ABSTRACT
The rapid adoption of the Unified Payments Interface (UPI) has transformed India's digital payment landscape, raising questions about its impact on traditional payment methods like credit cards. This study examines the influence of UPI on credit card usage by analyzing transaction volume and value trends using secondary data from NPCI and RBI. Employing econometric techniques such as the Unit Root Test, OLS Regression, ARDL Test, and Granger Causality Test, the research evaluates whether UPI acts as a substitute or a complement to credit cards. Empirical findings indicate the presence of a statistically significant positive correlation between UPI and credit card spending. An increase by one unit in the UPI transaction value by ₹1 crore is associated with an increase in credit card transaction value by ₹0.0673 crore. ARDL, OLS, and Granger causality tests establish complementarity between credit cards and UPI at the 1% level. The findings provide insights into changing consumer payment preferences and their implications for financial institutions, policymakers, and the fintech ecosystem.
