The Impact of Cybersecurity and Digital Fraud Concern on Consumers Adoption of Electronic Payments System In India

Abstract

The adoption of Electronic Payment Systems (EPS) has transformed financial transactions by offering speed, convenience, and accessibility, this rapid digitalization has also increased exposure to cybersecurity threats and digital fraud. Incidents such as phishing, identity theft, malware attacks, and unauthorized transactions pose serious challenges to consumers and financial institutions, ultimately affecting trust and adoption rates. This paper examines the relationship between cybersecurity risks and digital fraud in electronic payment systems, identifies major threat vectors, and evaluates preventive measures including regulatory frameworks, technological solutions, and consumer awareness. The rapid diffusion of Electronic Payment Systems (EPS) in India has transformed consumer payment behaviour, shifting transactions from cash-based to digital platforms such as UPI, NEFT, RTGS, IMPS, AEPS, digital wallets, and Point of Sale (PoS) systems. This transformation has been driven by technological advancement, government initiatives toward a cashless economy, and increased smartphone penetration. However, alongside these benefits, concerns related to cyber security have emerged as a critical determinant of consumer trust and adoption. This study investigates consumer perception, satisfaction, and behavioural intention toward the adoption of Electronic Payment Systems in India, with a specific emphasis on cyber security concerns. Drawing on primary survey data collected from 226 respondents in Jabalpur, Madhya Pradesh, the research examines how usability, service quality, internet banking experience, and perceived security influence consumer satisfaction. The findings indicate that while most users recognize the convenience and societal benefits of digital payments, their continued usage is strongly conditioned by their confidence in cyber security safeguards such as encryption, two-factor authentication, fraud detection mechanisms, and secure digital infrastructure.