FROM CASH TO CLICKS: DETERMINANTS OF DIGITAL PAYMENT ADOPTION IN PAKISTAN’S EMERGING ECONOMY

Abstract

This paper analyzes the issues causing difficulties in the use of digital payments in Pakistan. It acknowledges the growth of Fintech and mobile payments and attempts to analyze the adoption of digital payments in Pakistan in relation to behavior, technology, and socio-economic factors. The author elaborates the choice of an interpretivist paradigm and an inductive approach, with the collection of primary data through semi-structured interviews with users of digital payments in the major cities of Pakistan. The author mentions ten (10) themes that he/she used to do a thematic analysis in a qualitative study: technology, trust and security, socio-culture, economy and finance, awareness and digital literacy, the institution and regulation, merchant and ecosystem, psychological and behavior, infrastructure and access, and the pandemic and/or crisis. He/she cites ‘the Covid-19 Pandemic’ as one of the ten (10) themes that he/she used in his/her thematic analysis. It seems as if he/she is trying to convey that the pandemic crisis is one of the major factors increasing the use and impact of digital payments. The author mentions the ease of use and functionality of digital payment systems and their impact on increasing the use of digital payments. System reliability and compatibility, and a cash culture can reduce the use of digital payments. Additionally, low socio-economic conditions, the level of income, and social factors around gender and social norms can reduce the adoption of digital payments. Given the limited provision of infrastructure, the level of merchant digital payments and the support of the digital payment systems, the adoption of digital payments will be limited until adequate structures are put in place. The author acknowledges that the pandemic crisis is both an enabler for digital payments and a vulnerability for trust and access. The research contributes to an understanding of the intricate, multi-faceted, context-dependent variables influencing the adoption of digital payments in Pakistan and serves as a helpful guide to policymakers, fintech providers, and financial institutions to assist them in improving digital financial inclusion and user engagement.