It is a well-known fact that a digital revolution is sweeping the world today, changing our way of life. High penetration of smartphones and affordable mobile data; growing internet population; rapid growth of e-commerce; the rise of super apps, quick commerce and social commerce; and a strong shift towards digital payments, are crucial drivers behind this change.
According to a recent Mckinsey & Company report, around 25 per cent of India's 850 million internet users shop online and the number is expected to more than double by 2030. Similarly, India’s digital transactions have experienced an exponential growth driven by Unified Payments Interface (UPI), which operates under the National Payments Corporation of India (NCPI) and is regulated by the Reserve Bank of India (RBI). As of June 2025, UPI system serves 491 million individuals, and is recognised as the world’s leading real-time payment system. Over 65,000 crore digital transactions worth more than ₹12,000 lakh crore were recorded during Financial Years 2020-25. Digital platforms have also expanded access to financial services for underserved communities, small vendors and rural users, significantly increasing financial inclusion.
Amidst all this, the growing presence of artificial intelligence (AI) in consumers’ lives cannot be overlooked. Advancing at great speed, data driven AI holds vast promise for consumer welfare by personalising products and services, optimising customer support, and addressing disputes online.
Advantages
In today’s fast-paced world, where everyone leads a busy life, online shopping and digital transactions offer multiple advantages. Most importantly, they provide convenience by allowing consumers to shop or transact 24/7, 365 days a year, from anywhere with an internet connection.
Advantages of online shopping include access to thousands of online stores globally, without leaving the comfort of home, thus avoiding traffic, crowds and the time-consuming process of physically visiting the stores. Consumers can choose from a wide range of goods and services at competitive prices, easily compare deals, and take advantage of various schemes, offers, and discounts. It helps them make informed purchase decisions based on customer reviews and shoppers can avoid sales pressure often experienced in physical stores.
Likewise, digital transactions offer several advantages such as speedy processing and early confirmation of payments. They eliminate costs associated with traditional payment methods, provide digital proof of transactions that can be viewed or downloaded, and facilitate better financial management through automated payments for recurring bills and subscriptions. Additionally, digital payments reduce the need to carry cash, offering a safer alternative.
AI, when used ethically and properly, can greatly benefit consumers by personalizing product recommendations based on customer data and behaviour. AI systems can analyse past interactions to suggest customized solutions and provide proactive advice to help consumers avoid potential problems. AI-powered chatbots and virtual assistants also offer round-the-clock customer support, enhancing the overall consumer experience.
Disadvantages
While online shopping and digital transactions have their advantages, there are some serious challenges too that one needs to be aware of.
During online shopping, personal assistance will not be available and it is not possible to physically touch and examine the product. We may order for one and we may end up getting a product of a different colour, quality, etc. over which we will have very little control. There could be delays in delivery, and the returns and exchanges experiences could be time consuming and tiring, with little support from customer care. The complaints process could be tiring and unresponsive with very few to no platform providing an escalation matrix for complaints. Besides, there is the major risk of fraud with online payments.
Reviews posted about products and services online prove to be an important source of information for consumers to make their purchase decisions. However, today, fake reviews like a fabricated positive review to entice consumers into purchasing a product, suppression of a negative review, posting negative reviews on competitors’ pages, taking money or benefits in kind and posting positive reviews dominate the e-commerce space, thus misleading consumers often.
Dark patterns are manipulative user interface practices that subtly push consumers toward unintended purchases or increased spending. Some examples of dark patterns include drip pricing, bait and switch, nagging, false urgency, basket sneaking and so on. These affect consumer autonomy, driving over consumption and increased spending.
Digital transactions face threats from phishing, hacking, unauthorized transactions, malware, and ransomware. These can lead to significant financial losses for consumers, with perpetrators often hard to track due to their remote locations.
Risks associated with artificial intelligence include lack of transparency, manipulative practices that could mislead consumers, threats to privacy and vulnerabilities in security systems.
Way forward
While it is an established fact that the digital world has become an integral part of our life, we, as consumers, need to understand the nuances better, be more alert and aware to benefit from it and stay protected at the same time.
The Consumer Protection Act, 2019, and the E-Commerce Rules, 2020, lay foundational legal frameworks to safeguard consumers from unfair trade practices online.
On the issue of fake reviews, the Bureau of Indian Standards (BIS) has already published a voluntary standard - IS 29000:2022, for consumer online reviews. Presently, the Ministry of Consumer Affairs is considering issuing a Quality Control Order on fake reviews, based on the Indian Standard, which will make it mandatory for platforms to implement rules for reviewing and publishing reviews, to protect consumers’ interests. Similarly, The Central Consumer Protection Authority, set up under the aegis of the Consumer Protection Act, has issued Guidelines on Prevention and Regulation of Dark Patterns.
The Reserve Bank of India also enforces measures to protect against unauthorised digital transactions and promotes resources like the SancharSaathi App for fraud assistance. Despite these frameworks, stronger enforcement and consumer vigilance remain vital. AI should be harnessed as a tool operating under human control, ensuring privacy and transparency.
Ultimately, responsible use of digital technology and awareness of potential risks will allow consumers to enjoy the benefits of the digital world safely and effectively.
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