5 PAYMENT STRATEGIES TO ENTER EMERGING MARKETS

1. WHAT DEFINES EMERGING MARKETS?

Countries or regions that experience economic expansion, industrialisation, and a rise in consumer demands are known as Emerging Markets. They combine two extremes from the viewpoint of payment, where large populations are dependant on cash and traditional banking, even with rapid adoption of mobile phones, mobile wallets, and digital payments, which also influences niche sectors such as payment processing for alcohol businesses.

2. WHICH REGIONS HAVE THE FASTEST ECONOMIC GROWTH?

Emerging economies are a collection of various regions, each having its own payment behaviours, infrastructure, and growth trajectory, and not a single market. During the evaluation of investment opportunities and payment design strategies, businesses need to understand regional differences. 

• South and South East Asia: They are the fastest growing regions in the world. Difference between countries in the Asia Pacific region mean that a payment method that works in Singapore may not work in Vietnam.
• Sub-Saharan and North Africa: M-Pesa, a mobile money service in Sub Saharan Africa, provides financial access to millions who lack traditional banking service. In contrast, North Africa witnesses rapid growth in card-based payments and digital wallets due to an improvement in banking penetration. 

3. KEY BUSINESS OPPORTUNITIES IN EMERGING MARKETS

• Expanding Financial inclusion at scale: Many people remain unbanked or underbanked across emerging economies. From basic money transfers to savings and credit entry point is provided for financial services.
• Riding the wave of mobile Commerce: Powered by internet penetration and smartphone adoption, Mobile Commerce and e-commerce are growing fast. A significant share of this growth can be captured by payment providers that ensures smooth and secure checkout experience in local currencies. 
• Meeting Demand for Real-time payments:  Trust is built, digital finance is adopted, and a reduction in friction happens with real-time payments.
• Enabling cross-border trade and investment: Efficient cross-border payment is a must as global business expand into emerging economies. 

4. FIVE PAYMENT STRATEGIES TO ENTER EMERGING MARKETS

• Survey the payment landscape of your target market: From cash and card transactions to a list of growing alternative payment options, customer payment habits are evolving fast. It is important to understand the popular methods that is prevailing in your target market, including QR codes, mobile wallets, bank transfers, vouchers, and other options.
• Assess and prioritise your payment needs: It is important to check the reliability and and scalability of your payment solution. For example, technical stability will be helpful for handling a high volume of payments, especially of smaller ticket size if your target is the gig economy.
• Survey the competition to crystallise your approach: You may find a competitive edge if you survey the competition and learn what payment edges do and don’t integrate. Significant benefits can be yielded with the help of in-depth local market research, where merchants shall analyse their audience and closely collaborate with local PSPs. 
• Talk to local PSPs and partners: Local expertise is necessary in overcoming language barriers and providing tailored advice if you enter a vast region like Latin America due to it’s diverse payment landscape. 
• Visualise what success looks like: From the outset, define your strategy. Ensure that while considering cross-border payments and acceptance, you don’t miss any specific local payment methods and miss any revenue chance. You can set up a local entity in the region or collaborate with a local partner if you have a good local presence.