ONLINE PAYMENT, INDIVIDUAL CHARACTERISTICS, AND DIGITAL FINANCIAL INCLUSION IN OIC COUNTRIES

Abstract

Digital financial inclusion (DFI) is a prominent issue in the digital era, since it focuseson the use of technology to serve unbanked people at low cost. The adoption ofmobile money platforms that allow users to make efficient peer-to-peer and real-timetransactions is one aspect of the DFI agenda. This study aims to investigate thedeterminants of mobile money usage using data derived from the 2017 GlobalFinancial Inclusion survey conducted by the World Bank and Gallup and applyingprobit regression and the Heckman selection model to check robustness. Eventhough access to a financial institution is relatively low, the percentage of mobilemoney usage in Organisation of Islamic Cooperation (OIC) countries is slightly higherthan in non-OIC countries and worldwide. The rate of adoption of mobile money ishigher for individuals making online transactions, with more educated and moreprosperous males tending to be more included in the use of digital financial services.The U-shape hypothesis for the relationship between age and the use of mobilemoney is not supported. Our research contributes to the theoretical development ofthe Unified Theory of Acceptance and Use of Technology 2 in illustrating the use ofmobile technology. The empirical results are recommended for use by practitioners,regulators and policymakers in creating and fostering a sound ecosystem for digitalfinance development.