Introduction of UPI has revolutionized the face of India’s digital payment by offering the features like simple, secure, and accessibility for the transactions. This has in turn influenced the perception of consumers and has accelerated drastic growth in e-commerce. This research paper mainly focuses on role of UPI in shaping the behaviour of consumers and also expanded the online commerce. The study uses secondary data to examine this change in the payment ecosystem, the challenges faced after the introduction of UPI over the years and key findings after the research. The research paper also highlights behavioural changes, trust building, and consequences of online retail platforms. Overall, UPI emerges as a catalyst for India’s digital economy, driving both consumer confidence and sustainable e-commerce growth. The paper has concluded that UPI has transformed consumer behaviour and significantly contributed to the growth of e-commerce in India. It has enhanced payment efficiency, reduced transaction barriers, and increased consumer trust. The study concludes that UPI is a key driver of digital transformation in India.