The Role of Financial Literacy in the Paradox of Financial Inclusion in the Era of Digital Wallets and PayLater Services

Dinda Azzuhruf; Edi Cahyono

doi:10.70062/incoils.v5i1.437

Authors

Dinda Azzuhruf Universitas Islam Negri Salatiga
Edi Cahyono UIN Sayyid Ali Rahmatullah Tulungagung

DOI:

https://doi.org/10.70062/incoils.v5i1.437

Keywords:

digital financial inclusion, financial literacy, FOMO, e wallets, impulsive behavior

Abstract

Digital financial inclusion in Indonesia has grown rapidly with the emergence of various financial innovations such as e-wallets and buy now, pay later (BNPL) services. However, this development presents a paradox: greater financial inclusion does not necessarily correspond to higher levels of financial literacy. In fact, society particularly Generation Z has shown increasingly consumptive and impulsive financial behavior. This study is a conceptual review that aims to analyze the role of financial literacy in moderating the influence of perceived ease of use of e-wallets and the fear of missing out (FOMO) on impulsive behavior. The method employed is a systematic conceptual review, analyzing recent literature (2020–2025) from academic journals and official reports published by institutions such as the Financial Services Authority (OJK) and Bank Indonesia. The findings indicate that both the ease of digital transactions and psychological factors like FOMO contribute substantially to impulsive financial behavior among Generation Z. However, financial literacy serves as a crucial cognitive buffer that mitigates the negative impacts of digital financial inclusion. Therefore, strengthening digital financial literacy is essential to ensure that financial inclusion initiatives are not only accessible but also sustainable, empowering young generations to achieve greater financial well-being rather than vulnerability.

Author Biography

Edi Cahyono, UIN Sayyid Ali Rahmatullah Tulungagung

Digital financial inclusion in Indonesia has grown rapidly with the emergence of various financial innovations such as e-wallets and buy now, pay later (BNPL) services. However, this development presents a paradox: greater financial inclusion does not necessarily correspond to higher levels of financial literacy. In fact, society particularly Generation Z has shown increasingly consumptive and impulsive financial behavior. This study is a conceptual review that aims to analyze the role of financial literacy in moderating the influence of perceived ease of use of e-wallets and the fear of missing out (FOMO) on impulsive behavior. The method employed is a systematic conceptual review, analyzing recent literature (2020–2025) from academic journals and official reports published by institutions such as the Financial Services Authority (OJK) and Bank Indonesia. The findings indicate that both the ease of digital transactions and psychological factors like FOMO contribute substantially to impulsive financial behavior among Generation Z. However, financial literacy serves as a crucial cognitive buffer that mitigates the negative impacts of digital financial inclusion. Therefore, strengthening digital financial literacy is essential to ensure that financial inclusion initiatives are not only accessible but also sustainable, empowering young generations to achieve greater financial well-being rather than vulnerability.

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