Do Digital Payments Really Promote Financial Inclusion? What the Evidence Shows

Digital payment technologies are often presented as a clear answer to financial exclusion. From mobile wallets to online payment platforms, fintech solutions promise lower costs, faster transactions, and broader access to financial services. For many firms and regulators, the assumption is straightforward: if payments become digital, inclusion will naturally follow, In an article for The Fintecch Times Mesbah Fathy Sharaf and Abdelhalem Shahen explore the offerings to the unbkanked and thier succes to promote inclusion. Mesbah Fathy Sharaf However, the academic evidence points to a more complex picture. Research examining the real-world use of digital payment technologies shows that they can support financial inclusion, particularly in settings where traditional banking services are limited. From reviewing the empirical literature, we find that digital platforms help reduce barriers related to distance, time, and transaction costs, but only under certain conditions. By allowing users to store, send, and receive money without relying on physical bank branches, digital payment systems have expanded access to basic financial services for many households and small businesses, especially in developing and emerging economies. Technology alone is not enough Abdelhalem shahen At the same time, the evidence is clear that technology alone does not guarantee inclusion. Digital payment systems tend to perform best where certain enabling conditions already exist. Reliable mobile connectivity, affordable devices, and basic digital skills all matter. Where these conditions are weak or uneven, adoption remains limited, regardless of how innovative the technology may be. This has important implications for fintech firms targeting underserved markets. Making a…

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