International Journal of Scientific Research and Engineering Development

India's digital payment system is booming due to the policies made by governments and the adaptation of the latest technologies. This has made people go cashless. This activity has made people feel less threatened. These payments are made using mobiles/smartphones, computers, laptops, etc., which has decreased the use of physical currency. This has created an overall impact in e-commerce, retail, and banking, which has transformed the whole economy. In the last six years, the country has almost gone cashless. From small street vendors to big mall owners, everyone promotes cashless transactions. Currently, the Unified Payments Interface (UPI) has made it accessible for everyone to accept the payment through any medium, from anywhere and anytime. The examination of the macroeconomic effects of digital transactions, with empirical evidence of digital payments and GDP growth, is shown in the paper. These effects are seen due to the rise in household consumption and the strengthening of financial intermediaries, which reveals a bidirectional relationship, suggesting mutual reinforcement. Besides, fast payment systems are shown to reduce costs and improve financial inclusion. This technology has promised greater efficiency but requires skilled manpower and infrastructure. So, the government should make the policies regarding digital systems strong, which supports sustainable economic growth.