DIGITAL PAYMENT ADOPTION AND ITS IMPACT ON PROFITABILITY IN INDIAN PUBLIC SECTOR BANKS A MACHINE LEARNING APPROACH

The digital revolution has fundamentally transformed profitability paradigms in India's public sector banking sector, redefining payment platforms as strategic assets rather than operational necessities. This study investigates the differential impacts of digital payment adoption across transaction platforms using advanced machine learning techniques. Analysis reveals that while retail payment systems demonstrate strong profitability correlations, traditional institutional channels maintain unexpected significance in the digital era. The findings illuminate how digital infrastructures create value through distinct mechanisms—retail platforms driving volume-based efficiencies and institutional systems preserving high-margin operations. These insights challenge conventional banking frameworks by demonstrating payment systems' evolution into core profitability drivers. For financial institutions navigating India's digital transformation, the research provides critical strategic guidance on infrastructure investments and ecosystem development. The study contributes to emerging market banking literature by establishing a nuanced understanding of digital payment monetization and its implications for competitive positioning in increasingly platform-driven financial markets.