Enhancing financial inclusion in Pakistan: Moderation mediation roles of financial digital literacy and consumer digital protection for mobile money adaptation and usage

Abstract

Despite the transformative potential of mobile money (MM) for financial inclusion (FI) in Pakistan, its adaptation faces challenges, particularly concerning user trust and capability. This study investigates the mediating role of Digital Consumer Protection (DCP) and the moderating role of Digital Financial Literacy (DFL) in the relationship between MM adaptation & usage and FI outcomes in Pakistan. Employing Partial Least Squares Structural Equation Modelling (PLSSEM) on a dataset of 413 valid responses, the findings confirm that MM usage positively affects FI. Crucially, Digital Consumer Protection positively mediates this relationship, enhancing trust and mitigating risks associated with digital transactions. Furthermore, Digital Financial Literacy positively moderates the link, significantly strengthening the effectiveness of mobile money services on financial inclusion by improving user understanding and confidence. This research offers novel insights by empirically modelling the intertwined effects of DCP and DFL within the Pakistani context using the UTAUT2 framework, thereby contributing to the behavioral finance literature. Practically, the results underscore the imperative for policymakers and financial institutions to implement targeted educational programs and robust regulatory measures to foster a secure and informed digital financial ecosystem, maximizing the benefits of mobile money services for broader financial inclusion