Mobile payment apps have transformed daily transactions across urban India, driven by UPI's growth exceeding 15 billion monthly transactions in 2025. This study examines their effects on savings behavior among middle-income households (₹5-15 lakhs annual income) in Indore, a key Tier-2 commercial center. Primary survey data from 200 respondents (aged 25-55) shows weekly app usage negatively predicts savings rates (β = -1.10, p < 0.001), with a mean 3.9 percentage point decline post-adoption. Income and age moderate this relationship, providing partial protection. While digital wallets enhance convenience and inclusion, they increase spending through reduced transaction friction. Recommendations focus on behavioral nudges like automated savings features and financial literacy integration for sustainable adoption.