Assessing incentives to increase digital payment acceptance and usage: A machine learning approach.

An important step to achieve greater financial inclusion is to increase the acceptance and usage of digital payments. Although consumer adoption of digital payments has improved dramatically globally, the acceptance and usage of digital payments for micro, small, and medium-sized retailers (MSMRs) remain challenging. Using random forest estimation, we identify 14 key predictors out of 190 variables with the largest predictive power for MSMR adoption and usage of digital payments. Using conditional inference trees, we study the importance of sequencing and interactions of various factors such as public policy initiatives, technological advancements, and private sector incentives. We find tha…