The Green Sheet Online Edition
April 4, 2025 • 25:04:01
Why ecommerce growth hinges on local payment solutions
A young entrepreneur in Lagos sells handmade jewelry through Instagram, reaching customers across West Africa. In Jakarta, a small business owner uses a local ecommerce platform to export crafts to Europe. In São Paulo, an electronics retailer sees sales surge after adding mobile payment options. These stories are becoming more common as businesses in emerging markets tap into the vast potential of digital commerce.
Ecommerce sales in emerging markets are booming. According to Bain & Co., Brazil, India and Indonesia are all seeing double-digit growth in online retail, while countries like Turkey and Poland are attracting businesses with rising internet penetration, mobile commerce and a growing middle class. For online businesses and payment providers, the opportunity is clear, but then so are the challenges.
The promise of emerging markets
Emerging markets are home to 85 percent of the world's population and, by 2030, 75 percent of consumers aged 15 to 34 will live in these regions. This young, tech-savvy demographic is driving demand for digital services, including ecommerce. With internet access expanding rapidly and smartphone adoption reaching new highs, such as Egypt's 97.3 percent smartphone penetration, the appetite for online shopping is only growing.
However, the payment infrastructure in many of these markets is not straightforward. Traditional banking systems can be patchy, and a lot of people don't even have bank accounts. This poses a real puzzle for online businesses: how do you provide payment options that local consumers trust and use all the time, especially without leaning on the credit card networks that are so common in more developed markets?
Mobile-first economies
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 system 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 online business. As the co-founder of a payments technology business for often overlooked geographies, I've worked with companies that assumed offering well-known global payment options would be enough, only to face high cart abandonment rates. Success comes from integrating the payment methods that local consumers already trust.
Cross-border remittances are also a lifeline for many economies, especially in regions like Africa, Southeast Asia and Latin America. Total 2024 global remittances to low- and middle-income countries are projected to exceed $650 billion, with much of that flowing through digital wallets and mobile platforms. For online businesses, integrating with these remittance channels is a gateway to millions of potential customers.
I've seen businesses thrive by tapping into remittance networks, enabling customers to use their incoming funds for everyday purchases, from groceries to electronics. But the challenge remains: high fees and slow settlement times still plague many cross-border transactions. Payment providers that can offer faster, cheaper solutions will not only attract more customers but also help merchants convert more sales and build long-term loyalty.
Banks and fintechs: partners in progress
The complexity of emerging market payments means no single provider can handle everything on their own.
This has led to an increase in partnerships between traditional banks and fintech companies. Banks contribute their regulatory knowledge and established infrastructure, while fintechs bring the flexibility and innovation needed to address local needs. For merchants, working with payment providers that have strong local partnerships is vital.
Dealing with regulatory hurdles, fraud risks and technical integration can be tough. But the right payment partner can make these challenges more manageable. Having access to local payment networks through a single integration saves time, reduces costs and improves the customer experience.
Overcoming infrastructure gaps
Infrastructure challenges, such as unreliable internet access, limited financial services and fragmented regulatory frameworks, can deter businesses from entering emerging markets. But innovation is filling these gaps. In Kenya, M-Pesa has transformed how people manage money, while in Bangladesh, bKash has brought mobile financial services to millions. These solutions are not just convenient; they're essential.
Businesses have often hesitated to expand due to infrastructure concerns, only to realize that the demand far outweighed the challenges. By embracing mobile-first payment methods, they not only accessed new markets but also contributed to financial inclusion.
For both payment providers and merchants, emerging markets are revenue streams, but they also offer a chance to drive economic inclusion. By enabling secure, affordable digital payments, providers help businesses reach underserved populations, while merchants benefit from higher conversion rates and expanded customer bases. Offering familiar payment options can build trust, increase sales and create loyal customers.
Payment providers that understand local markets, comply with regulations and offer scalable solutions will lead the charge. For merchants, this means working with partners who can seamlessly integrate the right local payment methods, both for today's customers and tomorrow's innovations.
Why the effort is worth it
Emerging markets are expected to contribute 65 percent of global economic growth by 2035. Ecommerce in these regions is set to grow at double-digit rates, driven by rising disposable incomes, expanding internet access and a young, digital-native population. For online businesses, the potential is too large to ignore. But growth won't come from offering one-size-fits-all solutions. It will come from understanding local markets, building partnerships, and delivering seamless payment experiences. As someone who's worked in these markets, I can say that while the challenges are real, the opportunities are even greater.
The road to success in emerging markets isn't always smooth, but it's one worth traveling. With the right payment strategies, businesses can tap into the fastest-growing consumer markets, build lasting relationships and drive sustainable growth. 
Zaki Farooq, is co-founder and chief technology officer at PayFuture, , which was designed from the ground up to offer market changing innovative features and technology. payment technology. Contact him via LinkedIn at linkedin.com/in/zakifarooq.
Notice to readers: These are archived articles. Contact information, links and other details may be out of date. We regret any inconvenience.
