Digital Payments, Informality and Economic Growth

Digital payments have become quite popular in advanced economies, but their rapid growth in emerging market and developing economies (EMDEs) is especially noteworthy. Between 2014 and 2021, the number of adults in EMDEs using digital payments increased from 35 to 57 percent. This raises the question of how digital payments contribute to economic growth and development. 

To date, macro evidence is limited on the extent to which digital payments impact economic growth. To address this gap, this study examines the relationship between digital payment adoption and growth, productivity and informal labor in 101 economies from 2014 to 2019.