Digital payments.

This article reviews the adoption and usage barriers of digital payments (DP) in low-income countries, drawing on the Transaction Cost Index (TCI) database covering 16 countries in Sub-Saharan Africa and Asia. It categorizes constraints at the macro-level (adoption barriers such as cash availability, coordination failures, network interoperability, social capital, and supply-side limitations) and micro-level (usage barriers including service quality, monetary and non-monetary costs, privacy concerns, and homophily between agents and consumers). The paper highlights that despite rapid growth in DP adoption, a large share of the population remains disconnected or underutilizes these services, limiting their potential for financial inclusion and economic development. It concludes by identifying key areas for future research, including market structure effects, improved measurement of service quality, broader transaction types beyond person-to-person payments, and rigorous cost-benefit analyses to better understand welfare impacts.