Digital Payment: Addressing disparities critical to bridging the digital divide and achieving financial inclusion – TyN Magazine

Digital technologies have reshaped the global economy, and India, China, and many African markets have become standout hubs for innovation in digital payments. Their mix of historically cash-heavy transactions, relatively low banking penetration, and rapid mobile adoption has created fertile ground for fintech solutions to scale quickly and deliver real-world impact.

Rapid adoption, persistent gaps

At a recent policy dialogue connected to South Africa’s Think 20, experts highlighted both the momentum and the obstacles in digital finance. There are an estimated 2.1 billion registered mobile money accounts worldwide, with over half held by people in Sub-Saharan Africa. Yet the promise of digital payments is not fully realized because too many users still face barriers that limit meaningful participation and long-term financial health.

• Affordability: Data, fees, and device costs remain prohibitive for many low-income users.
• Financial literacy: Without the skills to use services safely and effectively, people risk fraud and poor financial decisions.
• Access to digital tools: Patchy connectivity, lack of smartphones, and limited agent networks hinder uptake.
• Gender gaps: Women face structural barriers—from lower device ownership to social norms—that reduce usage and benefits.
• Transparency, trust, and security: Limited recourse mechanisms and inconsistent disclosure can erode confidence.

As one policy expert noted, digital payments now sit at the center of debates about sovereignty, power, and inclusion. Cooperation across borders and sectors is critical to expanding access for underbanked and underserved communities while maintaining stability and user protection.

What a stronger digital payments ecosystem requires

Panelists—including diplomats, industry leaders, academics, and civil society representatives—converged on several priorities for building a more inclusive and resilient digital finance landscape:

• Pair innovation with stability. Encourage responsible experimentation through regulatory sandboxes and pilot programs that emphasize consumer protection, operational resilience, and clear exit/scale paths. New services should meet baseline standards for reliability, transparency, and dispute resolution from day one.
• Make cross-border payments work better. Advance cooperative regulation and interoperability so people and small businesses can send and receive money affordably and quickly. Align technical standards and compliance (including AML/CFT), improve real-time settlement options, and support data portability to reduce friction across jurisdictions.
• Design for inclusion, not as an afterthought. Align initiatives with global development goals to ensure accessibility and equity are built into product design and policy. Practical measures include tiered KYC for low-value accounts, fee caps or subsidies for essential transactions, offline/USSD functionality, local language support, and accessibility features for people with disabilities. Gender-responsive approaches—such as targeted onboarding for women, community-based outreach, and products tailored to informal work—are essential.
• Scale digital and financial literacy. Offer relevant, context-specific education so users can navigate platforms safely. Partnerships among governments, providers, schools, and civil society can embed literacy in curricula, community programs, and onboarding journeys. Clear, simple user interfaces and in-app education help users understand fees, privacy settings, and fraud risks.
• Strengthen trust and security. Implement robust, privacy-preserving KYC; invest in fraud detection and consumer awareness; provide accessible grievance redress channels; and enforce transparent pricing and terms. User data should be protected with strong governance, consent mechanisms, and auditability.
• Promote public–private collaboration. Inclusive payments ecosystems thrive when regulators, central banks, payment providers, fintechs, telecoms, and civil society co-create solutions. Regular dialogue, shared sandboxes, and data-sharing protocols can align incentives, accelerate learning, and reduce systemic risk.

Geopolitics at the forefront

Digital payments are increasingly intertwined with national strategies, regional influence, and standards-setting. Alternative payment rails, regional networks, and evolving settlement mechanisms reflect broader shifts in economic alignment. Policymakers face a dual challenge: encourage domestic innovation and competitiveness while ensuring interoperability, openness, and user protections across borders. A cooperative stance—grounded in transparent rules and mutual recognition—helps avoid fragmented systems that raise costs and exclude vulnerable users.

Tokenization, cross-border innovation, and governance

Emerging models—from tokenized value to instant cross-border corridors—could redefine speed, costs, and programmability in payments. To realize these benefits, governance must keep pace: clear legal frameworks for digital assets, risk-based approaches to compliance, and strong data protection are essential. Experimental pilots should remain proportionate to risk, with independent evaluation and public reporting to build trust and inform scaling decisions.

The path forward

Digital payments have already expanded access for millions, but adoption alone does not guarantee inclusion. Closing the gap requires a full-stack approach: affordability and access, literacy and trust, robust consumer safeguards, and interoperable infrastructure that works across borders. With cooperation among policymakers, industry, and civil society—and inclusion built directly into design and regulation—digital finance can help people manage money more safely, participate in commerce, and build resilience.

The next phase is not just about more accounts or faster rails; it is about equitable value. When users can reliably save, transact, borrow, and insure on fair terms—and do so safely and confidently—the promise of digital payments becomes a catalyst for broader economic participation and development.