Digital financial inclusion enables the integration of millions of underprivileged individuals into the financial system, making poverty alleviation increasingly achievable. In a developing country like Pakistan, which has a large unbanked population, this presents a significant opportunity for economic empowerment through mobile banking, digital wallets, and fintech innovations. These tools enhance financial participation by improving access to savings, credit, and financial literacy. This research highlights how digital financial inclusion can significantly contribute to poverty alleviation. However, key challenges remain, including limited digital infrastructure, gender disparities, cybersecurity risks, and low trust in digital systems. By examining both policy frameworks and grassroots initiatives, this study offers actionable insights into how these barriers can be addressed. It emphasizes that digital finance, when effectively implemented, can promote sustainable development and help bridge economic disparities in Pakistan’s rapidly evolving digital economy.