May 31, 2024Open Access

Financial Literacy, Risk Perception, and Paylater Adoption: A TPB Analysis

Puntos clave

Only 44.85% of respondents demonstrated strong financial literacy, indicating a gap in financial understanding among millennials.
Financial literacy does not directly influence the intention to use Paylater, as perceived risks hold more significance.
Descriptive analysis and SEM-PLS were utilized to assess the relationship between financial literacy, risks, and intentions toward Paylater use in millennials across Jabodetabek region in Indonesia now showing remarkable results despite financial gaps in knowledge and behavior weaknesses maintained by them toward this service offering greater power under accrual risks involved across various layers toward their individual financial intentions setting forth predicaments to observe in practicing their decisions towards adapting for newer facilities on conservative grounds outlined here that as long as there’s social pressure present it can ensure efficient performance in setting aims toward alternate engagements while managing risk levels associated, which if featured accurately can build more acceptance in the long run with sustained measure levels compared against traditional banking methods. They largely prefer conditions of acceptance limiting associated borrowing risks indicated under poor understanding or situational awareness, suggesting necessary improvements in financial education within this demographic to avoid misunderstandings in future intent management.

Resumen

Background: Paylater, a service allowing users to defer payments with borrowed money, offers convenience but also potential risks.Purpose: This study aimed to 1) assess financial literacy among millennials in Jabodetabek, 2) analyze how financial literacy and risk perception influence the intention to use Paylater, and 3) explore the impact of social influence and perceived control on this intention. Design/methodology/approach: Descriptive analysis and SEM-PLS analysis were employed. Research model was developed from Theory Planned of Behavior with 4 variables: attitude, subjective norms, perceived behavioral control, and intention to use. Risk perception variables were used in the model, included performance risk, time risk, social risk, security risk, and financial risk. Financial literacy could be seen from 3 measurements including financial knowledge, financial behavior, and financial attitudes. Findings/Result:The results showed that only 44.85% of respondents demonstrated strong financial literacy. Financial literacy itself did not directly influence the intention to use Paylater. However, perceived risks like performance delays, security concerns, and financial burdens negatively impacted attitudes towards using Paylater. Social pressure and perceived control over using Paylater positively influenced the intention to use it. Conclusion: Financial literacy in millennial generation showed well literacy category. Financial literacy had no effect on the interest in using paylater. Meanwhile, performance risk, time risk, security risk and financial risk had a negative and significant influence on the attitude of using paylater, and there was no influence of social risk on the attitude of using paylater. In addition, attitudes, subjective norms, and perceived behavioral control had a positive and significant effect on the interest in using paylater.Originality/value (State of the art): Paylater as an easy payment tool but has several risks, through the TPB approach combined with the risk perception variables and financial literacy can be used to analyze intention to use of paylater in the millennial generation. Keywords: financial literacy, millennial generation, paylater, risk perception, subjective norm

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