Assessing the digital payment adoption in rural India through the lens of sustainable development goals

The Government of India’s initiative to promote a cashless economy is approaching a transformative stage, with the mission to enhance the digital payment ecosystem. The introduction of the Unified Payment System played a pivotal role in the growth of the online payment landscape. However, despite the initiatives, the challenges persist with the marginalized section where cash transfers are considered reliable. The reasons behind reliance on cash is due to low financial literacy and at times lack of access to technology and infrastructure. The current study aims to understand the adoption rate of digital payments among the rural Indians. A cross-sectional survey was conducted among respondents from Talasari taluka in the Palghar district of Maharashtra, India, predominantly representing scheduled caste rural households. Data were collected using a structured interview schedule based on validated scales. Structural Equation Modelling (SEM) via SmartPLS 4 was employed to test the hypothesized relationships among the constructs of Diffusion of Innovation Theory and to evaluate the indirect mediating effects of Ubiquity and Barriers to Adoption. The results determine that Relative Advantage, Compatibility and Trialability have a significant positive impact on the rate of adoption; while Complexity negatively impacts the adoption mechanism. Also, Ubiquity and Barriers acted as an indirect variable between Compatibility and Adoption. The findings underline the need to address the challenges of distributing the benefits of the payment through all sections of society. With the plan of implementing the Central Bank Digital Currency, the targeted strategy and policies will not only enhance financial literacy but also promote the future of digital currency in India.