Financial Inclusion, Digital Payment Systems, And Sustainable Economic Growth in Developing Countries

Abstract

Levying access to financial services and introducing digital payment platforms have become key channels to promote inclusive and sustainable economic growth in developing countries. The use of formal financial services allows children and small businesses to save, secure loans, conduct payments, absorb risks, and pursue other economic activities. Digital payment platforms further contribute to the process by reducing transaction fees, speeding up the process, improving transparency, and connecting the unbanked and underbanked population with financial systems. This work examines how these links are established for financial inclusion with P2P and digital payment systems, digital financial literacy, trust in digital financial services and sustainable economic development in the context of developing nations particularly within the Delhi NCR region of India. This research was descriptive and explanatory, used samples of 300. The research utilizes questionnaires that were filled out and scored on a 1 to 5 Likert scale and secondary data such as published journal articles, policy documents, institutional databases, and scholarly literature. Data analysis included demographic profile, descriptive statistics, reliability assessment, Pearson correlation and multiple regression evaluation. The study generates four hypotheses and provides an illustration of the technique of analysis of the relationships between a multi-noded concept such as digital financial inclusion and a concept with only a few nodes, with particular reference to digital payments systems and/or digital financial literacy and trust in financial institutions and their activities, and to perceived sustainable economic growth. The research argues that the effect of digital payment systems on sustainable economic growth can only be achieved if it's coupled with cost-effectiveness, digital literacy, protection of consumer rights, stable infrastructure, and institutional support.