UPI, Digital Finance, and Poverty: Does FinTech-Based Inclusion Work Through UPI?

Abstract Book of the 11th International Conference on Research in Management and Economics

Year: 2026

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UPI, Digital Finance, and Poverty: Does FinTech-Based Inclusion Work Through UPI?

Mona Chaudhary, Amit Mookerjee

ABSTRACT:

Digital financial systems are increasingly recognized as tools for expanding financial access and enhancing financial capabilities for transactions, business and trade opportunities, labor-market participation, and poverty reduction. In India, the Unified Payments Interface (UPI) has emerged as a distinctive digital public infrastructure enabling instant, low-cost, bank-linked payments while generating a verifiable record of financial activity. Unlike many FinTech platforms, UPI is uniquely inclusive due to its ease of registration, real-time settlement, minimal transaction costs, low literacy requirements, and intuitive QR-code–based interface that allows access to multiple debit and credit transactions through a single visual platform. These features set UPI apart in its ability to scale financial inclusion across diverse income and education groups. In FY 2024–25, UPI processed approximately 185.8 billion transactions valued at ₹260.6 lakh crore, underscoring its central role in India’s financial ecosystem and growing global relevance. A documented financial history is critical for transitioning from informal to formal economic participation, particularly for accessing banking services, credit, current accounts, and working capital. Unlike cash-based transactions, UPI enables individuals to demonstrate income patterns, participate in account-based commerce, and become visible to formal lenders, potentially easing credit access. UPI also facilitates Direct Benefit Transfers (DBT), access to financial instruments, and learning-by-doing in digital finance, thereby strengthening financial inclusion and institutional outreach. This study uses primary household survey data from approximately 400 households in National Capital Territory of Delhi, supported by secondary information, collected using stratified random sampling and a structured questionnaire. UPI usage intensity is constructed using transaction frequency, transaction value, and transaction purpose (peer-to-peer payments, merchant transactions, and DBT receipts). Using econometric analysis, the study examines whether higher UPI usage intensity is associated with improvements in monetary and multidimensional poverty outcomes. The expected contribution is to provide evidence on whether UPI-enabled digital finance enhances household welfare through improved credit access and more efficient DBT delivery, informing financial inclusion and development policy.

Keywords: Credit Access, Digital Inclusion, Household Welfare, Poverty Measurement, Transaction Behavior.