E-Commerce and Digital Transactions in the Age of Artificial Intelligence

Abstract : The rapid-fire elaboration of technology has converted the geography of commerce, giving rise to a digital frugality where electronic deals and online commerce dominate global business conditioning. This chapter examines the dynamic relationship between e-commerce and digital deals, with a particular focus on the transformative part of Artificial Intelligence (AI) in shaping the way businesses and consumers interact in 2025. E-commerce, formerly limited to simple online storefronts, now leverages AI for substantiated marketing, intelligent product recommendations, automated client service, fraud discovery, and force chain optimisation. Contemporaneously, digital payment systems have evolved from traditional card- grounded styles to encompass biometric verification, real-time Unified Payments Interface (UPI) systems, blockchain integration, and AI-driven fiscal services. AI has not only enhanced functional effectiveness and client experience but also introduced complex challenges related to data sequestration, ethical operation, and algorithmic bias. This chapter examines these developments through both global and Indian perspectives, representing contemporary case studies similar to Amazon, Flipkart, Reliance JioMart, and Paytm. The impact of government regulations like the Digital Personal Data Protection (DPDP) Act and global frameworks such as the EU's GDPR are also bandied in the environment of securing stoner data in an AI-powered business. In conclusion, this chapter presents a view of how AI is converting the e-commerce and digital payments environment. It advocates for a balanced approach where invention is matched with ethical responsibility and nonsupervisory oversight. As we move further into an AI-driven future, the need for transparent, inclusive, and secure digital commerce systems becomes not just desirable but essential for sustainable, profitable growth.