KEY POINTS

  • This report compiles various payments snapshots that illustrate how different markets are migrating toward digital payments adoption. Each snapshot provides an overview of the payments industry in an emerging market — defined as a region with a rapidly evolving economy and increasing digital access — and outlines the details of that country's unique approach to digital payments development. Emerging markets make up 85% of the global population, representing a massive segment with considerable room for payments innovation.
  • India, China, Brazil, and Kenya are emblematic of four different noncash development strategies payments firms can replicate based on their respective market conditions. These four regions represent unique and meaningful expansion opportunities for payments providers, but they also highlight strategies firms can apply in other regions with similar market conditions. 

    • India highlights the ability to enact government initiatives to turn smartphone innovation into access to the formal economy. A late 2016 demonetization initiative in which the government removed 86% of the country’s currency from circulation propelled digital payments into the mainstream in India. As the industry grows fivefold to an estimated $1 trillion by 2023, the country has seen an influx of multinational payments and tech players trying to enter the space and grab an early advantage in the market. 
    • China is a global pacesetter for QR code-based payments and can serve as a blueprint for developing markets to turn popular smartphone apps into payment tools. Alipay and WeChat Pay control 92% of the country's mobile payments market and are the primary payment methods for purchases at restaurants, in stores, or even to top street performers. This dominance makes China unique in that mobile payment adoption lapped card adoption in wide swaths of the population. 
    • Brazil exemplifies a government successfully breaking up a long-standing duopoly to drive payments competition. High competition in Brazil's payment processing space was catalyzed by government initiatives to let in more competition. That's ultimately made it more affordable for merchants to accept card payments and driven more consumers to use them, increasing their prevalence as a payment tool.
    • Kenya is leading in spearheading mobile money innovations and exemplifies how firms can leverage utilities, like telecom access, to build out financial services' access to the mainstream. Mobile money was invented in Kenya and solely helped the country achieve [...]