From Cash to Clicks: UPI Adoption and Its Implications for Traditional Bank Deposits in India

The rapid expansion of the Unified Payments Interface (UPI) has transformed India’s retail payment landscape and raised important questions about its wider implications for banking behaviour. This study examines the relationship between UPI adoption and traditional banking deposit behaviour, with particular attention to cash holding patterns, savings account retention, branch usage, and the maintenance of idle balances. UPI has emerged as the dominant digital payment rail in India, enabling instant, interoperable, and mobile-based transfers across bank accounts. While this has improved convenience, financial inclusion, and transaction efficiency, it may also have altered how customers use deposit accounts in everyday financial management. The study adopts a descriptive and analytical research design and draws on both secondary sources and survey-based primary data from bank customers. It explores whether frequent UPI use is associated with reduced cash dependence, lower balance retention in savings accounts, fewer branch visits, and a greater preference for account-based digital transactions. The findings suggest that UPI adoption is positively linked with changes in deposit behaviour, especially among frequent users who tend to hold lower idle balances and rely less on physical banking channels. At the same time, UPI strengthens the role of bank accounts as active transaction gateways, indicating a qualitative shift rather than a complete decline in deposit importance. The study concludes that digital payments and deposit mobilization are now closely interconnected and should be studied together in banking research and policy. Banks may need to redesign deposit products, strengthen behavioural analytics, and differentiate between transactional and savings-oriented account usage. The paper contributes to the growing literature on digital finance, payment systems, and banking intermediation in India.

UPI Adoption; Digital Payments; Banking Deposit Behaviour; Cash Holding Patterns; Financial Inclusion; & Traditional Banking

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