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Analysis of the Effect of Financial Literacy, Practicality, and Consumer Lifestyle on the Use of Chip-Based Electronic Money Using SEM

Author

Listed:
  • Bob Foster

    (Faculty of Economics and Business, Universitas Informatika dan Bisnis Indonesia, Bandung 40285, Indonesia)

  • Sukono

    (Department of Mathematics, Faculty of Mathematics and Natural Sciences, Universitas Padjadjaran, Sumedang 45363, Indonesia)

  • Muhamad Deni Johansyah

    (Department of Mathematics, Faculty of Mathematics and Natural Sciences, Universitas Padjadjaran, Sumedang 45363, Indonesia)

Abstract

Industry 4.0 trends have a significant influence on the acceleration of technology in Indonesia. The development of financial technology has shifted conventional transactions to electronic money as a means of payment with a digital system. Electronic money users in Indonesia continue to grow, while several factors affect consumer decision making to use electronic money. This study aims to analyze the effect of financial literacy, practicality, and consumer lifestyle on consumer interest in using chip-based electronic money. This research uses a quantitative approach with primary data obtained through questionnaires to chip-based electronic money users. The analytical method used is Structural Equation Modeling (SEM) to verify the factors that determine the indicators of the findings of interest in the use of chip-based electronic money. The study results indicate that: (a) Financial literacy has a significant positive effect on interest in using chip-based electronic money by 14.6%; (b) Financial literacy has a significant positive effect on practicality in the use of chip-based electronic money by 51.8%; (c) Practicality in the use of chip-based electronic money has a significant positive effect on consumer lifestyles by 71.3%; (d) Practicality has a significant positive effect on the use of chip-based electronic money by 25%; and (e) Consumer lifestyle has a significant positive effect on the use of chip-based electronic money by 52.8%. The study results imply that it can be used as a consideration for making monetary policy in Indonesia, dealing with the rapid growth in the use of chip-based electronic money.

Suggested Citation

  • Bob Foster & Sukono & Muhamad Deni Johansyah, 2021. "Analysis of the Effect of Financial Literacy, Practicality, and Consumer Lifestyle on the Use of Chip-Based Electronic Money Using SEM," Sustainability, MDPI, vol. 14(1), pages 1-17, December.
    • Handle: RePEc:gam:jsusta:v:14:y:2021:i:1:p:32-:d:707580
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    References listed on IDEAS

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    1. Shilpa Aggarwal & Valentina Brailovskaya & Jonathan Robinson, 2020. "Cashing In (and Out): Experimental Evidence on the Effects of Mobile Money in Malawi," AEA Papers and Proceedings, American Economic Association, vol. 110, pages 599-604, May.
    2. Adele Atkinson & Flore-Anne Messy, 2012. "Measuring Financial Literacy: Results of the OECD / International Network on Financial Education (INFE) Pilot Study," OECD Working Papers on Finance, Insurance and Private Pensions 15, OECD Publishing.
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    Cited by:

    1. Trinh Quang Long & Peter J. Morgan & Naoyuki Yoshino, 2023. "Financial literacy, behavioral traits, and ePayment adoption and usage in Japan," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 9(1), pages 1-30, December.

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