The Effect of Financial Literacy and Risk Perception on the Decision to Use PayLater Among Millennials in Cirebon City

Abstract

The development of digital technology has encouraged the increased use of financial technology services, one of which is buy now pay later (BNPL) such as Shopee PayLater, which is widely used by millennials. Although it offers ease of transaction, the use of PayLater has the potential to cause financial risks if it is not supported by adequate financial literacy and risk awareness. This study aims to analyze the influence of financial literacy and risk perception on the decision to use Shopee PayLater among millennials in Cirebon City. The study uses a quantitative approach with an associative design involving 96 respondents selected through purposive sampling. Data were collected through a Likert scale questionnaire and analyzed using the PLS-SEM method with the help of SmartPLS 4.0. The results show that financial literacy and risk perception significantly influence the decision to use Shopee PayLater. These findings emphasize the importance of improving financial literacy so that PayLater services are used wisely and responsibly.