Digital Payment Adoption and Financial Vulnerability: Global Evidence From Multilevel Models

Abstract

ABSTRACT Although digital financial services are emerging, whether adopting digital payment influences consumer vulnerability remains understudied and debated. This study aims to examine mechanisms linking digital payment adoption, financial fragility, financial worry, and national socioeconomic development. Guided by information and communication technology for development (ICT4D), financial capability, and consumer vulnerability theories, we utilized multilevel modeling on a unique multisource dataset including 122,717 adults across 139 economies. Digital payment adoption was negatively associated with financial fragility across levels, while its associations with financial worry were positive at the individual level and negative at the country level on average. Such associations were manifested through suppressive partial mediation pathways and exhibited heterogeneous strengths across regions worldwide. The analysis revealed double‐edged effects of consumer digital payment adoption and uncovered cross‐level development paradoxes in digital financial vulnerability. Specifically, although digital adoption reflects human adaptation to crisis‐driven transformation, it simultaneously exacerbates specific dimensions of consumer fragility. The “macro–micro mismatch” identified a paradox capturing structural forces in shaping consumer welfare. The cross‐level interactions identified another “enabling–amplifying context” functioning as diverse roles of socioeconomic development environments. This study contributes a comprehensive and comparative framework to the multidisciplinary research on digital finance and well‐being. It also informs policymakers about co‐creating inclusive financial ecosystems to address consumer vulnerability alongside the macro‐level development of digitalization, financialization, and globalization.