Disruptive FinTech: How Digital Payment Systems Are Changing Banking

This study explores the transformative influence of digital payment systems on traditional banking, focusing on competition, financial inclusion, market structure, and regulatory challenges. By synthesizing secondary data from BIS, World Bank, and real-world case studies in Kenya, China, and the EU, the research identifies how mobile wallets, P2P transfers, and contactless systems challenge conventional banking. Findings indicate a dual effect: while digital platforms intensify market competition and broaden financial inclusion, they also trigger rising privacy concerns and increased market concentration. The paper proposes strategic and regulatory recommendations to ensure sustainable innovation without compromising security or equity.