Giving people in developing nations better smartphones and faster internet does not increase their use of digital payments.
April 26, 2026
Original Paper
Formal Financial Access and Digital Payment Adoption in Emerging and Developing Economies: Multilevel Evidence from the Global Findex 2021 on Institutional Moderation
SSRN · 6636578
The Takeaway
Development experts often focus on the digital divide, assuming that technology and education are the main hurdles to financial inclusion. Data from the Global Findex reveals that the quality of a country's government and its laws is the actual bottleneck. People will not put their money into digital apps if they do not trust the regulatory system to protect their funds. Connectivity and individual skill levels are secondary to the institutional stability of the state. Bridging the digital gap requires fixing the government before fixing the internet.
From the abstract
Despite rapid growth in formal financial account ownership across emerging and developing economies, a persistent gap between account access and active digital payment use remains a barrier to financial inclusion. Drawing on Technology Acceptance Theory (Davis, 1989; Venkatesh et al., 2003) and Institutional Theory (North, 1990; Scott, 1995), we employ multilevel logistic regression on 143,887 individuals nested within 139 economies from the World Bank Global Findex 2021. An intraclass correlati