HOW DOES THE RISE OF DIGITAL PAYMENTS INFLUENCE OVERCONSUMPTION BEHAVIOR AMONG THE GEN-Z AND MILLENNIAL SOCIETY IN INDONESIA?

• Main Author: Lee Dharmawan, Clara
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/77302
• Institution: Institut Teknologi Bandung

In the past decade, consumers in Indonesia have shifted their payment measures from traditional paper cash and plastic cards to contactless digital payment systems caused by a rapid adoption of smartphones into peoples’ lifestyles all over the world, the Covid-19 pandemic, and the proliferation of various types of digital transaction services such as fintechs (Financial Technology) and e-commerces among the people of big cities in Indonesia (Nugroho, 2019; Deloitte Indonesia, 2020). The use of digital wallets (e-wallet) has so far been dominated by millennials (born in 1980-1996) and Gen-Z (born in 1997-2002) (Ipsos Indonesia, 2020). They are tempted by various promotional offers and other marketing techniques that could lead the younger consumers to have difficulty managing expenses or even severe overconsumption in the future. The purpose of this study is to understand how digital/electronic payments influence consumption changes in the gen-Z and millennial society in Indonesia and to understand if the use of digital and cashless payments influences the younger generation’s willingness to spend and overconsumption behaviors. The research was based on the literature review of past articles and researches, along with data provided by research institutions. Moreover, we gathered primary data through a survey to discover consumers’ perception toward digital payments and their tendency to have overconsumption behaviors. The survey was conducted on a sample of 97 gen-Z and millennials in Indonesia aged 16-42. After a statistical analysis was conducted, it was found that most of the younger generation actively uses digital payments, and that the use of digital payments has a linear effect of 6.9% on overconsumption behavior. However, despite how it influences consumer spending patterns such as impulsive behavior and willingness to pay, there is found to be no significant relationship between the use of digital payments and overconsumption behaviors.