Advances in Social Science, Education and Humanities Research, volume 655

3rd Tarumanagara International Conference on the Applications of Social Sciences and Humanities (TICASH 2021)

The Influence of Mobile Money Adoption and Usage and

Digital Consumer Protection on Financial Inclusion in
Indonesia
Ste Sany1 Agus Zainul Arifin1 Halim Putera Siswanto1*
1
Faculty of Economics and Business, Universitas Tarumanagara, Jakarta, Indonesia
*
Corresponding author. Email: halims@fe.untar.ac.id

ABSTRACT
The purpose of this study was to verify the influence of Mobile Money Adoption and Usage (MMAU) and
Digital Consumer Protection (DCP) on Financial Inclusion (FI) among Financial Technology users in Indonesia
using the Diffusion of Innovation (DOI) theory and Restricted Access / Limited Control (RALC) theory. The
data used was primary data obtained through the distribution of Google Form. The number of samples that have
been obtained is 403 respondents. The results show that MMAU and DCP have positive and significant
influence on FI. The originality of this research is that this research is the first attempt in using fintech with the
Diffusion of Innovation (DOI) theory and Restricted Access / Limited Control (RALC) theory.

Keywords: Mobile Money Adoption and Usage, Financial Inclusion, Digital Consumer Protection, Financial
Technology

1. INTRODUCTION Kompas.com [4] mentioned that The President Joko

Widodo concerned on the index of financial inclusion in
Indonesia which is still low compared to many countries in
Along with the economic development in Indonesia,
ASEAN region, such as Singapura that has reached 98%,
financial inclusion becomes an important matter to be paid
Malaysia 85%, and Thailand 82%, hence it can be
attention to, especially regarding the financial technology in
concluded that financial inclusion in Indonesia remains
the use of electronic money that influences community
problematic due to having low index and unequal
welfare. Such activity of financial inclusion becomes one of
distribution.
the most important agenda in the world, especially in
Along with the development of information technology as
Indonesia. According to The Presidential Regulation [1],
well as the rapid level of internet penetration, several digital
The National Strategy of Financial Inclusion constitutes a
financial services exist that can ease the communities in
national strategy containing the ways to achieve the
conducting financial transactions, such as the Mobile
objective and target of financial inclusion, in which all
Money Adoption and Usage (MMAU), that can enhance
kinds of communities can easily access the financial
and encourage the financial inclusion in Indonesia.
services institutions based on the necessities to encourage
Meanwhile, the development of MMAU in the context of
economic growth and poverty reduction in order to envision
digital financial services in Indonesia causes some people
the welfare of Indonesians. Therefore, the development of
concern on the aspect of security and privacy of the users,
financial inclusion becomes an important national issue
because this matter is related to the risk of users’ personal
nowadays.
data leak, thus the Digital Consumer Protection (DCP) is
Based on World Bank in [2], financial inclusion is the
needed to enhance the consumers’ welfare [5].
access for every person or business to utilize the financial
This research used two kinds of basic theories, which are
products or services. According to [3], the result of national
the Restricted Access / Limited Control (RALC) theory and
survey on financial literacy and inclusion in 2019 shows the
the Diffusion of Innovation (DOI) theory. Basically, the
index of financial inclusion of 76.19%. Thus, it can be
RALC theory discusses about the urgency of an individual’s
concluded that most of Indonesians have been using and
privacy that has to be protected. This research investigated
knowing the kinds of financial products. Nevertheless, the
how the financial service providers can guarantee the
distribution of financial inclusion in Indonesia is not
security and privacy regarding the consumers’ personal data
balanced in each province, in which The Special Region of
in using the provided products or services. On other side,
Jakarta has the highest level of financial inclusion, which is
the DOI theory discusses about how a new technological
94.76% and the lowest is in West Papua Province, which is
innovation can spread into a social system, such as groups,
59.84%, thus the difference is 34.92%. An article on

Copyright © 2022 The Authors. Published by Atlantis Press SARL.

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 Advances in Social Science, Education and Humanities Research, volume 655

communities, and countries, with the speed depending on 2.4. Digital Consumer Protection
the existing channels. Therefore, this research used the
Mobile Money Adoption and Usage (MMAU) dan Digital
Based on [14], digital consumer protection is a kind of
Consumer Protection (DCP) as the independent variables.
consumer protection applied in digital financial services,
Based on the explanation above, this research intended to
which is very important to develop trust and confidence of
analyze the influence of MMAU and DCP on Financial
the users. Meanwhile, according to [15], digital consumer
Inclusion. Previous research conducted by [6] used the
protection ensures that consumers receive the correct
approach of RALC theory, and the novelty of this research
information, get fair treatment and not being cheated,
is the combination of Restricted Access / Limited Control
complain easily whenever there is a problem, and keep their
(RALC) Theory and Diffusion of Innovation (DOI) Theory,
personal information.
while the samples used were the Indonesians conducting
financial transactions by using electronic money in
Indonesia. 2.5. Financial Inclusion

According to [16], financial inclusion is the use of financial

products and services formally provided to the isolated
2. THEORETICAL REVIEW
community. [17] stated that financial inclusion is a kind of
financial service provided to community in order to use the
2.1. Diffusion of Innovation Theory financial services including overall savings, loans,
insurances, credits and etc.
This theory was introduced by [7] who defined diffusion as
an innovation process communicated through the channels 2.6. The Relationship between ‘Mobile Money
from time to time among the members of a social system. Adoption and Usage’ and ‘Financial
According to [8], Diffusion of Innovation is a theory about
how, why, and addition of meaningful ideas so that the Inclusion’
technology can spread into a social environment, such as
groups, communities, and countries. Based on [9], Based on the research conducted by [6], Mobile Money
innovation is an intended effort to bring changes or new Adoption and Usage (MMAU) has a positive and
methods to manage the working structure, process, or significant influence on Financial Inclusion (FI). The result
organizational procedure, as well as individual and group of this research shows that Financial Inclusion has four very
changes. important dimensions, which are access, quality, usage, and
welfare. Nevertheless, formal financial institutions, such as
banks do not operate in rural areas in which the community
2.2. Restricted Access / Limited Control members do not have bank account. Therefore, mobile
(RALC) Theory money adoption and usage can enhance the community’s
access to affordable financial services, such as savings,
[10] mentioned that restricted access is an individual or credits, and payments. Based on this phenomenon, the use
group who has privacy in the situation, if and if only in such of electronic money becomes more intensive which can
situation, the information related to the individual or group enhance the financial inclusion. Financial inclusion is
is protected from disorder, observation, and surveillance by meant to individuals and businesses that have the same
other parties. According to [11], privacy is one of the access to affordable financial products and services to fulfil
expressions of basic security values. The concept of privacy the necessities of communities.
control / limited access has advantages that the privacy H1: Mobile Money Adoption and Usage (MMAU) has a
policy can be managed well. In the era of computerization, positive and significant influence on Financial Inclusion
the information technology is developed rapidly and the (FI).
consequences are difficult to be predicted, because many
people can conduct more information search through the 2.7. The Relationship between ‘Digital
internet.
Consumer Protection’ and ‘Financial
Inclusion’
2.3. Mobile Money Adoption and Usage
The research conducted by [18] concluded that the
According to [12], mobile money adoption and usage is a protection to consumers regarding digital financial system
service of money remittance by using the is necessary to guarantee the safety and security of
telecommunication and information technology in order to consumers, in order to increase their confidence in
provide and expand the financial services, such as deposits, accessing the financial products or services. Thus,
withdrawals, transfers, and payments. Meanwhile, [13] consumer protection is ultimately important because it can
defined mobile money as the use of cellular gadgets to affect the consumers’ trust in accessing the products from
conduct the transactions, transfers, and payments. service providers.

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 Advances in Social Science, Education and Humanities Research, volume 655

H2: Digital Consumer Protection (DCP) has a positive and

significant influence on Financial Inclusion (FI).

Mobile Money
Adoption and
Usage
Financial
Inclusion

Digital
Consumer
Protection

Figure 1. Research Framework

3. RESEARCH METHODOLOGY technology, especially the users of electronic money. This

research used the non-probability sampling technique due
to the certain criteria applied to the respondents.
3.1. Research Subject and Object The questionnaire data was collected from 403 respondents,
and it was then analyzed using the Smart PLS 3.3.3 Program
The object of this research focusses on Mobile Money to run the tests of validity, reliability, t-statistics, and
Adoption and Usage (MMAU), Digital Consumer coefficient of determination. The Operationalization of
Protection (DCP), and Financial Inclusion (FI), while the variables in this research are as follows:
subject is the community members using financial

Table 1. Variable Operationalization

Variable Qty Source
Mobile Money Adoption and Usage 10 items [6]
Digital Consumer Protection 11 items [6]
Financial Inclusion 17 items [6]

3.2. Statistical-Test Results that measures the construct. The assessment result
regarding composite reliability is considered sufficient the
value is greater than 0.7. Meanwhile, by using the Cronbach
3.2.1. Validity Test Alpha, the assessment result is considered sufficient if the
value is greater than 0.6 [20]. The results of composite
According to [19], a variable is considered valid if the result reliability for each variable are: 1) Mobile Money Adoption
of Average Variance Extracted (AVE) is greater than 0.5 and Usage = 0.929; 2) Digital Consumer Protection = 0.955;
toward the target construct. Based on the result of PLS, the and 3) Financial Inclusion = 0.944. These results show that
AVE of each variable is: 1) Mobile Money Adoption and the variables of MMAU, DCP, and FI have met the criteria
Usage = 0.570; 2) Digital Consumer Protection = 0.606; and of reliability.
3) Financial Inclusion = 0.555. Based on the results, the
AVE of all variables (MMAU, DCP, and FI) are greater
than 0.5, thus those fulfil the criteria of validity. 3.2.3. Statistical t-Test
In this research, an independent variable has a significant
3.2.2. Reliability Test influence on the dependent variable if the t-statistics is
greater than 1.96 at 5% (or 0.05) significance level. The t-
The result of reliability test can be acquired by observing statistics of each variable can be seen in Table 2 as follow:
the value of composite reliability from an indicator block

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Table 2. The Results of t-Test

Original Sample (O) t-Statistics (|O/STDEV|) p-Values
MMAU ---> FI 0.528 10.769 0
DCP ---> FI 0.401 7.958 0

The result of the first hypothesis testing shows that there is 5. CONCLUSIONS
a significant influence of Mobile Money Adoption and
Usage (MMAU) on Financial Inclusion (FI) with the t- In this research, there is a positive and significant influence
statistics of 10.769 (> 1.96) and the p-value of 0 (< 0.05). of mobile money adoption and usage on financial inclusion
The value of original sample estimate is positive, which is among the financial technology users in Indonesia. This
0.528 showing that the relationship between MMAU and FI positive influence means that the more application of
is positive as well. This means that there is a positive electronic money, the faster delivery of information to
influence of Mobile Money Adoption and Usage toward people regarding financial inclusion will be. The high level
Financial Inclusion, thus the first hypothesis was accepted. of electronic money usage makes the information on
The result of the second hypothesis testing shows that there financial inclusion can be distributed faster, thus people can
is a significant influence of Digital Consumer Protection utilize the financial inclusion to manage their own financial
(DCP) on Financial Inclusion (FI) with the t-statistics of matters.
7.958 (> 1.96) and the p-value of 0 (< 0.05). The value of This research also shows that digital consumer protection a
original sample estimate is positive, which is 0.401 showing positive and significant influence on financial inclusion
that the relationship between DCP and FI is positive as well. among the financial technology users in Indonesia. This
This means that there is a positive influence of Digital positive influence means that by providing the right
Consumer Protection toward Financial Inclusion, thus the information, safety feeling, and trust to consumers, then the
second hypothesis was accepted. financial product and/or services can be distributed to
people faster. Hence, people can utilize the financial
3.2.4. Coefficient-of-Determination Test inclusion to manage their financial matters.

The Coefficient of Determination (CD) is based on the

value of R-Square. In this research, the value of R-Square 6. LIMITATIONS AND SUGGESTIONS
is 0.693. This result shows that the variation in the variable
of Financial Inclusion can be explained by the variation in This research has some limitations, which are: 1) This
the variables of Mobile Money Adoption and Usage research only used 403 respondents of financial technology
(MMAU) and Digital Consumer Protection (DCP) as much users in Indonesia, thus this number of respondents is
as 69.3%, while the remaining 30.7% can be explained by considered less able to represent the Indonesian population
other variables not included in this research. as a whole; 2) The independent variable in this research is
limited only to Mobile Money Adoption and Usage and
Digital Consumer Protection, while there are still many
4. DISCUSSIONS factors influencing the financial inclusion such as financial
knowledge, financial attitude, financial intermediation, and
The result of this research is in line with the research etc.; 3) There is a possibility that the respondents did not
conducted by [6] concluding that mobile money adoption fulfil the questionnaire correctly based on the reality they
and usage has a positive and significant influence on experienced.
financial inclusion. Therefore, in order to enhance the Based on such limitations, the next research can increase
financial inclusion, the financial service providers have to the number of samples in order to acquire the stronger
utilize the use of electronic money massively, so that people predictive-power, as well as the more accurate and
can easily access their various services. representative results.
This research has the same result as the previous research
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