From Connectivity to Inclusion: Unveiling the Fintech Journey of Urban and Rural Consumers in Pakistan

Abstract

Digital payment platforms, Mobile banking app, Online banking service and Branchless banking solutions especially during the COVID-19 pandemic in the last number of years. Despite these achievements, access to formal financial services is unequal throughout the country. The gap between urban and rural population remains internet access, financial awareness, technological infrastructure, and digital skills. Factors that affect and discuss the role that is played by the utilization of fintech services in financial inclusion in Pakistan. The research is grounded on the Technology Acceptance Model (TAM) that considers personal innovativeness, government support, trust in Fintech, behavioral intention and actual usage behavior. A quantitative approach was adopted for the study. The data was gathered using a survey conducted with people who are aware of digital financial services. Validity was screened before analysis of data, 220 people participated in urban and rural Pakistan and data was analyzed on SmartPLS using PLS-SEM. Perceived usefulness, personal innovativeness and trust in Fintech are very significant drivers of consumers' intentions to use digital financial services. In this context, trust proved one of the most significant factors, the significance of security, reliability and confidence in digital financial platforms. The results also indicate that higher level of behavioral intention is positively associated with more actual use of Fintech services, thereby aiding financial inclusion. The analysis also shows that the perceived ease of use does not necessarily lead to all users approbating it. Some people might not be interested in engaging with Fintech services due to factors like limited digital literacy, technological obstacles, and poor internet connectivity. Furthermore, government assistance had marginal impacts on the adoption of digital services, indicating that policies are not enough to induce adoption unless combined with better digital access and consumer confidence. Overall, the tremendous of Fintech to access to financial services and decrease reliance on traditional banking systems. The need for better digital infrastructure, better cyber security, better internet connectivity, and greater financial awareness, including in rural areas. This research aims to offer insights that can help policymakers, financial institutions, and Fintech providers to foster inclusive digital finance in Pakistan and other economies, by comparing the two groups of consumers, urban and rural.