While it is agreed that financial inclusion is a key enabler in alleviating poverty and enhancing economic growth, it is ironic that still more than half of the world’s population does not have access to basic financial services. Financial Inclusion is the quest of delivering financial services including payments, savings, credit, insurance, etc. at affordable costs to the excluded sections of the society and low-income households where traditional finance lacks its reach. 

A large group of the society still remains unbanked which has led to a lot of financial instability among the people in such groups who do not have access to financial services and products. This is why we need financial inclusion as it is the bridge between economic opportunity and outcome. Access to financial services will open doors for families, allowing them to smooth out consumption and invest in their futures through education and health. 

Digital financial services have been a critical component in promoting financial inclusion and driving economic growth. Delivering financial services digitally could benefit billions of people by rising inclusive growth that adds to the GDP of emerging economies. Supporting universal access to transactional services is crucial in the realization of the potential of an integrated digital payments ecosystem to improve levels of financial inclusion.

New digital transactional platforms can offer convenient ways to make payments and access to additional financial services such as savings, credit, insurance and investment products. They can also generate data that financial providers can use to design customized financial products as per the repayment capacity and financial needs of the specific poor and low-income customer segments. These technological advances already have shown real results in improving access to financial services exceptionally by lowering costs and extending services into areas where bank branches may not exist.


An integrated digital payments ecosystem consists of several building blocks, users and an enabling environment such as:

  • Digital Financial Services Providers (Banks, Licensed Non-Banks, Other Financial Institutions, and Fintech.
  • Services Users (Merchants, Businesses, Governments, Institutions Development, etc.)
  • Enabling environment (Governments’ policies, laws, and regulations, etc.)

Approach for building an integrated ecosystem

Engagement of various stakeholders through partnerships

Developing, establishing, and overseeing an inclusive digital payments ecosystem involves engagement with a more distinctive and larger group of players than the typical payments oversight role. Partnerships among various players enable them to progress faster as they leverage each other’s strengths and expertise. With the increased importance of digital financial services, all the players must actively coordinate and participate in advancing financial inclusion like the fintech companies are doing. Fintech companies are changing the way digital lending and other financial services work. Fintech partnership with telcos is enabling access to financial services such as credit, insurance, and savings to the underserved people through their mobile phones. The fintech companies usually employ a mobile app and estimate the customers’ worthiness using data on their mobile devices. And that data derived from digital technologies can help commercial banks and other bureaus to come up with suitable financial products and evaluate prospective clients more efficiently and improve financial services.

Balancing Innovation, Market Protection, and System Integrity

Digital financial services are characterized by constantly evolving technological and service innovations. Such innovations play an important role in driving costs down, extending access to more people with improved service quality. However, there are some risks associated with the introduction of new technologies that need to be alleviated to ensure the integrity of the payment systems. A flexible approach that considers innovation should be followed such as the use of regulatory sandboxes carefully to test out innovations.

Building Trust in Digital Payments

In digital payments ecosystems, many users may be first-time users of financial services with a low level of financial and technological literacy and may have a distrust in financial services. So, the financial services should be provided responsibly with transparency to build people’s trust in digital financial services. Transparency around the cost and service conditions of using the ecosystem’s payment services is important in getting users to trust the system. The establishment of effective risk management frameworks to deal with risks to both end-users and service providers is important is establishing trust and promoting use.  

Establishment of a proportionate regulatory framework that is appropriate to the market context

The setting up of an integrated digital payments ecosystem is a complex process that requires distinct and coordinated management to achieve a favorable outcome of increased and beneficial use of the system. This requires an agreed-upon approach and active participation by all stakeholders during the ecosystem’s development and operation to ensure that there are no barriers in accessing the digital payment ecosystems. Stakeholders should coordinate with regulators and policy-makers and converse with joint public-private forums to share and compare perspectives for necessary and meaningful actions.

Progress in developing an integrated ecosystem for financial inclusion depends on all stakeholders working together so that private and public sector leaders can align on common interests. Having an effective partnership structure between stakeholders can bring together different elements of a complex system in an organized manner to facilitate the effective functioning of individual entities and the system as a whole.

The interwoven collaboration between stakeholders will result in an effective and authoritative position on financial inclusion and, as a country, they can achieve more in terms of financial inclusion when working together. So, to achieve economic development through financial inclusion, stakeholders must work together amicably with the same purpose.

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