This research paper explores the effect of digital payment systems on microfinance and rural areas of Uttar Pradesh and Uttarakhand, India. It aims to understand how digital payments affect the assessment of borrower’s creditworthiness, their rate of adoption, and the social consequences of microloans offered by Company A. By employing a mixed methods approach that integrates quantitative data analysis with qualitative interviews. This study seeks to shed light on the dynamics of digital payment adoption among rural borrowers and its impact on financial inclusion.