FinTech Adoption under Perceived Risk: The Mediating and Moderating Role of Trust, Usefulness, and Digital Literacy

Abstract

The rapid expansion of financial technologies (FinTech) has transformed financial service delivery; however, user adoption remains uneven in emerging economies where concerns related to security, trust, and digital capability persist. Addressing this gap, this study investigates how risk perception influences behavioral intention to adopt FinTech services by integrating the Technology Acceptance Model (TAM) and Protection Motivation Theory (PMT). Specifically, the study examines the mediating roles of trust and perceived usefulness, alongside the moderating role of digital literacy, to explain users’ adoption intentions under conditions of perceived risk. The proposed model is tested using survey data collected from 410 banking customers in Pakistan through structural equation modeling (PLS-SEM). The findings reveal that risk perception exerts a significant negative effect on behavioral intention. However, this relationship is partially mediated by trust and perceived usefulness, indicating that users cognitively and relationally process perceived risk before forming adoption intentions. Furthermore, digital literacy significantly moderates the risk intention relationship, weakening the deterrent effect of perceived risk among more digitally competent users. This study advances FinTech adoption by integrating threat appraisal and benefit evaluation mechanisms into a unified framework, extending both TAM and PMT. The findings offer actionable insights for policymakers and FinTech providers seeking to enhance trust, promote digital capability, and foster inclusive digital financial adoption in emerging economies.

FinTech adoption, Risk perception, Behavioral intention, Trust, usefulness, Digital literacy.