Digital payment systems have become the principal channel through which formal financial services reach previously excluded populations. This paper examines the relationship between digital payment adoption and financial inclusion using secondary evidence from the Global Findex Database 2025, GSMA mobile money statistics and transaction data from India's Unified Payments Interface (UPI), combined with a structured synthesis of twenty peer-reviewed studies. A conceptual framework links digital payment infrastructure to inclusion outcomes through four transmission mechanisms: reduction of transaction and travel costs, creation of digital transaction trails that substitute for collateral, digitisation of government-to-person and wage payments, and network-driven merchant acceptance. The evidence shows that global account ownership rose from 51 per cent of adults in 2011 to 79 per cent in 2024, that mobile money is now the dominant driver of ownership growth in low- and middle-income economies, and that UPI scaled from 0.9 billion to roughly 242 billion annual transactions between FY2017-18 and FY2025-26. The analysis nevertheless finds that access has outpaced use: dormant accounts, a residual gender gap, rising fraud exposure and connectivity deficits continue to separate nominal ownership from meaningful financial participation. Digital payments are therefore a necessary but insufficient condition for inclusion, and second-generation policy must shift from account opening to usage depth, consumer protection and interoperable public payment infrastructure.

 

Keywords: digital payments, financial inclusion, mobile money, Unified Payments Interface, digital public infrastructure, fintech, usage gap