Drivers of digital payment adoption in Tanzania: What do consumers say?

Abstract

It is evident that digital payments play a significant role in advancing economic growth. Key digital payment stakeholders, such as customers, are important actors in shaping the digital payment ecosystem, particularly when their perceptions of the drivers of digital payments are considered in the development of appropriate adoption approaches. However, little is known about consumer perceptions of the drivers of digital payment adoption in Tanzania. This awareness would enable the government to design and implement workable mechanisms that would improve the drivers of digital payment adoption, reflecting the needs, preferences, and interests of consumers. This study analyzes consumer perceptions of the drivers of digital payment adoption in Tanzania. Using a questionnaire, responses from 261 members of the consumer consultative councils were collected and analyzed using hierarchical multiple regression. The study reveals that perceived drivers of digital payment adoption in Tanzania include enhanced policy development initiatives, operational capabilities of digital payment systems, improved system and positive customer experience, enhanced security and privacy, collaboration and fair treatment among stakeholders, and government support and regulatory frameworks. Moreover, it is found that the addition of enhanced policies, increased collaboration, and improved regulatory frameworks improves the prediction of an enhanced digital payment ecosystem in Tanzania beyond the identified drivers. This study enables policymakers, practitioners, and other players in the financial sector to develop and implement techniques that promote the digital payment environment and ultimately foster the development of inclusive finance and economic growth.