Digital Payment Adoption in India: A UTAUT2-Based Analysis of Facilitators and Inhibitors

Isha  Gupta

Abstract

The rapid expansion of digital payment systems in India has created a paradox characterized by extensive technological availability alongside uneven user adoption. Although digital payments offer significant advantages, such as convenience, speed, transparency, and enhanced financial inclusion, behavioral resistance continues to limit their widespread acceptance. Concerns related to usability, trust, and perceived value often influence individuals’ decisions to adopt such technologies. In thiscontext, the present study extends the Unified Theory of Acceptance and Use of Technology 2 (UTAUT2) framework by incorporating both facilitating and inhibiting factors that shape behavioral intention to adopt digital payments in the National Capital Region (NCR), India. A cross-sectional research design was employed, and primary data were collected from 278 valid respondents. The proposed research model was analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) to examine the hypothesized relationships among constructs. The empirical findings reveal that performance expectancy (β = 0.455, p < 0.01), effort expectancy (β = 0.161, p < 0.05), and hedonic motivation (β =0.245, p < 0.001) significantly and positively influence behavioral intention, collectively explaining 31.5% of the variance. Conversely, habit and perceived risk were found to have no statistically significant impact in this context. The study offers valuable theoretical enrichment of UTAUT2 and provides practical insights for policymakers, financial institutions, and fintech service providers aiming to strengthen digital payment adoption strategies in emerging economies.

Abstract

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