The adoption of digital payments in emerging economies: challenges and policy responses

Abstract

Purpose: This paper aims to present a comprehensive overview of the emergence and significance of digital payments, focusing on their impact on competitiveness and the need for policy interventions. In addition, it explores the design of policies that promote the adoption of digital payments, highlighting the benefits they offer to providers and users. Design/methodology/approach: The paper examines the technological advances that have driven the growth of digital payment systems. It identifies key requirements for successful adoption and discusses the associated risks, along with potential strategies to mitigate these risks. Findings: The findings emphasize the importance of responsible implementation and safeguarding the well-being of end users to fully realize the benefits of digital payment adoption. Understanding the inherent risks and establishing effective risk mitigation mechanisms are crucial. This necessitates the development of appropriate infrastructure to support the provision of digital payment services. Research limitations/implications: More research is needed to gain deeper insights into how emerging global trends in financial technology should be analyzed and understood by policymakers, service providers and users. Practical implications: The findings of this study can guide policymakers, private sector managers and consumers in comprehending the effects of emerging digitalization trends and determining their adoption responses accordingly. Originality/value: This paper stands out as one of the few research contributions that provide comprehensive and actionable policy recommendations to facilitate a smooth transition to a digital payments ecosystem that benefits all stakeholders.

Keywords: Digital payments, Digital risks, Regulation, Policy, Developing countries.