Exploring the Paradigm of Fintech Adoption Among Gen Z in Pakistan: An Empirical Examination

Abstract

This study seeks to identify the drivers behind Generation Z's use and adoption of financial technology (Fintech) in Pakistan, understanding that this is critical to bridging the gap of financial illiteracy and promoting financial inclusion. Specifically, it examines the role of digital financial literacy, attitude, perceived usefulness, social influence, perceived ease of use, and status quo value in driving Fintech adoption by Gen Z, and explores whether there is any variation in these determinants and consumer actions between students with urban or rural origins. Data were collected from over 300 Generation Z university students and analyzed with Partial Least Squares Structural Equation Modeling (PLS-SEM), focusing on examining both the measurement model in terms of reliability and validity and structural model in terms of hypothesized relationships. Findings show that digital financial literacy, perceived value, and status quo value are the strongest determinants of Fintech adoption, while attitude shows no significant impact. Interestingly, adoption among urban respondents is much higher compared to rural respondents, in evidence of context of place playing a role. These findings suggest that stakeholders like policymakers, educators, and Fintech developers can encourage more inclusive and effective strategies by improving digital financial literacy and bearing sociocultural and contextual ones in mind, particularly the urban-rural dimension. Being one of the few studies purely on Generation Z in Pakistan and one of the first to compare urban and rural Fintech adoption differences, this study provides fresh and useful contributions to the literature on technology adoption within emerging economies and assists in contributing towards broader initiatives on financial inclusion. The study thus identifies the need for tailored Fintech initiatives that suit the individual preferences, challenges, and environments of young consumers to maximize gains from adoption and impact.