The role of financial inclusion, financial literacy and digital payment adoption in Indonesian millennials’ financial well-being

Purpose This study examines the mediating effect of digital payment adoption (DPA) on the relationship between financial inclusion dimensions (access, usage and quality) and financial literacy dimensions (financial knowledge, behavior and attitude) on Indonesian millennials' financial well-being (FWB). Design/methodology/approach This study employs a quantitative approach using Indonesian millennials as the study sample. Self-administered questionnaires were distributed using a purposive sampling technique, yielding 1,026 valid responses. Data were analyzed using partial least squares–structural equation modeling. Findings The findings indicate that the relationship between financial inclusion dimensions (ACCESS, USAGE and QUALITY) and FWB are positively mediated by DPA. The relationship between the dimensions of financial literacy (specifically, financial knowledge) and FWB is positively mediated by DPA, whereas the relationship between the dimensions of financial literacy (specifically, financial behavior) and FWB is negatively mediated by DPA. Practical implications To promote inclusive finance, especially among millennials, the Indonesian government must pay greater attention to promoting not only financial access but also digital engagement. Policies aimed at expanding financial infrastructure should be accompanied by initiatives that foster digital literacy, simplify user experience and build trust in digital financial ecosystems. As digital financial service providers, financial institutions must offer suitable products and services that suit millennials’ needs to capture and retain them as customers. Additionally, educators or policymakers should integrate digital finance education into formal curricula and community programs to enhance millennials' financial engagement. Originality/value The findings of this study add to the body of knowledge deliberating on the relationship between financial inclusion (ACCESS, USAGE and QUALITY) and financial literacy dimensions (financial knowledge, attitude and behavior) and FWB, as well as the mediating effect of DPA. This study contributes to the literature by unraveling the factors influencing FWB among Indonesian millennials and how they interact in the context of a demographic dividend country like Indonesia, where millennials are the majority in the demographic structure.