₹60 for tea, ₹250 for a food order, ₹150 for something you saw while scrolling — none of it feels like real spending in the moment. That feeling has an actual name in behavioral economics: the pain of paying, a term coined by researchers Drazen Prelec and George Loewenstein to describe the small mental friction we feel when parting with money — friction that UPI, by design, almost completely removes.

Why UPI reduces this friction more than even cards do

Research on payment transparency (notably by marketing professor Dilip Soman) has found that the more physically and visually separated a payment feels from the money itself, the less painful it feels to spend. Cash involves counting notes and physically handing them over — high transparency, high pain of paying. Cards reduce this somewhat. UPI reduces it further still: no note counting, no card swipe, no waiting — just a PIN and a notification, often completed in under five seconds. The payment is just as real as cash, but it doesn't feel that way, and that gap between reality and feeling is exactly where overspending lives.

A 7-day experiment to see this in your own spending

Rather than just being told this happens, here's a way to actually observe it in your own numbers over one week:

  • Day 1: Note your bank balance. Don't change anything about how you spend.
  • Days 2–6: Keep spending exactly as normal — but each time you make a UPI payment, write down the amount and what it was for, in a notes app or a physical notebook. Don't judge it yet, just log it.
  • Day 7: Add up every logged payment and compare the total to what you would have guessed on Day 1, before you started tracking.

Most people who actually run this experiment find their guessed total on Day 1 undershoots their real Day 7 total — often by a meaningful margin, precisely because the individual payments never felt significant enough to remember.

I always used to think that I had a fair amount of understanding about the way in which my money was flowing till I checked my entire history ofUPI transactions for an entire week. I was more than surprised to find out that what caught me was not a single expense but rather a number of small expenses which I kept making for food, drinks, online purchases, and subscriptions.

Turning the research into a fix, not just an observation

Since the problem is reduced payment transparency, the fix is to manually reintroduce some — not by going back to cash, but by creating a visible checkpoint UPI doesn't naturally provide. A separate UPI-linked account, topped up weekly with a fixed personal-spending amount, works for exactly this reason: watching that specific balance drop restores some of the "realness" that a shared, larger balance hides.

What this doesn't mean

This isn't an argument to stop using UPI — the same instant, frictionless payment that enables mindless spending also enables genuinely useful things: splitting a bill in seconds, paying a vendor without carrying change, sending money to family instantly. The goal is noticing where the same convenience quietly works against you, not treating the whole system as a problem.

FAQs

Does the pain of paying affect everyone equally?
Research suggests it varies by personality and financial habits — some people are naturally more "vigilant" trackers than others — but the underlying effect of reduced friction has been observed broadly across payment methods, not just for certain personality types.

Is a separate spending account really necessary, or is tracking enough?
Tracking alone helps awareness but doesn't recreate the checkpoint a separate, visibly-depleting balance does. Both help; the account approach tends to work better for people who find manual tracking tedious to sustain.

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