase spending frequency and normalize debt. Despite advances, there is limited empirical research on how instant digital transactions causally affect long-term spending habits, savings, and credit reliance across different demographics and cultural contexts.

The rapid expansion of digital payment systems worldwide—such as India’s UPI and Brazil’s Pix—demands comprehensive study to balance economic efficiency with consumer well-being and financial sustainability. Insights from such research can inform policymakers, FinTech developers, educators, and the banking sector to foster responsible digital payment ecosystems.

The digital economy’s platformization intersects with broader issues like sustainability, inequality, and globalization, influencing macroeconomic stability and environmental outcomes. A holistic, inclusive approach involving regulation, infrastructure investment, and cross-sector collaboration is essential to harness the full benefits of digital finance while mitigating risks.

Conclusion

This research offers several implications for future scholarly inquiry. Primarily, it underscores the significant role of Behavioral Intention to spend (BI) as the strongest predictor of Frequency of Purchase (FP), suggesting that further research could explore the mechanisms through which intentions are formed and translated into financial outcomes. Additionally, the nuanced finding that the interaction between BI and Perceived Behavioral Control (PB) has a slight negative effect on FP opens avenues for investigating the conditional factors that may amplify or dampen this interaction. Finally, given that Perceived Behavioral Control (PB) alone has a negligible effect on FP, future studies might examine other variables that mediate or moderate the influence of control on financial performance. For practitioners, the key takeaway is the critical importance of fostering strong behavioural intentions to drive financial performance. Strategies aimed at enhancing individuals\' or organizations\' intentions should be prioritized. Furthermore, attention should be paid to the interplay between behavioural intentions and perceived behavioural control; practitioners should be mindful that simply enhancing control might not directly translate to improved financial outcomes and that the interaction between intention and control can have complex effects. Therefore, interventions should be designed to optimize both intention and control, while also considering the potential for their interaction to influence financial performance negatively.

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Copyright

Copyright © 2025 Bishan Bopanna, Prof. Anitha D Silva. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.