Digital Financial Services (DFS) offers the potential to bring billions of previously financially excluded customers into the ambit of formal financial services.It has the power to transcend the barriers of financial exclusion as it reduces the costs associated with the small value transactions; reaches out to larger numbers of people with innovative, low cost technology (mobile phones, card based systems, POS machines etc) and delivery channels (airtime sellers, grocery shop owners etc.); overcomes the issue of lack of physical infrastructure needed to distribute the financial products.While there is a huge opportunity to leverage digital technology, there are challenges that can potentially hamper the potential.