Payments innovation: the key to unlock opportunities in high-growth countries and markets
14 May 2017
The payments innovation taking place in high-growth emerging markets is often underestimated. Yet countries such as India, parts of Africa and Latin America are home to a new wave of disruption that is fundamentally changing the financial services landscape.
In these markets, technology is breaking down the barriers that prevent consumers from accessing financial services.
By introducing modern payment models that open access to services such as credit and ecommerce, economies can prosper.
High-growth markets are unencumbered by the legacy of old technology and entrenched consumer behaviour. They can more easily adopt mobile-first, digital financial services than more established payment infrastructures.
Payments innovators such as PayU are driving consumer access to digital-centric payment technology in high-growth markets. The adoption and rise in popularity of mobile money networks in Africa, for example, is enabling millions across the continent to gain access to safe and secure banking solutions.
And with reports claiming that a 10 per cent increase in digitisation of the economy could increase GDP per capita growth rates by 40 per cent, there is a strong business case, as well as an ethical one, for the importance of innovation in these markets.
Better payments systems and services result in increased ecommerce and the ability to conduct business across country borders. Indeed, as companies such as PayU enable all corners of the globe to take advantage of digital financial services, aspiring international businesses can now access markets around the world that were previously too operationally challenging to enter.
Yet it is these markets that offer the biggest growth opportunity for businesses going global. According to the IMF, economic growth in emerging markets are likely to increase consistently over the next five years, while growth in developed economies looks set to remain depressed.
In India, 40 per cent of the population doesn’t have access to a bank account. The majority don’t have a credit rating. This has naturally stifled economic development in the past. However, technology can help to reach more people and measure creditworthiness in novel ways. Digital apps and services that enable customers to pay later, pay in instalments or only use credit when needed are increasing the number of consumers able to access payment services, and therefore increase participation in the economy.
Unburdened by legacy infrastructure, innovative businesses are implementing new types of payments models in high-growth markets. As an increasing number of consumers are able to access financial services and economies continue to prosper, more international businesses and brands will be able to tap into these markets and enjoy the opportunities on offer.