Why do rural and urban users adopt phygital payments differently? A UTAUT3-based comparative study of mobile wallets and plastic money

Abstract

Purpose

This paper aims to identify the factors affecting the adoption of plastic money and mobile wallets by comparing rural and urban perspectives. For this, the study uses a unified theory of acceptance and use of technology (UTAUT3) model with additional variables, perceived value and perceived risk, to predict use behavior.

Design/methodology/approach

This research incorporates two cross-sectional surveys, Study R, which includes 417 rural respondents and Study U, which includes 431 urban respondents, regarding plastic money and mobile wallet adoption. This paper used the Statistical Package for Social Science and partial least squares-structural equation modeling for data analysis.

Findings

Both studies showed that performance expectancy, social influence and hedonic motivation substantially influence behavioral intention and use behavior. In contrast, effort expectancy has an insignificant influence in rural (Study R) and urban (Study U). In addition, personal innovativeness and perceived value positively influence, whereas perceived risk negatively influences behavioral intention and use behavior in both studies. However, facilitating conditions had a positive effect in Study U, but it had a negative effect on behavioral intention and use behavior in Study R.

Practical implications

This research lays a practical foundation for governments, policymakers and marketers to encourage a phygital payment service that explicitly addresses the rural and urban context. In addition, the findings of this paper also help regulatory authorities develop effective strategies and campaigns to encourage the sustainable development of countries.

Originality/value

This paper attempts to address the gap in the prevailing literature by investigating the role of geographical differences in the technology adoption system, especially in emerging nations like India, where these studies are missing. The adoption differences between rural and urban areas, along with the insightful findings by the authors, help to highlight the unique aspects of the context. As one of the pioneering studies, this research tests the UTAUT3 model, incorporating two additional constructs, to provide a comprehensive framework for using plastic money and mobile wallets – valuable for both researchers and practitioners.

Citation

Pal, A., Rani, P., Singh, U.P., Rani, R. and Kumar, A. (2025), "Why do rural and urban users adopt phygital payments differently? A UTAUT3-based comparative study of mobile wallets and plastic money", Digital Policy, Regulation and Governance, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/DPRG-10-2024-0268