Financial Literacy and Its Impact on Cashless Economy to Foster Digital Payment: A Pilot Study in Twin Cities

Abstract

Purpose - The fast-growing digital financial technologies are changing payment systems and speeding up the global trend of becoming a cashless society. This study seeks to understand how the main behavioral and technological aspects: attitude towards digital payments, subjective norms, perceived behavioral control, intention to use digital payments, and adoption of digital payments affect the growth of a digital payment system. This research will explain the use of computerized payment from both consumers' and traders'/merchants' perspectives.

Design/Methodology/Approach - An empirical study design was used, obtaining responses from a total of 150 respondents, targeting 75 consumers and 75 traders or merchants. Participants completed structured questionnaires that utilized a five-point Likert scale. The completed surveys underwent multiple regression analysis to assess the associations among the factors and to evaluate the hypotheses formulated. The analysis was conducted in SPSS.

Findings - The regression results suggest that, generally, a positive attitude toward digital payments, favorable subjective norms, the intention to utilize online installments, and the adoption of digital payments positively influence the cashless economy. Perceived behavioral control, however, shows a negligible impact in certain situations. The results indicate that the behavioral intention and actual adoption of digital payment systems are significant to the promotion of cashless financial systems.

Originality/Value - This research adds to the existing body of literature by offering data from both consumers and merchants from an emerging economy perspective. Policymakers, banks, and service providers can rely on the findings to better understand how to engage consumers and merchants to increase the use of digital payments and advance their countries toward a digital economy.

Keywords: Digital Payment Adoption, Cashless Economy, Attitude, Subjective Norms, Perceived Behavioral Control, Intention to Use.