The Role of Digital Financial Services (DFS) in Facilitating Merchant Payments in Asia

LightCastle Analytics Wing
February 13, 2024
The Role of Digital Financial Services (DFS) in Facilitating Merchant Payments in Asia

This report provides a comprehensive overview of the pivotal role played by digital financial services (DFS) in facilitating merchant payments and driving financial inclusion across Bangladesh, India, Indonesia, and Pakistan.

Additionally, the report underscores the significance of DFS in driving financial inclusion and digitization in the merchant payment segment, while also addressing the challenges and implications of these initiatives. 

South Asia’s Digital Financial Services (DFS) landscape is evolving rapidly, reflecting a growing trend towards digital payments and merchant digitization. In Bangladesh, India, Indonesia, and Pakistan, significant strides are being made to embrace digital finance and foster inclusive growth.

Interoperability remains a common goal across South Asia, driving progress in digital transactions and financial inclusion. As countries tailor policies to unique contexts, collaborative efforts are essential for sustainable growth and comprehensive financial inclusion.

Key Findings From the Report:

  • India Leads Interoperability Drive in DFS: Merchant payments through Unified Payments Interface (UPI) account for 57% of total transactions, showcasing India’s digital payment ecosystem’s maturity. India’s success with UPI underscores the power of interoperability in promoting financial inclusion and extending its global reach.
  • Indonesia’s QRIS Initiative Boosts Micro-Merchant Digitization: Indonesia boasts 31 Mn Quick Response Code Indonesian Standard (QRIS) accounts, with an 81% share of merchant accounts, indicating high QR code-based digital payment adoption.
  • Bangladesh Forges Ahead in Digital Banking and Financial Inclusion: Bangladesh’s new guidelines have approved 8 entities out of 52 applicants to operate digital banks, signaling a significant shift in the digital banking sector. Public initiatives like Bangla QR and ekpay solutions aim to promote cashless payments for MSMEs, reflecting Bangladesh’s commitment to advancing digital banking and cashless transactions.
  • Pakistan’s Innovative Solutions Drive Digital Financial Inclusion: Pakistan’s introduction of the Raast platform marks significant strides in processing transactions totaling USD 22 Bn, showcasing the nation’s commitment to digital financial services.


Ameera Fairooz, Business Consultant at LightCastle Partners has authored the write-up. For further queries, contact [email protected]

digital financial services report If you are interested to learn more Document download full report

Note: This report, funded by the Bill & Melinda Gates Foundation, has been jointly prepared by LightCastle Partners, Larive International, PT Clarity Research, and Sannam S4 Ltd. The findings and conclusions contained within are those of the authors.

WRITTEN BY: LightCastle Analytics Wing

At LightCastle, we take a systemic and data-driven approach to create opportunities for growth and impact. We are an international management consulting firm which creates systemic and data-driven opportunities for growth and impact in emerging markets. By collaborating with development partners and leveraging the power of the private sector, we strive to boost economies, inspire businesses, and change lives at scale.

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