Financial Inclusion or Financial Vulnerability? The Dual Effects of Digital Payment Platforms on Consumer Behaviour

The rapid expansion of mobile wallets and digital transaction platforms has transformed financial systems worldwide, reshaping the way consumers interact with money and manage spending. In Pakistan, services such as Easypaisa, JazzCash, and Raast have accelerated financial inclusion and improved efficiency, yet their behavioural consequences remain underexplored. This study aims to examine how the adoption of digital transaction platforms influences consumer spending behaviour, with a particular focus on psychological factors such as impulsivity, budgeting discipline, and mental accounting. To test the determinants of adoption and spending outcomes, was performed using multiple regression and the generalised method of moments was used. The findings reveal that income, education, digital literacy, mobile penetration, and financial inclusion positively influence digital payment adoption, whereas age and cultural orientation act as constraints. Behavioural analysis further indicates that frequent users of digital platforms experience a reduced “pain of paying,” which encourages impulsive purchases, weaker adherence to budgeting, and diminished financial control, particularly among younger consumers. These results highlight the dual nature of digital finance: while it enhances inclusion and economic activity, it also increases risks of overspending and financial vulnerability. The study recommends integrating financial literacy into education systems, encouraging fintech providers to embed budgeting and savings tools, and strengthening regulatory oversight to ensure that the benefits of digital transaction platforms are maximised while their behavioural risks are mitigated.