Digital Payment Ecosystems as Socio-Technical Systems: Digital-Infrastructure-Based Fintech Diffusion, Regulatory Coupling, and Private-Sector Credit Exposure in OECD Economies

This study examines whether the diffusion of financial technology expands or constrains private-sector credit across OECD economies, and whether regulatory quality conditions that relationship. Fintech diffusion is operationalized through a composite index of general digital-infrastructure indicators (internet use, mobile subscriptions, and ICT-service exports); this index proxies the broader digitalization environment rather than measuring payment-platform use, embedded credit, or digital lending directly. It conceptualizes digital payment ecosystems as complex financial systems in which technological diffusion, regulatory capacity, and credit dynamics co-evolve through feedback mechanisms. The policy discourse often assumes that digital financial inclusion automatically enhances resilience, yet evidence on credit expansion and systemic exposure remains contested. Using an unbalanced panel of 37 OECD economies from 2015 to 2024, comprising 356 observations, the analysis employs Driscoll–Kraay standard errors to address cross-sectional dependence within a common-slope two-way fixed-effects framework, along with panel quantile regression at the 10th, 50th, and 90th percentiles and Dumitrescu–Hurlin causality testing. Fintech diffusion is positively and statistically significantly associated with private-sector credit exposure, and this association is robust to a two-way fixed-effects specification. The quantile estimates show that the association is present at these selected points of the conditional distribution and strongest at its lower and upper tails, a pattern consistent with complex-adaptive-system dynamics in which effects vary across system states. Contrary to the negative-feedback expectation, the interaction between fintech diffusion and regulatory quality is positive, consistent with high-quality institutions enabling rather than restraining the translation of fintech into credit, though the observational design identifies this interaction rather than the mechanism producing it. The findings therefore shift the discussion from fintech as a stand-alone inclusion tool to fintech as a system-shaping force with implications for institutional resilience, macroprudential supervision, and systemic credit exposure. Because domestic credit to the private sector aggregates household and corporate lending, the policy implication below is framed at this aggregate level: digital payment infrastructure should be governed jointly with consumer protection, credit reporting, and financial-resilience mechanisms rather than promoted as a neutral technological upgrade.