An Empirical Study on the Impact of UPI Usage on the Spending Behavior of College Students

The UPI system in India has revolutionized the payment process. It accounted for 186 billion transactions worth ₹261 lakh crore during the financial year 2024-2025. The growth rate is 147 percent compared to the financial year 2017-2018.People between 18 and 35 years old use Unified Payments Interface which accounts for 55% and college students between 21 and 25 years old are the group of users (Electroiq, 2024). This study looks at how using Unified Payments Interface affects the way college students spend money. It uses data from places like NPCI, RBI and other reports from 2021 to 2025. The study found that a majority of students spend money when they use Unified Payments Interface. In fact, 74.2 percent of students said they spend more and 59.8 percent said they often spend more than they planned. Also, 68 percent of students said they buy things on impulse because they do not feel the pain of paying when they use payments. Further analysis reveals that students are spending money on things like online shopping (+10 percentage points) and entertainment(+8pp). They are spending less money on educational materials(-6pp). The problem is that many students do not keep track of how much money they spend. 38 Percent of students keep track of their spending and only 27 percent use tools to track their expenses. This study uses some models like the Technology Acceptance Model, Stimulus-Organism-Response and the Pain of Paying theory to understand why students are spending money in these ways. It also introduces the idea of the