| Journal of Collective Sciences and Sustainability
Received: 07 January 2026; Revised: 07 March 2026; Accepted: 17 March 2026; Published Online: 18 March 2026.
J. Collect. Sci. Sustain., 2026, 2(1), 26401 | Volume 2 Issue 1 (March 2026) | DOI: https://doi.org/10.64189/css.26401
© The Author(s) 2026
This article is licensed under Creative Commons Attribution NonCommercial 4.0 International (CC-BY-NC 4.0)
Perceived Security and User Satisfaction in UPI 3.0-
based Payment Systems
Pankaj Kumar Anawade*
and Deepak S. Sharma
Faculty of Commerce and Management Sciences of Datta Meghe Institute of Higher Education and Research, Wardha, Maharashtra,
442107, India
*Email: pankaj.anawade@dmiher.edu.in (P. Anawade)
Abstract
With UPI 3.0 promising new security features and the launch of user-centric fully automatic wallets, the system
is set to take an already transformed digital payment landscape in India up yet another notch. This study
explores the co-relation between perceived security and user satisfaction based on UPI 3.0 based payment
systems along with Indian users. This was a descriptive research design with a sample of 450 respondents from
all major cities of India. The security of UPI 3.0 having higher impact on user satisfaction and adoption. A
descriptive cross-sectional study was conducted where the structured questionnaires were used to collect data
and analyze by using statistical techniques such as chi-square, ANOVA, and regression analysis. Results show
that 91.5% of users are satisfied with UPI services and security perception is the strongest factor influencing
continued usage behavior. The adoption of biometric authentication cut acute security incidents and breaches
by 58% in 2025, while the deployment of AI-powered fraud detection tools reduced the number of fraudulent
attacks by 47%. Results shows that perceived security, ease of use and trust explains as a total 78% variance in
user satisfaction. The study finds that UPI 3.0 advanced security architecture has successfully encouraged user
confidence that is establishing India as a leading innovator in digital payments, surpassing with 491 million
Users and 640 million transactions every day.
Keywords: UPI 3.0, Perceived security, User satisfaction, Digital payments, Payment systems.
1. Introduction
2. Literature review
et al
et al
et
al
3. Objectives
The present study aims to achieve the following objectives:
1. To assess the level of awareness and adoption of UPI 3.0 security features among Indian users across
different demographic segments.
2. To examine the relationship between perceived security measures in UPI 3.0 and overall user satisfaction
with the payment system.
3. To identify the key security factors that influence users' continued usage intention and recommendation
behavior for UPI-based payment systems.
4. To evaluate the impact of UPI 3.0's enhanced features including biometric authentication, AI-powered fraud
detection, and blockchain integration on user trust and satisfaction levels.
4. Methodology
The study used a descriptive design to examine perceived security and user satisfaction in UPI 3.0 enabled
payment systems. This method was chosen as a way to methodologically report on the characteristic, behavior,
and perception of UPI users concerning security features and satisfaction. A sample of 450 respondents was
chosen from the major cities towns situated across India (Delhi NCR, Mumbai, Bangalore, Hyderabad, Chennai
and Kolkata). The sample was participants that were active users of UPI with minimum 10 transactions in three
months. Representativeness across ages (1860 years), income groups, levels of education, and occupational
divisions was provided in the sample set by a stratified random sampling method used. The sample was made
up of 58% men and 42% women and the majority, or 65%, were between the ages of 25-40, those that make up
the main user base for digital payments. The structured questionnaire was adapted for online and physical
administration for data collection. The questionnaire was divided into four sections i.e. (i) demographic profile,
(ii) UPI usage patterns and use of UPI 3.0 features (iii) recording of perceived security measures on a five point
Likert scale, and (iv) user satisfaction survey.
The instrument was pre-tested by 50 subjects and further adjusted according to reliability analysis
(Croanbach's alpha =.87), which confirmed the internal consistency. The fieldwork for the primary data was
through
Google form using the social media and email for (online) whereas (off line) personal interviews were
conducted at shopping mail, educational institutions, corporates etc. Data collection and secondary source:
Secondary data were collected from NPCI reports, RBI publications, academic journals and private industry
reports to supplement the analysis and put the findings in perspective. Statistical analysis was conducted with
the help of SPSS 26.0 and AMOS 24.0 software. Demographic characteristics of the users and usage data were
summarized using descriptive statistics, including frequencies, percentages, means and standard deviations.
The relationship between categorical variables was analyzed using Chi-square test. The variance analysis
between multiple groups was tested by one-way ANOVA. Predictors of user satisfaction were also determined
by means of multiple regression analysis. Hypotheses were tested using structural equation modeling looking
at the associations between perceived security, trust, and satisfaction constructs.
5. Results
The demographic distribution of respondents is shown in Table 1. The sample is accordingly slightly male
dominant (58%), consistent with national digital payment usages reported by Shree et al. Age distribution
shows 64.9 percentage of respondents fall within the age gap 26-45 (the workforce population that drive
digital payment uptake).
[4]
Academic status indicates a highly educated sample 50% have post-graduate
qualification which correlates with greater digital literacy and propensity of technology adoption (Table 1).
[4]
Monthly distribution of income shows having a vast majority of the sample coming from middle and upper-
profile for urban India's active digital payment users is drawn predominantly from higher socioeconomic strata.
Table 1: Demographic profile of respondents
Demographic
Variable
Category
Frequency (n)
Percentage
(%)
Gender
Male
261
58.0
Female
189
42.0
Age Group
18-25 years
108
24.0
26-35 years
184
40.9
36-45 years
108
24.0
46-60 years
50
11.1
Education
Graduate
162
36.0
Post-Graduate
225
50.0
Professional
63
14.0
Monthly Income
90
20.0
-
198
44.0
162
36.0
Table 2: UPI 3.0 feature awareness and adoption
UPI 3.0 Feature
Aware (n)
Aware (%)
Adopted(n)
Adopted (%)
Not Adopted (n)
Not Adopted (%)
Biometric
Authentication
387
86.0
306
68.0
144
32.0
Voice-based Payments
315
70.0
158
35.1
292
64.9
Geo-fencing Security
279
62.0
162
36.0
288
64.0
AI Fraud Detection
342
76.0
261
58.0
189
42.0
Blockchain Settlement
189
42.0
72
16.0
378
84.0
Dynamic QR Codes
405
90.0
356
79.1
94
20.9
Table 2 demonstrates the awareness and adoption of UPI 3.0 features in the sample. Among the different types
of QR codes, typical to merchant payment usages studied by Kumar et al, dynamic QR codes exhibit highest
awareness (90%) and adoption (79.1%). (2020). Biometric authentication is high on the agenda (with 86%
awareness and 68% adoption), to demonstrate that people are willing to embrace more secure environments
that see transaction fraud drop by 58%, according to industry stats. Voice payment, although well-known (70%),
has a relatively low rate of penetration (35.1%) due to easy preference for traditional input means or non-
accuracy in multilingual environment. A lower level of awareness (42%) and use (16%) of blockchain
settlement functionality indicates poor user understanding of backend technological infrastructure that
camouflages the sharp upgrade in transaction processing speeds that these features achieve. In the results, I
find relationship among feature visibility, perceived usefulness and adoption rates, which confirms finding of
Sivathanu
[5]
on the key importance of user education in acceptance of technology.
Table 3: Perceived security measures rating
Security Measure
Mean Score (out of 5)
Standard Deviation
High Rating (%)
Neutral (%)
Low Rating (%)
Two-factor
Authentication
4.32
0.78
82.4
14.2
3.4
PIN Security
4.18
0.85
76.9
19.1
4.0
Device Binding
4.05
0.91
72.0
23.1
4.9
Transaction Verification
4.28
0.81
80.2
16.4
3.4
Data Encryption
3.98
0.96
68.4
26.2
5.4
Fraud Monitoring
4.15
0.88
75.3
20.4
4.3
Table 3 shows the respondents' levels of agreement on different types of security employed in UPI 3.0 systems.
Double-factor authentication had the highest mean rating (4.32), 82.4% of respondents rated it high, users have
consistent trust on multilayer security technique which Kumar et al. stressed in their security analysis. The
transaction verification features are rated with 4.28, indicating a personal preference toward real-time
confirmation possibilities which would contribute immediate feedback of the payment status. 43, because it
falls in the same direction to that of PIN security level, endorses that there is an existing confidence of user on
pin-based access control mechanism despite the advent of biometric alternatives.
[1]
Device binding got a score
of 4.05, indicating moderate trust on the security check that binds up UPI accounts with specific mobile devices.
Data encryption scores the minimum mean (3.98), indicating likely user apprehensions regarding data
confidentiality and storage security, which is also in line with the result of Shree et al. on privacy issues in the
adoption of digital payments.
[4]
The low standard deviations in all the measures show agreement among
respondents on security perception, thus confirming that users feel significantly influenced by security
characteristics.
Table 4 User satisfaction across UPI service parameters. The general satisfaction which 91.5% (comprising
satisfied and Very Satisfied) are with our finding almost similar by Shree et al., who observed a similar rate of
satisfaction.
[4]
User-friendliness had the highest mean score (4.34) and 88.9% were satisfied, corroborating
Singh et al 's (2020) notion that perceived ease of use directly affects usage interest and satisfaction.
Transaction speed (mean 4.28) and success rate (mean 4.24)
ng security, users were asked to score this feature out of
5; it achieved a mean value of 4.21 with a percentage satisfaction factor of 86.3%, which means that improved
security levels met the users needs without increasing inconvenience. One of the dimensions that scored least
was problem solving (mean=4.05), indicating areas for adjustment in services to public and grievance redressal
othesis that perceived security affects
positively to the
dissatisfied) suggest effective implementation of feature in UPI 3.0 Features.
Table 4: User satisfaction levels with UPI services
Satisfaction
Parameter
Very Satisfied
(%)
Satisfied (%)
Neutral
(%)
Dissatisfied
(%)
Very
Dissatisfied (%)
Mean
Score
Transaction
Speed
45.3
42.2
8.9
2.7
0.9
4.28
Ease of Use
48.9
40.0
8.0
2.2
0.9
4.34
Security Features
38.7
47.6
10.2
2.7
0.8
4.21
Transaction
Success Rate
41.3
45.3
9.8
2.9
0.7
4.24
Problem
Resolution
32.4
46.2
16.4
4.0
1.0
4.05
Overall
Satisfaction
42.2
49.3
6.7
1.3
0.5
4.32
Table 5: Impact of security features on continued usage intention
Security Feature
High Impact (%)
Moderate Impact (%)
Low Impact (%)
Chi-Square Value
Significance (p)
Biometric Authentication
68.4
26.7
4.9
187.32
0.000*
Real-time Fraud Alerts
72.0
23.6
4.4
201.45
0.000*
Transaction Limits
54.7
36.4
8.9
128.67
0.000*
Encryption Technology
58.2
34.2
7.6
143.89
0.000*
Customer Support
51.6
40.0
8.4
118.23
0.000*
Regulatory Compliance
48.4
42.7
8.9
105.78
0.000*
*Significant at p<0.001
The relationship between security features and UPI Continued Usage Intention is analyzed for the determinants
depicted in Table 5, all relationships are statistically significant (p<0.001). Real-time fraud alerts showed the
greatest effect (72.0%), highlighting the need for proactive anticipatory security that provides immediate
notifications for suspicious activities regarding fraud prevention mechanisms.
[1]
Again, biometric authentication
had a high impact among 68.4% of the respondents, which is indicative of a user sentiment towards
appreciation between convenience and security with respect to the UPI 3.0 features. Moderate-to-High Impact
Encryption technology (58.2%) and transaction limits (54.7%) have the same moderate-to-high impact, as
users appreciate these features but are not quite aware of the technical mechanisms and details behind them.
Customer support (51.6%) and regulatory compliance (48.4%) have a lower but still significant impact, so it
can then be said that users consider institutional trust factors as well as technical security measures. Chi-square
analysis shows that there is a highly significant association of perceived security features with continued usage
intention therefore, using the model by Sivathanu
which states that behavioral intention has a significant impact
on actual usage.
[5]
The above findings validate the assumption that improved security features associated with
UPI 3.0 are positively related to user retention and platform loyalty.
Table 6 presents the results of multiple regression analysis of predictors for user satisfaction in UPI 3.0 systems.
The model accounts for 78.2% of the variance in user satisfaction (R²=0.782, Adjusted R²=0.775), which is a
high explanatory power as found in technology acceptance literature.
[10]
Perceived security is ¼toº one of the
as Singh et
al.
[7]
et al.
placed second, indicating that security improvements cannot come at the cost of ease-of-use, a design
consideration of paramount importance in UPI 3.0 building process.
[4]
Significant positive effect of Trust
found, which supports Shree et al. claim of trust serving as mediating factor for the
influence of system characteristics on user satisfaction.
[4]
satisfaction. Perceived risk is found to have a significant negative -0.143), meaning that the fraud
concern reduces satisfaction in the case when security of filling resides is assured. The F-statistic (142.67,
p<0.001) demonstrates the overall significance of the model and suggests strong evidence that UPI 3.0's multi-
dimensional approach to security usability leads into user satisfaction.
Table 6: Regression analysis - predictors of user satisfaction
Independent Variable
Beta Coefficient
Standard Error
t-value
Significance (p)
R²
Perceived Security
0.352
0.041
8.585
0.000*
0.782
Ease of Use
0.298
0.038
7.842
0.000*
Trust
0.264
0.044
6.000
0.000*
Transaction Speed
0.189
0.036
5.250
0.000*
Social Influence
0.156
0.033
4.727
0.000*
Perceived Risk
-0.143
0.039
-3.667
0.000*
*Significant at p<0.001; Adjusted R² = 0.775; F-statistic = 142.67 (p<0.001)
6. Discussion
Overall, the results of this study offer strong empirical support for perceived security as a critical determinant
of user satisfaction in UPI 3.0 payment systems and have direct implications for the design and development of
digital payment ecosystem in India, and beyond. The demographic composition suggests that adoption of UPI is
limited to educated, economically active urban people similar to the evidence by Sivathanu during
demonetization.
[5]
Nevertheless, it is worth emphasizing that the growing saturation among older respondents
and, mainly, in a 26-45 pool of participants (where over 64.9% of all cases are included) means that UPI has
managed to overcome early adopter groups and achieve some level of mainstream adoption. Interesting
differences are observed in the awareness and usage of UPI 3.0 features, reflecting how feature discoverability
does not match usage behavior. Dynamic QR codes demonstrated 90.0 and 79.1% awareness and adoption rate,
respectively due to their usefulness when making daily transactions as well as when merchants agree to accept
them, convinced by industry figures citing that 96% of merchants have accepted it. By comparison, there is
lower awareness (42%) and adoption (16%) of blockchain settlement features, indicating that while back-end
technology improvements are vital to the performance of a system, they stay out of sight from end users. This
indicates that the user-centric communication strategy which focuses on physical value propositions rather
than technological features as prescribed by Singh et al. in their research on mobile wallet adoption.
[7]
There
folks use biometric
-based authentication over the past few years.
At this point, not using your fingerprint or iris or face to authenticate yourself feels backwards. Industry figures
pointing to a 58% decline in security infractions after biometric technology is deployed also reinforces this user
confidence. On the other hand, voice payments are less adopted (35.1%) though well-known at 70%, as
underpinned issues may include accent identification, language variety or privacy for example during public
transactions. This discovery lays the ground for UPI platform providers to improve voice-based recognition
-lingual milieu and educate users about privacy protection. The analysis of the
security scores could be seen as key to understanding user attitudes with regards to several layers of security.
The high score on TFA and TV (like 4.32 for TFA and 4.28 for TV) shows that users need suspicious security
approaches with more than one layer of verification, similar to Kumar et al. security analysis findings. Data
encryption has received a below-average score (3.98) compared to its significance from technical perspective,
resonating with the gap between backend security infrastructure and users perception of them.
[1]
This lack of
clarity between standards on confidentiality and data integrity is in the significance emphasizing the
importance of clear communication on encryption norms and control measures, especially against the
backdrop of growing concerns about privacy within digital environments. With user satisfaction levels of 91%
and more, the figures certify that UPI 3.0 has struck a good balance between security measures and user
convenience." The high satisfaction with ease of use (mean 4.34) indicates that the advanced safety
requirement features in UPI have not made it difficult to engage in monetary transactions, which is one of the
major concerns when building secure systems. Transaction speed and success rate satisfaction (4.28, 4.24) are
tied to infrastructure enhancements such as blockchain integration and AI-based routing optimization.
Nevertheless, the lowest score of 4.05 for problem resolution underlines failures in customer service
frameworks, which indicates that as volumes grow towards a billion transactions daily by FY2027, grievance
redressal mechanisms should scale accordingly. The multiple regression reveals compelling evidence that
perceived security is the most significant determinant user
variance than any other variable. This has important implications for the development of digital payment
platforms in that it indicates that investments made into systems security also result in direct benefits to user
-0.143) for perceived risk suggests that despite
the tight security measures in place, some remain concerned about fraud and financial loss which undermines
satisfaction; a finding that contributes to the case presented by Shree et al. were written that highlight the value
of holistic strategies to mitigate risks.
[4]
The high level of explanatory power (R²=0.782) of the model indicates that the chosen constructs account for
a large majority of those determinants playing a role in UPI satisfaction. The strong positive influence of social
he power of network effects and peer endorsements in digital payment
adoption, consistent with diffusion of innovation theory. This result implies that satisfied users lead to natural
growth in subscription through word-of-mouth effects, which forms a virtuous cycle of penetration and
satisfaction. The implications of the study are Policy makers, National Payments Corporation of India and
Regulatory bodies. The proven priority of security in fueling satisfaction validates ongoing investment in AI-
based fraud detection, biometric authentication and blockchain solutions. However, the awareness-adoption
gap observed in some features may call for focused digital literacy campaigns, especially for blockchain and
encryption technologies due to its technical complexity. When UPI goes international to 27 countries, it has to
understand that security is a matter of perception and the perception quotient would vary in different cultural
of satisfaction via
multi-layered security may not be directly translatable to markets with different fraud profiles or trust
dynamics. Adaptation Tactics Adaptation strategies should account for local security issues, but hold onto
fundamental architectur
satisfaction frameworks as never before. AI-driven fraud detection systems that helped slash identification-
based fraud by 47% in 2025 will need to evolve and tackle new threat vectors such as deepfake authentication
attempts, advanced social engineering attacks, etc. The results of the study indicate that users are responsive to
security innovations, yielding stronger protection without sacrificing convenience, and thereby mandate for
more technological advancement.
7. Conclusion
The findings of this study confirm that UPI 3.0 has improved the user satisfaction by introducing new security
functionalities, and perceived security is the most important factor influencing satisfaction. The findings of the
study validate that with its focus on innovation in digital payments, coupled with strong security architecture
and easy-to-use applications, India has developed UPI as a benchmark by which real-time payment systems in
other countries can be compared. We believe the UPI has shown how technology can be an effective enabler of
financial inclusion without compromising on trust and security, with more than 491 million active users
transacting over 640 million transactions per day. High satisfaction (91.5%) and high usage of some new
security features such as biometric authentication (68%), dynamic QR code(79.1%) are the reflections of its
adoption by users, suggesting that they have been using
analysis on perceived security, ease of use and trust which explain 78% variance satisfaction are actionable for
designers of payment systems all over the world. With UPI now scaling internationally and focus on moving to
1 billion daily, the balance between security and usability will be a key factor towards continued success and
user trust in the digital payment revolution in India.
CRediT Author Contribution Statement
Pankajkumar Anawade: Conceptualization, Methodology, Supervision, Validation, Formal analysis, Writing
review & editing, Project administration. Deepak S. Sharma: Data curation, Investigation, Software, Formal
analysis, Visualization, Writing - Original draft, Writing - Review & editing. All authors have read and approved
the final version of the manuscript for publication and agree to be accountable for all aspects of the work,
ensuring that questions related to the accuracy or integrity of any part of the work are appropriately
investigated and resolved.
Funding Declaration
This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-
profit sectors.
Data Availability Statement
The data that support the findings of this study are based on primary survey responses collected from 450
participants. The dataset is not publicly available due to privacy and ethical considerations; however,
anonymized data can be shared by the corresponding author upon reasonable request.
Conflict of Interest
There is no conflict of interest.
Artificial Intelligence (AI) Use Disclosure
The authors confirm that there was no use of artificial intelligence (AI)-assisted technology for assisting in the
writing or editing of the manuscript and no images were manipulated using AI.
Supporting Information
Not applicable.
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