The Indian economy has made significant progress in digitization over the past two decades. The demonetization in 2016 played a significant role in promoting transactions and the government has been actively encouraging people to adopt digital payment methods. The widespread availability of Smartphones and the introduction of mobile payment applications have made it easier for people to make digital transactions. For the study, the researcher has examined the growth of digital payment systems in India and considered the performance of digital payments with reference to small retailers in Erode district. The secondary data have been collected for 11 years and the primary data have been collected from the small retailers in Erode district. The Result shows that RTGS and UPI have a maximum transaction value and IMPS has a maximum growth in the study period. As many changes were made in modes of digital payments by National Payments Corporation of India (NPCI). User-friendly, easy transferability and convenience were the most preferred factors to choose the digital payments by the small retailers.