A TAM-Based Model for Understanding Digital Payment Adoption: A Case Study in Tamil Nadu

Abstract

Background: The increasing financial service digitization has revamped transaction patterns in India, with digital payment platforms becoming hugely popular. Nevertheless, the behavioural factors that drive consumer’s acceptance of mobile payment applications are still intricate and multidimensional. Objectives: The aim of the present research is to examine the predominant determinants of user’s behavioural intentions and usage of digital payment apps in Tamil Nadu. It extends the Technology Acceptance Model (TAM) with additional dimensions of perceived trust, perceived risk, social norms, and facilitating conditions to achieve an in-depth understanding of digital payment behaviour. Methodology: A systematic questionnaire was administered to 670 respondents from diverse demographic profiles across Tamil Nadu in the course of a quantitative research approach. Structural Equation Modeling (SEM) was applied to confirm eleven hypotheses and explore relationships between various attributes that determine mobile payment acceptance. Key Findings: The results show that perceived ease of use significantly contributes to perceived usefulness and attitude, whereas perceived usefulness has a direct impact on user attitude.  Perceived trust, social norms, and supportive environments all positively affect behavioural intention, while perceived danger has a negative effect.  Compatibility exerts significant influence on perceived usefulness but not on attitude.  The entire model possesses strong explanatory power to predict digital payment adoption behaviour. Implications/Significance: The results have implications for fintech companies, banks, and governments interested in raising user involvement in digital payments.  Establishing trust, lowering perceived risk, and enhancing infrastructure and usability are key to driving digital financial inclusion.  Future research should examine how emerging technologies like AI and blockchain can enhance payment systems.