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The rapid growth of digital financial services has transformed the economic landscape of India, particularly among traditionally underserved segments of society. In this context, the Pradhan Mantri Street Vendor's AtmaNirbhar Nidhi (PM SVANidhi) Scheme, launched by the Government of India in 2020, has emerged as a significant initiative aimed at providing affordable working capital loans to street vendors affected by the COVID-19 pandemic. Beyond facilitating access to formal credit, the scheme promotes digital financial inclusion through cashback incentives and rewards linked to digital transactions. This study examines the role of PM SVANidhi in accelerating digital financial transformation among street vendors, with a specific focus on the effectiveness of cashback and Unified Payments Interface (UPI) incentives in encouraging digital payment adoption. The research is based on secondary data collected from government reports, Ministry of Housing and Urban Affairs (MoHUA) publications, PM SVANidhi dashboard statistics, Reserve Bank of India (RBI) reports, National Payments Corporation of India (NPCI) data, journal articles, and other relevant scholarly sources. The study adopts a descriptive and analytical approach to evaluate the scheme's contribution to increasing digital transaction volumes, enhancing financial literacy, and integrating street vendors into the formal financial ecosystem. The findings indicate that cashback incentives and digital transaction rewards have played a crucial role in motivating vendors to adopt cashless payment methods. The widespread use of UPI-based applications has increased transaction transparency, improved financial record-keeping, and strengthened vendors' access to formal financial services. Furthermore, the incentive-based framework has contributed to reducing dependence on cash transactions while fostering confidence in digital payment systems among small-scale entrepreneurs. However, challenges such as limited digital literacy, inadequate technological infrastructure, cybersecurity concerns, and regional disparities continue to affect the scheme's overall effectiveness. The study concludes that PM SVANidhi has successfully combined financial assistance with digital empowerment, creating a sustainable model for promoting financial inclusion among urban informal workers. The integration of cashback benefits and UPI incentives has not only encouraged digital payment adoption but has also supported the broader objectives of India's digital economy agenda. The research recommends enhanced digital literacy programs, improved technological accessibility, and continuous monitoring of incentive mechanisms to maximize the long-term impact of the scheme. The findings contribute to the growing literature on digital financial inclusion and provide valuable insights for policymakers seeking to strengthen digital transformation initiatives within the informal sector.