Trust as a mediator between perceived usefulness and customer satisfaction in digital payment services: Empirical evidence from Nepal

The rapid growth of digital payment services has transformed the banking sector by providing customers with greater convenience, efficiency, and accessibility. However, limited attention has been given to the psychological mechanism through which Perceived Usefulness influences Customer Satisfaction, particularly the mediating role of Trust in the Nepalese context. This study examines the mediating role of Trust in the relationship between Perceived Usefulness and Customer Satisfaction in digital payment services. A total of 480 questionnaires were distributed to users of digital payment services across 20 commercial banks within the Kathmandu Valley, yielding 400 valid responses that were included in the analysis. The study utilized a quantitative cross-sectional research design to examine the relationships between Perceived Usefulness, Trust, and Customer Satisfaction through Partial Least Squares Structural Equation Modeling (PLS-SEM). The results reveal that Perceived Usefulness has a positive effect on both Trust and Customer Satisfaction, while Trust also positively influences Customer Satisfaction. Furthermore, Trust significantly mediates the relationship between Perceived Usefulness and Customer Satisfaction, indicating that Perceived Usefulness enhances Customer Satisfaction both directly and indirectly through Trust. The study emphasizes the importance of reliable and trustworthy digital payment services, providing practical insights for enhancing customer satisfaction in Nepal’s banking sector.