Digital financial services usage and its effect on financial literacy: Indonesian evidence

Purpose – The present study helps to explore the determinants of Digital Financial Literacy (DFL) in Indonesia by considering the interaction of knowledge, attitudes, financial ability, and digital financial services in determining the level of literacy. Research methodology – The data was gathered on 200 demographically varied people and were analyzed with the help of Partial Least Squares Structural Equation Modeling (PLS-SEM) to measure correlations between the variables and their reliability, validity, and predictive abilities. Findings – Digital financial knowledge emerged as the strongest predictor of literacy (β = 0.296, p < 0.001), followed by financial capability (β = 0.237, p = 0.007) and user attitudes (β = 0.214, p = 0.004), while digital financial service usage showed only a weak and marginally significant effect (β = 0.105, p = 0.051). Education level significantly moderated the impact of knowledge on literacy (β = 0.175, p < 0.01), and gender influenced the link between capability and literacy (β = 0.192, p < 0.05). These results highlight that digital inclusion in Indonesia de-pends not only on access but also on enhancing financial knowledge, capability, and equitable digital literacy across regions and demographic groups. Research limitations – The study focused exclusively on the Indonesian context, potentially limiting generalizability to other markets with different digital infrastructure and financial ecosystems. Practical implications – Findings suggest policymakers and industry professionals should develop comprehensive approaches that integrate educational initiatives, skill development, and user-friendly service design rather than simply expanding service availability. Originality/Value – This research uniquely identifies the gap between digital financial service availability and actual literacy levels, challenging the assumption that increased access automatically enhances financial literacy.