The Role of Trust in Mediating the Effect of Mobile Money Usage towards Financial Inclusion: Evidence from Gunungkidul, Indonesia

Abstract

The increasing number of internet users in Indonesia has an impact on the increasing usage of mobile money as one of digital financial services. The use of mobile money can increase financial inclusion in society. Financial inclusion is proven to decrease poverty if it is carried out optimally. However, mobile money services lead to cost and benefit for people. Thus, trust to use this innovation becomes an important thing. This research aims to assess the role of trust as the mediator between mobile money usage and financial inclusion in productive age communities in Gunungkidul Regency, Yogyakarta, Indonesia. Gunungkidul Regency is one of regencies with the poorest population in the special region of Yogyakarta, Indonesia. It is expected that the increasing of mobile money usage and financial inclusion will reduce the poverty in Gunungkidul Regency, Indonesia. There are 486.509 population of productive age in this research and 400 of total sample which were taken with a non-probability sampling technique. This study applies the Sobel test by Kenny and Baron’s mediation analysis and the PROCESS method by Hayes. The results of this study show that the trust partially mediates the effect of mobile money usage towards financial inclusion in productivity age communities in Gunungkidul Regency, Indonesia. In order to build trust, the regulator in Indonesia should pay attention to the detail on data privacy and the effectiveness of mobile money usage. It is an effort to encourage people to use mobile money continuously and to attract more new users. The users are also encouraged to manage the use of mobile money properly as an effort to increase financial inclusion towards poverty alleviation.