Technological developments have changed every aspect of life and digital penetration is changing how investors access the various investment avenues. The households can review and monitor their accounts, purchase and sale of investments can be made on their own, the interference of outsiders can be eliminated and thereby gain more control on investments. Digital penetration has made an influence on each of the factors considered while making investment decisions. This influence made the investment more liquid, safe, convenient, provides higher returns and offers less risk. For satisfying the households in using digital payment system there are various factors that attract them towards the digital payment system The study analyses the influence of digital penetration on the investment pattern and the factors that attract the households towards digital payment system. The primary source of data was a sample of 784 households in Kerala who use at least any of the digital payment methods for investment and having an income of more than ₹10,000 per month. In the case of ‘Digital payment system is used for transactions in investment – fully digital’ a positive d value existed indicating the same direction of movement of lower to higher income group resulting in improved levels of agreement that the digital penetration affects investment pattern. Confirmatory factor analysis was conducted on latent construct namely attraction towards digital payment system as a reflection on 13 observed variables which were identified as 4 principal components such as reach and low cost, clarity and centralised regulation, safety and timely acknowledgement and all the 4 components are good predictors of Attraction towards digital payment system. Digital penetration can democratize access to investment opportunities, allowing smaller investors to participate, provide with more data and analytics leading to more informed and rational investment decisions.