Digital Payment Systems and Data Protection: Challenges and Risk Mitigation in Indian Commerce

Muskan Saha; Rachna Thakkar

doi:10.69968/ijisem.2026v5Si140-47

Authors

Muskan Saha Student, Department of Commerce St. Xavier’s College of Management & Technology, Patna
Rachna Thakkar Assistant Professor, Department of Commerce Xavier University, Patna

DOI:

https://doi.org/10.69968/ijisem.2026v5Si140-47

Keywords:

Digital Payment, Security, Challenges, Risk Mitigation, Regulatory Framework

Abstract

Digital payment systems have become vital to present-day commerce, instigating a mounting necessity to scrutinise their cybersecurity vulnerabilities and defences. This research focuses on empathetic understanding of the embryonic security landscape surrounding these platforms.

India's digital payment ecosystem has experienced exponential growth, driven by initiatives such as UPI and government efforts to promote a cashless economy. However, this rapid digitisation presents noteworthy challenges concerning data protection and security, necessitating a robust regulatory framework and proactive risk mitigation strategies to build and maintain consumer trust.

The objectives of this paper are to identify the major challenges and risks associated with data protection in digital payment transactions from both customer and business perspectives, and to analyse effective risk mitigation strategies for digital payment systems and data protection, keeping in view the regulatory framework for digital payment systems. The evaluation of data protection is taken into consideration. This focuses on primary data collected through a structured questionnaire, which explores these challenges, including threats like phishing attacks, identity theft, and the complexity of existing legal frameworks, and to find out the suggestions for risk mitigation strategies that combine technical, regulatory, and educational measures

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