Merchants and customers alike are looking for alternatives to traditional payment methods, and huge tech companies, fintechs, challenger banks, and other non-bank entrants are disrupting the industry by providing better user experiences at lower rates. With the continuous displacement of cash and checks, exacerbated by consumers’ adoption of digital purchasing and their desire to minimise contact with physical infrastructure and items, the payments ecosystem will face even more disruption. The main aim of this paper is to analyse the customer’s awareness towards innovations that deliver the digital payment system in banking sector with special reference to Dharmapuri District. This study is focused on the digital payment system of public (State Bank of India bank and Canara bank) and private (ICICI Bank and HDFC Bank) banking sectors in Dharmapuri District. By using the convenience sample method, 200 respondents were selected for this study. Percentage analysis, Weighted Average and Chi-Square test were used to analyse the collected primary data. Secondary data were collected from RBI Annual reports, bulletins, journals and magazines. The study concluded that most of the customers were not aware of the innovative digital payment system.