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.
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
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 platform available does not automatically translate into meaningful use. Adoption depends on trust, usability, and whether users see clear advantages over cash-based alternatives. Without these factors, digital payment tools may remain underused or concentrated among higher-income or more educated users.
The persistence of gender and income gaps
Gender differences are a recurring theme in the evidence. Across many contexts, women are less likely than men to adopt digital financial services or to use them regularly. These gaps are not driven by technology alone. They reflect broader social and economic constraints, including unequal access to mobile phones, lower digital literacy, and limited control over financial resources. Digital payment platforms do not automatically overcome these barriers and may, in some cases, reflect existing patterns of exclusion.
Income and education also shape outcomes. Users with higher income levels or more education are generally better positioned to adopt digital payments and benefit from them. For lower-income users, concerns about cost, security, and reliability can discourage sustained use. This highlights a key lesson for the fintech industry: inclusion is not just about onboarding users, but about designing systems that are affordable, understandable, and trustworthy for first-time and low-income users.
The role of regulation and trust
Regulatory and institutional environments play a central role as well. The evidence suggests that digital payment systems are more effective when supported by clear rules and consumer protection measures. Trust in digital platforms is closely linked to trust in the broader financial system. Where regulation is weak or fragmented, users may be reluctant to rely on digital payments for everyday transactions, even when the technology itself functions well.
Newer payment technologies, including blockchain-based systems, have also attracted attention for their potential to improve transparency and facilitate cross-border transactions. However, the academic evidence remains cautious. While such technologies may offer advantages in certain contexts, their effectiveness depends heavily on regulatory clarity, institutional capacity, and user confidence.
For fintech firms and policymakers, the central takeaway is not that digital payments fail to promote inclusion, but that their impact is conditional. Digital payment technologies work best when they are embedded within broader financial ecosystems that support trust, literacy, and consumer protection. Inclusion emerges from the interaction between technology, institutions, and users, not from innovation alone.
The evidence reviewed suggests that successful digital finance strategies prioritize sustainable use over rapid expansion. Understanding who adopts digital payments, how they use them, and why others remain excluded is essential. For the fintech industry, this means treating financial inclusion as a design and governance challenge as much as a technological one.