Mumbai-based financial markets professional Baibhav Mishra, 28, lived through that nightmare last year. While scanning a QR code on his laptop to pay for an order on a B2B marketplace via UPI (Unified Payments Interface), “I accidentally entered ₹50,000 instead of ₹5,000,” he recalls. Mishra says the marketplace had no recourse for overpaying and advised him to reach out to the seller directly—but nothing came of it. The worst part? “I never even got the item I ordered.”
We’ve been trying to come to terms with the fact that digital payment tools—debit and credit cards, mobile banking apps, e-wallets and payment apps powered by UPI—lead us to overspend unintentionally.
In January 2024, the Indraprastha Institute of Information Technology (IIIT), Delhi, published a study titled From Cash to Cashless, revealing that 74.2% of participants spent more due to UPI, while only 7% spent less. But, we must also confront the reality that our reliance on digital transactions might be causing us to overspend erroneously too.
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While reporting this story, Lounge uncovered various overpayment blunders, often driven by the mechanics of online payments. These include scanning a QR code to pay via UPI-enabled apps (PhonePe, Google Pay or Paytm) but still needing to type the amount, or tapping a debit/credit card without noticing the inflated total entered accidentally by the vendor, or simply making a mistake.
One person shared how he mistakenly sent ₹30,000 to his cable guy instead of his friend-in-need through his mobile banking app. Another almost entered their six-digit UPI PIN as the amount to be paid at a store.
Such experiences have made individuals from varied backgrounds conclude that digital payments are changing our relationship with money and how we manage it, often forcing us to be extra vigilant even for smaller transactions after making a few costly mistakes.
We’re prioritising speed over mindful spending because online payments dull the pain of parting with money, says behavioural scientist Anand Damani. Before the pandemic, when digital transactions weren’t the norm, “if you had ₹5,000 in your wallet and spent ₹3,500, you’d immediately register the remaining cash and adjust your spending,” he explains.
“With digital payments, that mental accounting vanishes. Your entire bank balance feels like disposable income, rather than just the cash in hand,” adds Damani, founder of Mumbai-based business consultancy Briefcase. This not only encourages overspending but also makes us more prone to costly mistakes, as we no longer see money physically leaving our hands.
This shift isn’t just anecdotal—there’s science to explain why we make more mistakes. Anthropologist Gayatri Sapru cites a 2019 research paper, Cash, Card or Smartphone: The Neural Correlates of Payment Methods, published in PubMed Central, a US medical journal. It explains that when we handle cash, the parietal cortex in our brain—responsible for processing sensory information and controlling actions—helps us retain a sense of value. “But with digital payments, like scanning or tapping, that part of the brain stays inactive. As a result, you don’t make the neural connection between spending and losing money,” says Sapru, who runs a cultural strategy consultancy called Folk Frequency in Mumbai.
Sapru reckons this lack of neural connection will make it harder for younger generations to be disciplined about spending. “While people aged 20 and above have seen physical cash as the visual for money during their formative years, teenagers and younger individuals only associate money with digits and payment apps.”
Mansi Zaveri, founder and CEO of kidsstoppress.com, a parenting and childcare discovery platform, shares this concern as a mother to a teenage daughter, Aanya. “Last month, we had a discussion after she came back from the Coldplay concert in Mumbai. I had loaded her concert wristband with ₹2,000, but she didn’t keep track of how much money was left.” It made Zaveri realise that the concept of taking back change after a transaction is missing in the younger generation.
She explains that the younger generation does not actively pay and therefore, do not feel even the virtual loss of money while spending. “Her school canteen uses digital coupons, which I top up. Other times, she sends me QR codes via WhatsApp, and I pay for everything—from her Tibb’s Frankie to Apple Store apps.”
Zaveri has started giving her daughter cash to manage her expenses every now and then. “When I have cash in hand, I notice I only spend on things that are truly relevant to me,” says Aanya over a video call.
Zaveri admits she would appreciate some friction in the digital payments process for herself. With 95% of her transactions happening online, she often feels one tap away from making a mistake. “Thank goodness some platforms still send OTPs, giving you a moment to pause and reconsider a transaction. I’ve abandoned so many transactions at that stage,” she says.
Delhi-based financial content creator Neha Nagar, who has 1.8 million followers on Instagram, says many of her audience members reach out to her with concerns about digital payments—both overspending and mistakes. Recently, she’s been creating content around “simple habits like setting daily UPI limits, using budgeting apps to track expenses, and double-checking amounts before hitting ‘Pay’,” she says.
In an email response to our queries, a PhonePe spokesperson, says: “We invest in real-time analysis of mobile numbers, devices, cards or bank accounts for patterns of abnormal behaviour. Our data models flag entities as high risk resulting in their immediate blocking until they can be reviewed systemically.” PhonePe has the highest share of UPI payments in India, above 45% on average, as per data from the government body National Payments Corporation of India or NPCI. Google Pay and Paytm did not respond to emailed queries on the topic.
But expecting platforms to add friction to the payment process is counter-intuitive, says Kamalika Poddar, a product manager whose fintech newsletter has over 39,000 subscribers on LinkedIn. “Apps are designed to make payments quick and easy. If you’re tired, it’s best not to make digital payments at all,” she says.
“Even when scanning a QR code, I always double-check the vendor’s name, UPI ID, and the amount entered—even at the risk of being deemed slow. I also avoid the autopay feature, especially with subscription services as we often keep paying for services without really using them, and don’t realise it until a card expires and you start receiving calls, texts and emails to update your payment details,” adds Poddar.
At this point, net banking is the only online transaction route that requires you to confirm the transaction twice, she notes. A level of verification missing in every other form of digital payment.
Apps do offer help. Features like UPI lite in payment apps where you can pay without code up to ₹5,000 allows you to limit yourself to smaller transactions.
“We could ask for more,” says Lavanya Mohan, a Chennai-based marketing professional who writes about personal finance. “Payment apps could display larger text for inputting numbers or even show the amount on the passcode entry screen.” But she also understands why platforms avoid these features—they don’t want users absorbing too much information at every step.
“Ultimately, it’s on us to take that extra second and be mindful. This is a human problem, not a platform problem. We need to be more careful with our money,” she adds. Platforms, as of now, don’t have a formal recourse for instances of overpaying.
To limit her risks, she avoids using UPI for e-commerce purchases and never saves her card details online. Everyone must create their own friction points to curb overspending and mistakes, says Mohan. And above all, when making digital transactions, “don’t type at the speed you text.”
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