Factors Influencing Adoption of Digital Wallet in Nepal

Digital wallets have emerged as a crucial part of modern financial systems because they allow for quicker, more comfortable and widespread transactions in everyday life. However, security and privacy issues still remain as major challenges for their mass adoption, especially in emerging countries. In this context, the present study studies the factors affecting the adoption of digital wallets in Nepal, considering the behavioral and technological factors which affect the acceptance of digital wallet by the users. This study uses the Theory of Planned Behavior (TPB) and explanatory research design to analyze the influence of the independent variables selected on the behavior of adopting digital wallets. The data were acquired by using a non-probability sampling technique with the 320 respondents by using a structured questionnaire. Partial Least Squares Structural Equation Modeling (PLS-SEM) was used in the empirical analysis to test the hypothesized relationships between constructs. The results show that Trust, Compatibility, Relative Advantage, and Perceived Behavioral Control have significant influence on digital wallet adoption in the Nepalese context while Perceived Risk does not show any statistically significant effect. The findings indicate the importance of trust-related and utility related factors in explaining adoption, and suggest that risk perception might not play as significant a role among those who have greater experience in the use of digital financial services. Overall, the study joins the growing body of literature on the adoption of fintech and brings context-specific evidence from Nepal, along with implications for policy makers, financial institutions, and fintech service providers seeking to boost adoption and promote financial inclusion in low- and middle-income countries.