The Power of Digital Payments in Transforming Financial Services
Description
Digital payment systems in Indonesia, including QRIS, GoPay, OVO, DANA, and LinkAja, have experienced rapid expansion driven by increasing smartphone penetration, improved digital infrastructure, and government-led financial inclusion initiatives. However, adoption remains uneven across demographic segments, particularly between urban and rural users and across different age groups. This study examines the determinants of digital payment adoption by integrating the Technology Acceptance Model, Theory of Planned Behavior, and Diffusion of Innovations, along with financial literacy and behavioral nudges. A quantitative approach was employed using Structural Equation Modeling–Partial Least Squares. Data were collected from 200 active digital payment users in Indonesia through a structured survey. The analysis evaluated both the measurement and structural models, including validity, reliability, multicollinearity, explanatory power, predictive relevance, and hypothesis testing. The results show that all proposed hypotheses are statistically significant. Perceived ease of use and perceived usefulness significantly influence users’ attitudes toward digital payment systems. In turn, attitudes, perceived behavioral control, behavioral nudges, and financial literacy significantly affect adoption behavior. Among these variables, attitudes emerge as the strongest predictor of adoption, highlighting the critical role of user perception in shaping digital financial behavior. The model demonstrates moderate explanatory and satisfactory predictive relevance for adoption, while attitudes and financial literacy exhibit lower but meaningful explanatory power. Overall, digital payment adoption is shaped by a combination of cognitive, behavioral, and financial factors. The study contributes an integrated framework for understanding adoption behavior in emerging economies and provides practical implications for policymakers and digital service providers