Financial Literacy and Digital Inclusion: A Study of Payment Bank Customers

Abstract

This study\'s main goal is to look at the connection between digital inclusion and financial literacy among payment bank clients. Its goal is to comprehend the ways in which financial literacy and expertise impact the uptake and efficient application of digital financial services, especially those provided by payment banks. The study looks at the elements that help or impede digital inclusion and investigates the possible effects of financial literacy on payment bank clients\' financial security. A sample size of 200 customers were selected through simple random sampling method from the geographical location of urban Bangalore. SPSS V.23 was used to analyse and validate the hypothesis through Pearson’s correlation analysis and regression analysis. The findings of this study on financial literacy and digital inclusion among payment bank customers in Bangalore provide valuable insights into the factors that influence the adoption and effective use of these services. The study found that there is statistically significant relationship between digital literacy and financial literacy. There is higher impact of financial literacy on digital literacy by 31% in predicting contributed by financial knowledge. These findings highlight the importance of both financial literacy and digital literacy in promoting the effective use of payment bank services.

Introduction

The text examines the relationship between financial literacy and digital inclusion among customers of payment banks in India, with a focus on Bangalore. Payment banks play a key role in promoting financial inclusion by offering accessible and low-cost digital banking services, especially to underserved populations. However, effective use of these services depends heavily on users’ financial literacy and digital skills.

Financial literacy includes the ability to understand and manage financial concepts such as budgeting, saving, investing, and borrowing, while digital inclusion refers to access to and use of digital financial technologies. The study highlights that although digital financial services (DFS) are expanding, many users still face challenges due to low financial and digital literacy, lack of trust, and limited awareness.

The research investigates:

• The relationship between financial literacy and use of digital financial services
• Factors affecting effective use of payment bank services
• Barriers to financial inclusion

The study was conducted in Bangalore with 200 payment bank customers, using surveys and interviews. Data was analyzed using Pearson correlation and multiple regression analysis.

Key findings:

• There is a strong positive relationship between financial literacy and digital literacy.
• Financial literacy components (financial knowledge, attitude, family influence, and peer influence) significantly affect digital literacy.
• The regression model shows that these factors explain about 36.2% of the variation in digital literacy, with financial knowledge having the strongest impact.
• All relationships are statistically significant at the 1% level.

Conclusion

The study\'s data are compiled to provide conclusions regarding the connection between digital inclusion and financial literacy among Bangalore\'s payment bank clients. In the context of bank service payments, the research will offer suggestions for enhancing digital inclusion and financial literacy. It sheds important light on the connection between digital inclusion and financial literacy among Bangalore\'s payment bank clients. According to the findings, using these services effectively requires both digital and financial literacy, which can have a big impact on people\'s financial well-being. Subsequent investigations are required to examine the consequences of these discoveries and devise tactics for advancing digital inclusion and financial literacy in marginalized communities.

References

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Copyright

Copyright © 2026 Sowmya S, Dr. M. Ganesh Babu. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.