ABSTRACT

Payment system is changing at a faster pace. It has changed from cash transaction to digitalized way. Prompt payment of cash for buying goods and services is called cash transaction whereas digital payment system is the system in which payments are made electronically over the internet. Efforts are also made to cope up with the changes. Considering both the merits and demerits of cash transaction and digital transaction, the paper focuses on the different modes of digital payment system i.e. banking cards, USSD, internet banking, mobile banking, UPI and mobile wallet  The paper further examines if India is ready for digital payment system or not. For that the conditions (financial stability, education level, smart phones/ laptops and internet connection and physical infrastructure) to be fulfilled for digital payment system is analysed. There are different issues involved in digital payment system which is also studied and focused upon.