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Digital payments in India — How demonetization and COVID-19 shaped adoption?

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  • Yadav, Varun
  • Das, Abhiman

Abstract

In this article, we study the adoption of digital payment technologies in India over the last decade. Using a quasi-experimental design, the study assesses if the demonetization exercise of 2016 led to an enhanced adoption of digital payments. We further study the evolution of digital payment usage in the wake of the COVID-19 pandemic. The study finds insufficient evidence supporting the claim that demonetization led to an enhanced adoption of digital channels (measured by the value of transactions as a percentage of money supply). On the other hand, the lockdown in the wake of the first wave of the COVID-19 pandemic spurred the adoption of some new-age payment channels.

Suggested Citation

  • Yadav, Varun & Das, Abhiman, 2025. "Digital payments in India — How demonetization and COVID-19 shaped adoption?," Economics Letters, Elsevier, vol. 246(C).
    • Handle: RePEc:eee:ecolet:v:246:y:2025:i:c:s0165176524005585
    DOI: 10.1016/j.econlet.2024.112074
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    Keywords

    Digital payments in india; Demonetization; FinTech; PayTech;
    All these keywords.

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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