International Journal of Multidisciplinary Research and Growth Evaluation

Digital Financial Services, Transaction Velocity, and Macroeconomic Growth: A Systematic PRISMA Review and Research Agenda for Emerging Economies

Shazia Noor¹, Dr. Priyanshi Gupta²

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Abstract

Digital Financial Services (DFS) and Digital Public Infrastructure (DPI) have made so many changes in retail financial intermediation, allocation of capital, and macroeconomic circulation in developing market economies. By reducing the physical overhead and operational frictions linked with paper currency exchange, interoperable payment platforms change monetary circulation velocity, micro-enterprise formalization, and household liquidity management. Instead of the extensive usage of technology, scholarly research on the elasticity of digital transactional capacity output is still scattered.  Following the PRISMA (Preferred Reporting Items for Systematic Reviews and Meta-Analyses) methodology in a precise manner, this paper examines 110 peer-reviewed journal articles, central banks' working papers, and doctoral dissertations published from 2011 until 2026 in Scopus, Web of Science (SSCI), and institutional repositories. The findings have been categorized into four main thematic areas which include (i) transmission mechanism theory that links digital rails to endogenous growth, (ii) growth elasticity empirically examined in developing country panels, (iii) retail payment systems and the case of India Stack, and (iv) subnational spatial inequalities and demographics. The review establishes that while digital payment systems reduce marginal transaction processing costs to near-zero levels and accelerate the velocity of money, their macroeconomic growth dividends are mediated by physical capital accumulation, institutional quality, and regional telecommunications infrastructure. Crucially, existing literature remains heavily skewed toward micro-level behavioral adoption surveys, creating a methodological gap in macro-econometric modeling—specifically time-series ARDL bounds testing and dynamic panel Two-Step System GMM estimations—that directly quantify real GDP and sub-national output elasticities. A structured future research agenda is formulated to bridge these empirical gaps.

Keywords: Digital Financial ServicesFinTechUnified Payments Interface (UPI)Economic GrowthSystematic Literature ReviewPRISMADynamic Panel Econometrics

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