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ChapterTitle
Insights and Expertise

Why ecommerce This poses a real puzzle for online businesses: how do you
provide payment options that local consumers trust and
growth hinges on use all the time, especially without leaning on the cred-
it card networks that are so common in more developed
markets?
local payment Mobile-first economies

solutions This is where mobile-first economies come into play. In
emerging markets, mobile phones are doing far more than
just making calls; they are also managing money. Mobile
wallets, direct bank transfers and peer-to-peer payments
are now essentials. For instance, in Nigeria, where over
90 percent of people have a mobile, everyday transactions
like bank transfers and mobile money are super common.
Meanwhile, in India, the Unified Payments Interface (UPI)
zips through more than 11 billion transactions a month,
way more than card payments. Over in Brazil, the Pix sys-
tem lets you make instant transfers with just a QR code,
and it's a huge hit, with over 4 billion transactions every
month.

These local payment preferences can make or break an on-
line business. As the co-founder of a payments technology
business for often overlooked geographies, I've worked
By Zaki Farooq with companies that assumed offering well-known global
payment options would be enough, only to face high cart
PayFuture abandonment rates. Success comes from integrating the
payment methods that local consumers already trust.
young entrepreneur in Lagos sells handmade
jewelry through Instagram, reaching custom- Cross-border remittances are also a lifeline for many econ-
ers across West Africa. In Jakarta, a small busi- omies, especially in regions like Africa, Southeast Asia
A ness owner uses a local ecommerce platform to and Latin America. Total 2024 global remittances to low-
export crafts to Europe. In São Paulo, an electronics retail- and middle-income countries are projected to exceed $650
er sees sales surge after adding mobile payment options. billion, with much of that flowing through digital wallets
These stories are becoming more common as businesses and mobile platforms. For online businesses, integrating
in emerging markets tap into the vast potential of digital with these remittance channels is a gateway to millions of
commerce. potential customers.

Ecommerce sales in emerging markets are booming. Ac- I've seen businesses thrive by tapping into remittance net-
cording to Bain & Co., Brazil, India and Indonesia are all works, enabling customers to use their incoming funds for
seeing double-digit growth in online retail, while coun- everyday purchases, from groceries to electronics. But the
tries like Turkey and Poland are attracting businesses with challenge remains: high fees and slow settlement times
rising internet penetration, mobile commerce and a grow- still plague many cross-border transactions. Payment pro-
ing middle class. For online businesses and payment pro- viders that can offer faster, cheaper solutions will not only
viders, the opportunity is clear, but then so are the chal- attract more customers but also help merchants convert
lenges. more sales and build long-term loyalty.

The promise of emerging markets Banks and fintechs: partners in progress
Emerging markets are home to 85 percent of the world's The complexity of emerging market payments means no
population and, by 2030, 75 percent of consumers aged single provider can handle everything on their own. This
15 to 34 will live in these regions. This young, tech-sav- has led to an increase in partnerships between traditional
vy demographic is driving demand for digital services, banks and fintech companies. Banks contribute their reg-
including ecommerce. With internet access expanding ulatory knowledge and established infrastructure, while
rapidly and smartphone adoption reaching new highs, fintechs bring the flexibility and innovation needed to ad-
such as Egypt's 97.3 percent smartphone penetration, the dress local needs. For merchants, working with payment
appetite for online shopping is only growing. However, providers that have strong local partnerships is vital. Deal-
the payment infrastructure in many of these markets is ing with regulatory hurdles, fraud risks and technical in-
not straightforward. Traditional banking systems can be tegration can be tough. But the right payment partner can
patchy, and a lot of people don't even have bank accounts. make these challenges more manageable. Having access
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