BEYOND ACCESS: DIGITAL PAYMENTS AND FINANCIAL INCLUSION ACROSS ASIA

Abstract

This study examines the relationship between digital payment adoption and financial inclusion across 23 Asian countries using cross-sectional data. Financial inclusion is measured by account ownership, while digital payment usage is the main explanatory variable, alongside GDP per capita, internet usage, an interaction term between digital payment and internet usage, and regional dummy variables. The models are estimated using Ordinary Least Squares (OLS) with Huber-White robust standard errors to address potential heteroskedasticity. The results show that digital payment adoption is positively and significantly associated with financial inclusion, indicating that countries with higher digital payment usage tend to have higher levels of account ownership. In contrast, GDP per capita and internet usage do not show robust significant associations with financial inclusion. The interaction between digital payment and internet usage is also not statistically significant, suggesting that internet usage does not significantly moderate the relationship between digital payment adoption and financial inclusion. The findings further reveal the importance of regional heterogeneity, indicating that structural differences across Asian regions contribute to variations in financial inclusion.