AbstractThis study explores the impact of digital payment barriers, the preference for digital payment systems, and the adoption patterns of digital payment methods on financial inclusion in Tamil Nadu, India. The research aims to analyse how digital payment obstacles–such as privacy, security, accessibility, and trust–affect users’ adoption and usage of digital payment systems. Additionally, it investigates consumer preferences for features like convenience, security, and ease of use, as well as how these factors influence overall financial inclusion. Data was collected through an online self-administered questionnaire distributed to a sample of 457 participants, utilising a stratified random sampling method. The findings reveal a strong positive relationship between user preferences for digital payment systems and financial inclusion, with an estimated influence of 0.7158 (p < 0.001). Surprisingly, digital payment barriers were found to have a positive impact (Estimate = 0.8042, p < 0.001), suggesting that these challenges may indirectly encourage improvements in digital payment systems, such as enhanced security measures. Furthermore, frequent usage of digital payment systems was shown to significantly enhance financial inclusion (Estimate = 1.3254, p < 0.001). The study emphasises the importance of addressing consumer concerns, such as trust and hidden charges, to foster increased adoption. Additionally, demographic variations, particularly between urban and rural populations, highlight the need for tailored solutions to improve digital payment access. A key novel finding is that consumers’ preferences for digital payments have a direct and positive influence on their financial participation, underscoring the user-driven nature of digital adoption. This research provides valuable insights for businesses, policymakers, and financial institutions aiming to enhance financial inclusion through secure, user-friendly, and accessible digital payment platforms.
Ranganathan Venkatesan (Wed,) studied this question.