Digital contact tracing provides an expeditious and comprehensive way to collect and analyze data on people's proximity, location, movement, and health status. However, this technique raises concerns about data privacy and its overall effectiveness. This paper contributes to this debate as it provides a systematic review of digital contact tracing studies between January 1, 2020, and March 31, 2021. Following the PRISMA protocol for systematic reviews and the CHEERS statement for quality assessment, 580 papers were initially screened, and 19 papers were included in a qualitative synthesis. We add to the current literature in three ways. First, we evaluate whether digital contact tracing can mitigate COVID-19 by either reducing the effective reproductive number or the infected cases. Second, we study whether digital is more effective than manual contact tracing. Third, we analyze how proximity/location awareness technologies affect data privacy and population participation. We also discuss proximity/location accuracy problems arising when these technologies are applied in different built environments (i.e., home, transport, mall, park). This review provides a strong rationale for using digital contact tracing under specific requirements. Outcomes may inform current digital contact tracing implementation efforts worldwide regarding the potential benefits, technical limitations, and trade-offs between effectiveness and privacy.