The Influence of Financial Literacy on Consumer Behavior Supported by The Paylater Feature

With the increased digitization of the financial sector and the emergence of Buy Now Pay Later (BNPL) or PayLater service in today’s digital era, there has been a huge impact on the decision-making and spending trends of young people. With such ease in financial transactions, there is often difficulty in managing finances rationally and leading to a high degree of consumerism. The research intends to examine the role of financial literacy on consumptive behavior by evaluating the effects of PayLater, self-control, preference for artificial intelligence (AI), online shopping environment and lifestyle orientation on such phenomena. The methodology adopted for the research includes a quantitative analysis using Partial Least Squares Structural Equation Modeling (PLS-SEM). Data was gathered using an online questionnaire survey from 545 sample of university students and workers located in Jabodetabek, Indonesia, using purposive sampling technique. The conceptual model consists of seven variables forming seven hypotheses. It has been found that out of seven hypotheses, only five are statistically significant. Financial literacy has a direct and significant effect on consumptive behavior. Finances literate people can use PayLater service to manage their cash flow. Lastly, lifestyle orientation and online shopping environment become the major factors contributing to excess spending. Self-control and AI preference were not found to be statistically significant, suggesting their influence may be contingent on contextual factors within a highly stimulating digital commerce environment.