The role of internet banking and digital payment on financial inclusion: socioeconomic status as a moderator

Financial inclusion (FI) is an important tool in creating economic growth and reducing poverty for social equity regardless of country’s development. This study examines the effects of Mobile and Internet Banking (MIB) and Digital Payment Systems (DPS) on financial inclusion in diverse economic environments. Additionally, it examines whether the SES plays any roles as a moderator on the relationships between digital financial services and financial inclusion. Using a panel of 63 countries in a cross-sectional database which is divided according to overall country grouping, state of development, income level and Human Development Index (HDI), four separate samples are analysed utilizing multiple regression and Feasible Generalized Least Squares (FGLS) technique. The findings of research are all consistently profound and positive in the impact of DPS on FI irrespective of country category or model, reemphasizing its wide applicability to financial inclusion. On the other hand, the impact of MIB is less effective or even counterproductive, particularly in countries with high income and HDI countries where there is a small share of conventional banking services exist. In certain models, SES has a moderating effect indicating a context sensitive relationship from SES to the role of digital tools on financial access.