The squeezed middle in digital financial services: Ireland's warning for European consumer protection policy

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dc.contributor.authorRyan, Marieen
dc.contributor.authorXiong, Huanhuanen
dc.contributor.authorCarton, Fergalen
dc.contributor.authorMcCarthy, J. B.en
dc.date.accessioned2025-09-05T10:52:13Z
dc.date.available2025-09-05T10:52:13Z
dc.date.issued2025-09-01en
dc.description.abstractThis paper examines how digital financial services affect consumer welfare across income distributions using Ireland as a critical case study for European consumer protection policy. Our analysis of 11,128 Irish households from the 2020 EU Survey on Income and Living Conditions reveals that technology shows no direct association with consumer welfare (β=0.0022, p=0.969). Instead, it operates only through mediating channels that frequently fail for middle-income consumers. We identify a "squeezed middle" phenomenon where households between the 20th and 70th income percentiles experience persistent financial strain despite technology access. Young adults remain in negative financial well-being through the 70th income percentile despite 96.2 per cent technology access, suggesting structural barriers that technology cannot address. Immigration status creates the largest technology gap at 40.7 per cent, yet technology fails to explain welfare disparities between immigrants and natives. These findings from Ireland, where fintech adoption rates reach 71 per cent compared to the European average of 64 per cent, challenge the European Union's €150 billion digital infrastructure investment introduced on automatic consumer benefits. We identify three mechanisms explaining this failure: capability mismatch where technological resources exceed user capabilities, economic constraints override where fundamental economic barriers overwhelm technology benefits, and satisfaction illusion where technology increases perceived control without improving objective outcomes. As Europe's most digitalised economy, Ireland provides an early warning for other member states pursuing similar strategies.en
dc.description.statusNot peer revieweden
dc.description.versionSubmitted Versionen
dc.format.mimetypeapplication/pdfen
dc.identifier.citationRyan, M., Xiong, H., Carton, F. and Carthy, J.M. (2025) 'The squeezed middle in digital financial services: Ireland's warning for European consumer protection policy', 49(4) (28pp). Journal of Consumer Policy, https://doi.org/10.1007/s10603-025-09605-1 en
dc.identifier.doihttps://doi.org/10.1007/s10603-025-09605-1en
dc.identifier.urihttps://hdl.handle.net/10468/17825
dc.language.isoenen
dc.rights© 2025, the Authors. https://creativecommons.org/licenses/by/4.0/en
dc.rights.urihttps://creativecommons.org/licenses/by/4.0/en
dc.subjectSqueezed middleen
dc.subjectDigital financial servicesen
dc.subjectConsumer vulnerabilityen
dc.subjectFinancial well-beingen
dc.subjectConsumer protectionen
dc.subjectIrelanden
dc.subject~Cork University Business School - Journal Articles~en
dc.subject~Business Information Systems - Journal Articles~en
dc.subject~Centre for Policy Studies - Journal Articles~en
dc.titleThe squeezed middle in digital financial services: Ireland's warning for European consumer protection policyen
dc.typePre-printen
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