In recent decades, the country has seen a significant increase in the use of digital payments. A digital payment, also known as an electronic payment, is the transfer of value from one payment account to another using a digital device such as a mobile phone, POS, or computer, as well as a digital communication channel such as mobile wireless data or SWIFT. Mode of digital payment commonly used by the citizens of the country are bank transfers, mobile money, and payment cards i.e., credit, debit, and prepaid cards. The study is an attempt to analyze how various forms of digital payment evolved in the past and how COVID-19 impacted the digital payment systems in India. The study also analyzes the perspective of consumers towards a switch from traditional payment to digital payment. It has been observed in the study that despite the fact that the digital India campaign began in 2015, factors such as demonetization, Jio networking, and the COVID-19 outbreak acted as catalysts for the true progress of digital payment in India, also after COVID-19 pandemic, people were concerned about health regulations and were afraid of cash transactions which made them switch to this mode, resulting in a rise in the usage of different modes of digital payment systems.