Digital Payments Ecosystem

Definition ∞ A digital payments ecosystem comprises the interconnected network of technologies, institutions, and regulations that facilitate electronic transactions. This system includes payment processors, digital wallets, banking infrastructure, and various digital currencies. Its functionality supports commerce and financial transfers in the modern economy.
Context ∞ The digital payments ecosystem is undergoing rapid transformation with the advent of blockchain technology and digital assets, challenging traditional payment rails. Innovations in this space seek to reduce friction, accelerate settlement times, and lower costs for both domestic and international transactions. Regulatory bodies are working to establish frameworks that promote innovation while ensuring consumer protection and financial stability within this evolving landscape.