Ways to increase your payment conversion rates by over 20%

Businesses who sell products and services online often sell via a website known as an ecommerce website. These websites accept online payments from customers for items and services that they wish to purchase. If a potential customer is on the website, adds an item to the shopping cart, goes to the payment page and then doesn’t complete their order, this is an example of ‘checkout abandonment,’ which results in a reduction in sales orders.

To reduce the risk of checkout abandonment and to ensure that more customers complete their purchase on your website, we have listed below the main areas of consideration which could increase your conversion rates by over 20%. This leads to an increase in sale orders.

  • Create a user-friendly experience – Make your website easy to navigate, especially for mobile use as more people are purchasing products and services online via mobile devices. Make sure your website is not only mobile friendly but also simple to use. This will also involve streamlining your website’s navigation. You may wish to avoid having too many product categories.
  • Ensure you website speed is fast – There’s a 2 second rule. If your website takes longer than two seconds to load, it is likely that over 50% of your website visitors (potential customers) will lose interest. A delay of just one second can result in a 7% reduction in website sale conversions.
  • Check for errors on your payment pages – If your payment page has errors on it your customers are going to find it hard to navigate and it may make them confused about the payment process, which could result in your prospective customers abandoning the shopping cart and leaving the website. It’s crucial to proofread your payment page(s) to make sure that they’re free from errors. It is also useful to test your payment page and do ‘test,’ orders to make sure the process goes smoothly and works well with no errors.
  • What payment options are you offering? – Are you offering enough payment options to cater for the needs of your customers? Some customers from different countries may have different preferred payment options.
  • Use Analytics – By using analytics you can gain insight into your customers website journey. Insightful data is valuable to help your business to make strategy decisions. With the right analytical tools, you can find out a lot about your customers. This data can also help you with your marketing targeting and ongoing strategy.
  • Consider partnering with a payment and / or technology provider who can ensure that your e-commerce website is of a good standard for encouraging customers to complete the full payment process.
  • Consider using a conversion recovery tool like the one we offer at Payfuture. Our conversion recovery tool will offer the customer on your website, an alternative local payment method if a transaction has declined for any reason. This also improves customer retention statistics. Coupled with our unique AI technology that predicts an approve or decline before it happens – this is one of the most powerful propositions available in the market.
  • Our conversion recovery system can convert up to 20% of potentially failed transactions into approvals.

Find out more here – PayFuture

Payfuture Launches AI Driven Customer Conversion Tool That Saves Merchants Up To 20% Of Lost Customer Check-outs



Singapore (31 01 2021) Global Payment Technology provider, Payfuture, has launched a unique AI driven ‘Customer Conversion Recovery Tool’. This ground-breaking innovation significantly reduces the number of online customers, who would previously have have checked out – unlikely to return. Recognising that many of these sales are lost at the payment approval stage – Payfuture’s system sets out to overcome initial payment difficulties, converting lost sales into business. In practice, the new system can save up to 20% of check-outs; thus paying for itself at a very early stage.

Where transactions are declined, Payfuture’s Customer Conversion Recovery tool will offer the customer an alternative local payment method. This significantly boosts approval rates whilst improving customer retention statistics. Uniquely, the process is driven by Payfuture’s advanced AI technology. This anticipates when an online client is about to abandon a transaction or needs support with a payment, allowing for automated chatbots or the customer call centre to re-engage promptly before the sale is lost. As a truly global solution, the Payfuture toolset will localise language, currency and use the most used local payment platform as standard, for the best-by-country user payment experience.

The Conversion Tool will work with most leading payment platforms and has also been fully integrated with Payfuture’s own widely acclaim Payment Connection platform. No other integrated solution offers such a powerful global proposition to the world’s Merchants.

Manpreet Haer, Co-founder of Payfuture says: “Tragically, billions of dollars are lost each day as clients abandon their e-Commerce check-out pages. We worked out though, that by using ‘AI’ to assess clients alongside a powerful recovery tool, we could convert up to 20% of failed transactions at the payment stage – by converting them into approvals. This was such a huge source of potential extra revenue that initial interest from Merchants has been extremely high – so we expect demand to be very strong indeed.”

Note to Editors:
PayFuture was founded in 2019 by veterans of the payments technology and cyber security sectors. The business was formed to provide a best of breed alternative local payment connector focusing on providing market leading global payment technology.

The founders realised that in order to be successful in existing as well as emerging ecommerce markets, a first rate client journey was paramount.

Created by a team of innovators, AI technologists and payments enthusiasts, Payfuture is designed to offer an experience, with market changing features and technology.

For more information on the tool or Payfuture get in touch at info@payfuture.net



Expanding your business in the UAE? 5 tips for doing so

The United Arab Emirates is made up of seven different emirates. These are Abu Dhabi, Dubai, Sharjah,Ras al-Khaimah, Ajman, Umm al-Quwain and Fujairah. Dubai and Abu Dhabi have about six million of the 9.5 million population in those areas. These are popular areas for business and trade.

The UAE has become a financial powerhouse with a favorable tax system and liberal trade regimes. UAE is also an attractive investment hub and they have a ‘2021 vision.’ The UAE Vision 2021 was launched by H.H. Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai. The Vision aims to make the UAE among the best countries in the world by the Golden Jubilee of the Union. Their goals help to facilitate a well-regulated and secure business ecosystem ideal also for foreign investors and businesses to trade there.

These tips and considerations are based on transacting in the UAE, if you’re a non-UAE business.

Let’s firstly look at some stats:
  • Smartphone penetration – Just over73%
  • Internet penetration – Just over 93%
How do people pay for goods and services in the UAE?
  • 59% Credit cards
  • 27% Mobiles
  • 7% E-wallets
  • 6% Prepaid cards
  • 1% Bank transfer

The use of e-wallets is on the rise and the majority transact with credit cards using mobile devices to make payments. Ensure that you accept these payment methods so that you don’t lose potential customers

1. Due diligence, research and partnerships: Some of the practices and regulations in the UAE relating to business and trade may be different to what you are used to, so do your due diligence on all of this. There is an Authorised Economic Operator in the UAE. The UAE Authorised Economic Operator (AEO) program also provides an opportunity for businesses engaged in international trade activities to partner with Dubai Customs through a mutually trusted relationship. The AEO program can be valuable for businesses engaged in international trade activities in the UAE. They may also be able to give you valuable advice.

2. Understand the risks: Understand the risks and opportunities around foreign exchange and changes to currency such as currency fluctuations. This could affect your business. Also, understand if there are any buyer risks, and know what they are. This could mean checking if a potential business client is in insolvency, before transacting with them

3. Legal agreements & payment terms: Make sure that you have a legal agreement in place relating to your payment terms, specifically relating to non-payment of goods for example.

4. Insurance: Look into insurance options for doing business in the UAE.

5. Payment methods: Fast payments are crucial in the UAE. Ensure you have a secure payment option to accept payments in the UAE. As many people in the UAE use mobiles to pay for goods you need to make sure you offer a simple and secure mobile payment option. You may need to partner with a provider for this. You should also make sure you have a good payment gateway in place, which is a merchant service that authorises payments. Payfuture can help with your payment solution needs. You also need to have efficient credit control procedures when selling overseas.

Payfuture, the local Payments connector opens a world of opportunities for global expansion including in the UAE. Contact us to find out how we can help you make expanding your business to the UAE a success.

10 reasons why international merchants should offer better payment options to LATAM customers

Why Latin America? LATAM is a region full of potential opportunities for those who know where to find them. With 20 countries and around 600 million people, there is an opportunity for your business.

Latin America has a lot of economic growth over the past 10 years. Whether you sell food or even luxury goods there’s lots of opportunity in Latin America. It is also known as a region for large volume exporting.

Taking a closer look specifically at the payment sector in LATAM, those residing in Latin America use different alternative payment methods (APMs) to purchase goods and services. These payment methods include using local credit cards, bank transfers, cash vouchers, the option to pay in instalments and paying via mobile wallets such as Apple Pay. Apple Pay has only recently become available to those in Mexico.

The impact of the Coronavirus pandemic has had an impact on LATAM and it has accelerated many trends in the payments sector. The number of APMs available to Latin American consumers is on the rise. Online card payments in Chile doubled in March 2020 in comparison to March 2019. More people are buying online from businesses across borders.

Paying in instalments is a popular payment option in LATAM. According to statistics, about 60% of ecommerce is currently transacted via this method. If we take a closer look at Brazil, they have an ecommerce installment rate as high as 80%.

Merchants doing business in Latin America should consider supporting the needs of consumers here.This could be by providing online instalment payment options to match local expectations or by providing them with ways to pay securely on their smart devices regardless of whether they have a bank account or not. Businesses can apture a segment of the market if they provide the ideal payment solutions.

Below we have highlighted the main reasons why international merchants should offer better payment options to LATAM customers:

  • The Smartphone Opportunity –There is an increased use of smart phones in LATAM and this has resulted in an increased use of purchasing goods via mobile devices. This trend is increasing so providing secure mobile payment options taps into this market
  • Remove limitations – Not everyone in LATAM has a bank account. Your target market may wish to buy your products or services who may not currently hold a bank account, so if you offer a payment option for them this will gain new customers
  • Awareness – It will gain your business more awareness. By offering ideal payment options you are showing your target market that you are catering for consumers needs and care about what they want. You can also do a marketing/advertising campaign on the APM you are now providing for greater exposure
  • Sell more – You will be able to increase your sales. More payment options will likely gain more customers who prefer secure digital payment methods
  • Increase market share – If you provide better payments options, you’re likely to gain more customers and increase your market share
  • Improve your brand – As you accept payments from customers in LATAM you are gaining potential brand advocates for your business. If they have a positive experience, they are likely to spread the word online maybe via social media and this can lead to even more customers which again leads to more sales and revenue.
  • Faster transactions – If you offer a good payment solution where you (the merchant) get the funds faster and the customer receives the items/service faster this is a win-win situation for you and the customer. We live in a society where we want things now and we don’t want to wait so fast transactions are crucial
  • Security – An improved and secure payment option is more secure for the customer and more secure for the merchant. This reduces risk to both involved in the transaction.
  • Cashflow – Faster payments is also likely to lead to a better business cash flow.
  • Stay ahead – Don’t let the competition get ahead.

Payfuture is an expert in LATAM payments.

Contact us today to find out how we can help you to make the most of this business opportunity.

What does the future look like for cross border payments?

There has been a lot of change to cross-border payments over the last five years. New regulations in this sector and changes in compliance have had an impact. Fintech start-ups are offering new technology solutions to support the cross border payments sector and better payment processing options have all made a difference. This innovation is likely to continue. The demand for cross border payments is very high and currently steps are being taken to improve cross-border payments overall.

According to research by Mkinsey, ‘cross-border payments growth is particularly compelling in marketplace payments and the gig economy. Amazon is a driver of the marketplace and players like Etsy and Upwork are also growing strongly which is, ‘fuelling cross-border commerce and employment and driving C2B, B2C and business-to-small-business payments.’

Banks and other financial institutions need to be able to move money around efficiently, transparently, securely and in a cost-effective manner to keep up with the needs of the population who wish to send and receive money between borders

The covid19 pandemic has also had a significant effect on global cross border payments.Deloitte state, ‘we have certainty that covid19 will change the face of payments globally,agnostic of pandemic severity.’

This current pandemic has meant that the use of cash has been reduced across the globe.People are going out less, in particular where there are restrictions in place and digital payments are increasing. There has been an increase in online / mobile payments as a result of this. There is evidence to suggest that some people are purchasing things across the border for the first time ever and are also placing large orders with businesses abroad, including the purchasing of Covid19 masks and other personal protective equipment (PPE).

According to McKinsey, ‘the most striking and potentially lasting impact is an accelerating pace of change in this industry.’ There has been a huge shift in buying behaviour and more than ever people are purchasing online. The pandemic has accelerated the move from physical (going to a ATM machine or bank branch ) to digital (online virtual) banking. It’s also impacted the need for faster payments especially when you need items or a service urgently.

Some businesses may accept PayPal for smaller amounts, however if you’re transferring money in the thousands this may not be the most ideal solution. PayPal can also be costly in terms of fees. Banks can also be expensive, as some charge £25 to send money across the border per transaction, for example from the United Kingdom to India. Fees that are high can put people off from using their services.

One of the main challenges in cross border payments in both speed and security. Often when you want to transfer money to another country across the border it can take days to reach the recipient/ the receiver. Cross border payments have been traditionally known as often being slow and because people want to be able to transact and send and receive money faster, professionals in this sector have looked at improving payment options. This is innovating the industry.

Even today, if you’re using your main bank for cross border payments you may have to make a phone call and provide all the information which is time consuming and sometimes you may have to repeat this. This information then this goes through security checks and then the money might reach the recipient within the week. This is too slow. The need for speed is so crucial for cross border payments.

Swift is a payment method that is available 24/7 that most of us are familiar with, however as mentioned above, this usually requires manual entry of recipients information and involves intermediaries. It often takes too long and the fees are known to be expensive.There is an updated version of Swift Global Payment Innovation (Swift Gpi) which has improved the cross-border payments process. Banks such as Societe Generale have been using it in some form since 2017, although it became more popular in 2019. The main reason it was developed was to provide tracking, transparency and speed. Is also enables payments to be identified in real time, so if need be, they can be stopped and recalled midtransfer in cases of fraud. Payments are also promised within 24 hours, however, it is also costly and not affordable to all merchants.

This is also why fintech innovation is at a high in this sector, due to the demand and requirements of merchants and consumers.

As mentioned previously, to meet the needs of today and the future, payments need to be instant and much cheaper. There needs to be improvements to the speed of being able to send and receive money. This needs to also be in a secure way, without too many restrictions whilst being a simple process – it is what customers and merchants want.

It is also why a technology known as blockchain has also been used to transfer money and this is becoming more of a popular method. According to American Express (Amex),‘blockchain technology promises to facilitate fast, secure, low-cost international payment processing services (and other transactions) through the use of encrypted distributed ledgers that provide trusted real-time verification of transactions without the need for intermediaries such as correspondent banks and clearing houses.’ Blockchain technology was initially used to support the digital currency Bitcoin, but it is now being explored for a wide variety of applications that don’t involve bitcoin. According to Forbes, ‘cross-border payments supported by blockchain provide significant advantages to businesses and consumers. Blockchain-based payments are cost-effective, almost immediate, secure and transparent.’

Deloitte estimates that business-to-business and person-to-person payments with blockchain result in a 40% to 80% reduction in transaction costs and take an average of four to six seconds to finalise compared to two to three days using the standard transfer process.These statistics highlight why more businesses would choose this method.

Options for cross border payments include outsourcing your payments management to a 3rd party. Merchants can also collaborate with fintech partners. Merchants need a payment gateway. A payment gateway is a merchant service provided by an ecommerce application service provider that authorises credit card or direct payments processing for e-businesses and online retailers for example. The definition of a payment gateway is the technology that captures and transfers payment data from the customer to the acquirer and then transfers the payment acceptance or decline back to the customer. A payment gateway validates the customer’s card details securely, ensures the funds are available and enables merchants to get paid. It acts as an interface between a merchant’s website and its acquirer. It encrypts bank card details, ensuring that information is passed securely from the customer to the acquiring bank, via the merchant. Encryption is a type of security that is required. This security aims to protects credit and debit card details. Simply, a payment gateway works as the middleman between your customer and the merchant, ensuring the transaction is carried out securely and promptly which is very important. Payment gateways have a part to play in the future of cross border payments and a good payment gateways can also increase sale conversion rates.

Our PayFuture payment gateway connector offers access to various local payment options across emerging markets. Countries initially accessible through the gateway include Argentina, Bahrain, Bangladesh, Brazil, Columbia, India, Japan, Malaysia, Mexico, Nepal,Pakistan, Saudi Arabia, Bahrain, Qatar, UAE, Thailand and Vietnam.

It uses an artificial intelligence (AI) based connector and one API to allow the switch/connector gateway function. Access to local ecommerce payment methods is now crucial in emerging territories – especially those without developed retail or personal banking sectors.

There is also a link between payment methods and conversion rates. Conversion recovery solutions are useful for merchants who do not want to lose sales. This is a very valuable business tool that is gaining popularity. This is an important tool for the future of cross border payments. Payfuture offers a conversion recovery solution that works in real time to identify when a customer might abandon a sale. With transactions that are ultimately declined, the system offers users the option of trying a different payment option.

If merchants pick the right payment gateway provider and technology partner (like Payfuture), they will have a good range of tools and expertise available to them to optimise their eCommerce conversation rates, their sales and turnover.

Overall, the key things that are going to be a focus on cross border payments in the future include;

  • The growing role of SMEs in international business and the needs for SME’s access to affordable international payments will further disrupt this sector
  • Transparency on fees
  • An increase in Blockchain use
  • Tracking – itemising payments in a clear ‘simple to understand,’ way.
  • Speed – not waiting for payments to reach accounts. Fast for the customer and fast for the merchant/receiver.
  • An increase in cyber security in this space

The global payments landscape transformation for 2021 – The trends and the predictions.

Due to the covid19 pandemic this has increased demand for online payments.

Below we have listed 8 predictions and trends for the global payments landscape transformation in 2021;

  • There will be an increased use of digital biometrics for online security
  • Regulatory frameworks will come into play and be more fit for purpose
  • The ongoing trend is showing an increase in online payments that will continue globally
  • Cash transactions will continue to decrease globally
  • In emerging markets where some people still remain unbanked, they will make more use of mobile wallets
  • Countries with high revenue growth are also characterised by rapid electronic transaction growth – this is an ongoing trend
  • Digital marketplaces are expected to account for over 60 percent of digital commerce volume in the next few years.
  • Small and medium-size enterprises (SMEs) are contributing to a growing share of valueadded services in payments revenue.

According to other sources including research from Mckinsey, the other areas that may change the global payment landscape include:

An increase in ‘One stop shop,’ platforms

This is a trend that acquirers should look at. It is likely to be lucrative if acquirers can create SMEfocused one-stop-shop platforms.

A deeper look at the Infrastructure

Some infrastructure setups are not scalable and they are sometimes known to be burdening. There is a dramatic need for the software, data platforms and infrastructure to be an enabler to support merchants efficiently across borders, locations, verticals and devices.

Customer segmentation for commercial growth – Sales and marketing

Organising the business around segments based on how customers buy, what size they are and what business industry they are in, is useful to be able to compete effectively in a competitive market.Segmenting customers like this will also enable acquirers to invest appropriately in relevant sales and marketing campaigns. This is area that those in the finance sector will continue to look at.

The importance of data analytics and getting this right – Differentiating through data.

As we already know, the shift to digital has created a much greater demand for enhanced authorisation, fraud checks and faster underwriting decisions etc. Acquirers often have lots of data,however being able to find the data that they need is valuable. An unclear data strategy and poor data architecture would negatively impact the business and cause a lot of wasted time. These areas are things that need to be looked to improve the future of digital payments. This innovation is currently happening, and it will continue.

Complacency is a bad thing

This is a fast-changing industry and you need to stay ahead. The growth of APMs (alternative payment methods), with often evolving regulations, ongoing innovation and retailer interest, will necessitate their inclusion in acquirer portfolios. As APMs capture more transactions, acquirers may need to refine and adapt their current business models and processes. This may mean looking at their fraud processes, how they price things and how they are going to keep driving value that is future proof. Being able to adapt to the changing demands and trends is important.

Customer experience improvements

As the number of devices, payment options and channels increase, acquirers will need to continue to provide a valuable customer journey experience that caters for their needs.

Supply chain finance

According to Mkinsey research, they state that, ‘significant value in the global supply-chain finance (SCF) market remains untapped. Almost 80 percent of eligible assets do not benefit from better working-capital financing. We now see change accelerating in the market in response to a convergence of factors: an increased focus on working capital, structural changes in financing for small and medium-size enterprises (SMEs), a step change in digital adoption and the potential geographic relocation of $2.9 trillion to $4.6 trillion in spending on cross-border supply chains (for 16 to 26 percent of global goods exports) over the next five years.’

The impact of the pandemic on the future of Digital payments in emerging markets in 2020 and beyond

The COVID-19 crisis is having a significant and widespread effect on global payments across sectors.

As people have remained home and often isolated during the pandemic in 2020, many people have resorted to purchasing what they need online. This includes buying groceries online, buying toiletries online and paying your bills online for example.

The pandemic has significantly accelerated the shift towards digital payments. The International Monetary Fund did some research into the impact of the pandemic and they pointed out that,“digital financial services allow for social distancing,” and we know social distancing is important during the pandemic to reduce the spread of the virus. Also, during the pandemic, in April 2020 the World Health Organisation recommended the use of contactless payments (instead of going out and using cash) to slow the spread of the virus.

Research shows that even before the covid19 pandemic, the use of contactless payments was already increasing in parts of the world, however, this is increasing more rapidly now because of the impact of covid19 on our lives and the need to adapt. Mastercard highlighted that three-quarters of its transactions in Europe are now contactless.

Mobile payments have also increased. In the US, 56 percent of retailers are now accepting e-wallet payments, compared with 44 percent before the pandemic.

There has also been a reduced use of cash across the globe including in the emerging markets. As shown below, Mckinsey has highlighted how covid19 will see a decline in cash usage.

Furthermore, Covid19 underlines the importance of fintech in emerging markets. According to the World Economic Forum on this topic;

  • Financial inclusion in developing markets has become even more important during the pandemic
  • Mobile solutions are proving to be a lifeline in emerging economies
  • Fintech firms can use this opportunity to build their reputations and emerge stronger once the crisis has passed
  • Technology is critical. The technology also needs to be secure and compliant

To summarise, the pandemic has accelerated the move from physical to virtual banking.Furthermore, in several countries including in Mexico, some Fintech initiatives were launched to alleviate liquidity problems of entrepreneurs during the covid pandemic. There are reports from China that suggest that blockchain technology and other industry / technology advances like Big Data, 5G and AI (Artificial intelligence) have helped speed up business recovery and have played a part in efforts to control the spread of the virus and to develop a COVID-19 vaccine. Payments and Fintech innovation is being seen, to support not only individuals, but also businesses.

The future potential – more specifically in the emerging markets

The pandemic has highlighted the risks and restrictions inherent in analogue payments systems and the value and benefits of moving over to other digital options for banking and making payments. The pandemic meant that more small businesses are becoming digital and changing how their business sends and receives payments – this according to survey research has also led to higher levels of customer satisfaction

Although the emerging markets have some challenges there is huge potential for the payments sector in emerging markets. To summarise;

  • The shift to electronic transactions has placed front and center the need for merchant acquiring businesses to update and differentiate their service offerings
  • Regulators are going to play an active role in this growth
  • There will be new channels available and a new products space in this sector
  • Disruptive technologies and developments will see huge growth potential
  • The impact of covid19 on technology advances and the desire for cashless payments will enhance this sector.
  • Fintech initiatives are being developed to support SME finance in the context of the covid19 crisis – fintech is being seen as a recovery and economic survival and growth tool.

To conclude, there is evidence that digital payments is an accelerating trend and the momentum towards a cashless society has increased. There will be more demand for fintech solutions.

Emerging Markets Driving the payments transformation

According to a report by PwC over the next 10 years and beyond we are set to see even faster changes in the payment landscape and the emerging markets will be at the forefront of this payments transformation.

Their research suggests that by 2030 payments will be more than just about the movement of funds. They highlight in their report that payment service providers (psps) will, ‘develop enhanced value propositions based on individual accessibility coupled with customer convenience and changing lifestyles, whilst ensuring adequate levels of security and risk mitigation.’

Before covid19, the shift had already begun mainly by non-traditional players, the emergence of new solutions and the development of strategic partnerships and collaborations. The research mentions that the young ‘tech-savvy’ populations of the emerging markets will help to lead the shift in payments expectations among retail and commercial consumers.

The drive for innovation will also accelerate development in areas such as blockchain technology, which aims to simplify international remittances and reduce transaction times by more than half.

In the research paper by PwC, they examine the current state of the payments industry across the emerging markets and they identify key drivers and developments already underway and determined what is required to realise the market potential between now and 2030. A key focus of the paper is the steps being taken by merchants, customers, payment companies, regulators and payment solution providers, towards creating a successful electronic payments infrastructure.

In the first part of their report titled, ‘setting the pace,’ they mentioned something called macro drivers for emerging markets where they discuss digital expectations and governments desire to boost financial inclusion and reduce the use of cash transactions, which aims to fuel rapid growth in electronic payments. This will bring a new breed of mobile and fintech innovations into the payment market.

Customer expectations in these emerging markets are also going to drive a significant change in the payments industry in these countries.

The emerging markets are home to 85% of the global population and India and China’s people represent more than 1/3 of the world’s population. People want to be able to buy things online fast with ease and no restrictions or major concerns for security.

In India most online transactions, around 75% of them are from people under the age of 30. This implies that it is the under 30s that are going to stimulate economic growth. It is a similar trend with Indonesia, as the stats show that those age between 15 and 34 years old are likely to be the ones transacting online the most. These trends are also apparent and similar in Brazil, Philippines, Malaysia, Turkey and South Africa.

It’s also worth noting that the younger age group specifically those aged 15 to 34 have a strong appetite for new technology. We know them as the tech savvy generation that have helped transform the digital economy. In terms of payment innovation, the report suggests that over the next several years a tipping point will be reached and consumption will be an all-time high. This age group will be the key drivers of growth in electronic payments in emerging markets. The other drivers of growth in this sector according to this report includes rapid urbanisation and an increase in literacy and education levels. They further explain in their report that is the tech savvy generation that has transformed digital solutions from being a convenience to an essential part of how they transact.

According this research, the statistics in this report state that 2 billion adults worldwide are un-banked. Traditionally banks have been the primary means for accessing financial services but now it’s more about how to deliver affordable and accessible financial services which may be more digital because of the need and demand.

‘To meet the need for financial inclusion, there has been a rapid expansion of new technologies and innovations, which are helping to make it more economically viable for banks to reach the ‘unbanked or ‘underbanked’ populations.’ Technology has leapfrogged from branch banking to ebanking (electronic banking) and now mobile money. Several governments are making financial inclusion an integral part of their national plans.

The Indian government, for example, launched the ‘Aadhaar’ card programme. The ‘Aadhaar,’ programme exists to provide a 12 digit individual identification number issued by the Unique Identification Authority of India on behalf of the Government. The reason for this is so that it enables online and cost effective identification for India’s citizens.

In Mexico, there have been concerns about the costs of using credit facilities and the lack of competition in the banking sector has led to financial reforms aimed at improving regulations and lowering the cost of borrowing.

Pwc state that, ‘regulators in emerging markets are now waking up to the huge costs, risks and inefficiencies that come with cash transactions. They recognise that economic growth is directly proportional to the increase in usage of electronic payment methods, as it acts as a tool to combat fraud and ‘black’ money (income illegally obtained or not declared for tax purposes) and also promotes access to formal credit and savings instruments thereby driving GDP growth.’ Because of his measures are being taken to build a sustainable electronic payments ecosystem. We also know that covid19 has further pushed the need for digital, cashless payments.

Although a full service banking is the dominant and often most preferred banking model in the world, regulators in markets like Singapore, Hong Kong (China), India and Indonesia have introduced a differentiated banking licence for both bank and non-bank players aimed at furthering financial inclusion.

They also state in their report about fintech innovation and how it promotes inclusion. Funding for financial tech start-ups more than doubled in 2015. Using innovative fintech is a key enabler and regulators are encouraging fintech firms to make financial services more secure and convenient for the customers.

According to their report one of the questions they asked was, ‘which part of the financial sector is likely to be the most disrupted by fintech over the next five years?’ and the top four were;

Consumer banking
Fund transfer payments
Investment and wealth management
Small and medium enterprise banking.
This report also mentioned information relating to improving ‘acceptance infrastructure,’ which is about how to accept more electronic payments depending on the infrastructure available such as ATM machines or terminals. Governments in emerging markets are promoting developments in a card acceptance infrastructure and therefore increasing debit and credit card usage in emerging markets. It is also worth noting that branch and ATM growth rates have fallen in countries like China, India, Indonesia, Malaysia, Thailand, Philippines and Taiwan, again highlighting that the use of online payments is a growing trend.

Point of sale transactions also known as POS transactions have also seen an increase in the emerging markets sector due to the rapid adoption of point of sale terminals by SMEs and smaller merchants in these areas, however more needs to be done on the reach at the moment as SMEs in emerging markets as not all SMEs have high investment capital and so they are somewhat restricted in the way they can accept payments from customers. Because of this some businesses in emerging markets only accept cash payments, so by having mobile point of sale platforms this opens up a better more affordable channel for them to accept non-cash payments from cards and mobile point of sale systems. Being able to accept payments via a mobile device is often more convenient for customers and this require less upfront costs for merchants/businesses. Many merchants are seeking to replace the traditional fixed payment terminals and are now using mobile point of sale devices.

Because there has been a rise in rapid development of new payment concepts and mobile infrastructures this has also enabled a rise in e-commerce businesses, specifically in Asia Pacific countries. According to this report emerging markets are now driving the ongoing global acceleration of e-commerce spending. One of the major drivers of this has been from smartphones, tablets and Internet and mobile access, as they have cash free and card free financial transaction opportunities.

Technology users – The younger generation
Also, the millennial’s comfort with technology is driving businesses to provide new and more innovative ways of enabling transactions reflecting the demands of this tech savvy generation.

It is also apparent in this report that 50% of consumers in the age group of 18 to 24 years old are more likely to try new technology enabled payment tools whether this is renting films online, subscribing to watch football matches online, purchasing food, or renting a car using digital means, a lot of customer behaviour is being driven by experiences and innovations created outside financial services including things like accessibility where customers want it now and they don’t want to wait.

There are also alternative payment systems such as mobile wallets where some people in India and China have gone from having no bank history to being able to make payments via a mobile phone.

In their report they mention a term called ‘leapfrogging,’ where they discussed leapfrogging in technological developments. They mention emerging markets are spearheading some of the key developments in payments and they set out some of the technological advances and solutions that could change the face of payments if they can be scalable, resource efficient and sustainable.

Social media payments
The main one they mention is social payments which is about making payments through social media. They further explain that people under the age of 25, account for 40% of the population of Asia which is in the emerging markets sector. To make the most of the growing social media phenomenon social networking sites are needing to facilitate financial transactions by introducing alternative payment systems. Because of social media customers can easily make purchases online and they now have a more customised banking experience where there is a shift from bank to non-bank transaction providers.

Emerging Market areas
China focus
In 2015 the total value of mobile payments reached an increase of 445% than the previous year. smaller cities in China that are underserved by local banks are prime targets of major non-bank players and they are planning to offer more online mobile payment options the regulations are shaping the competitive landscape.

Brazil focus
About 40% of adults hold a bank issued debit card in 2015. This is a growth from the previous years. There has also been a growth in credit card usage and transactions.Banks in Brazil have also been promoting payment digitisation. They have launched local payment schemes and investments to try and increase point of sale penetration. Furthermore, the government in Brazil have also been trying to promote epayments by providing incentives like tax benefits.

Mexico focus
Mexico is known as a market dominated by local payment methods. Credit cards are the leading mode of payments for online purchases, with debit cards only accounting for 15% of e-commerce purchases. Mexico are still using cheques, however this is decreasing which is a good sign. New regulations have been introduced to try and increase and promote electronic payments especially as most transactions have been cash based.

India focus
Regulators in India are among the first in the emerging markets to promote financial inclusion initiatives. The government are also providing grants. India’s payment industry stand outs and definitely has an above average growth in non-cash payments. There has been a strong adoption of electronic payments in India and there has been a rise of new market entrants. Mobile banking transactions tripled between 2012 and 2014. Mobile wallet transactions have also seen a huge increase.

South Africa focus
South Africa’s payment ecosystem is growing and they are working on easier access to payment solutions to poor and remote communities. There is a huge market for remittance platforms in South Africa.

Nigeria focus
The rapid adoption of innovative technology has led to payments systems in Nigeria making progress in increasing financial access and reducing the cost of transactions.With a limited credit culture in Nigeria, the most common payment card is the debit card followed by pre-paid cards. Although these cards are predominantly used for ATM withdrawals, POS transactions and online banking are growing rapidly. Also as 60% of Nigeria’s ATMs are located in just one region of the country and as many people use cash there and they can’t always get access to a cash machine (ATM), this has paved the way for mobile banking to be an immediate success in Nigeria

Usage of innovative payment options like wallets, mobile payments and one click payments In Nigeria, meant that usage of mobile-based payment systems has increased due to the wide access to mobile phones as a payment option.

The role of national regulators and industry associations
A key regulatory aim is building security and trust in the payments system by understanding, monitoring and protecting the rights of retail and commercial customers.

With the development of electronic payments and cashless transactions, frameworks, policies and guidelines need to be developed. Most emerging markets have also introduced a common set of legally enforced regulations.

Covid-19 impact on the payments sector in emerging markets
The covid19 crisis is having a significant and widespread effect on global payments across sectors. According to McKinsey, the most striking and potentially lasting impact is an accelerating pace of change in the industry. With the Covid19 pandemic this has further meant that the use of cash has been reduced across the globe including in emerging markets.

There has been a huge shift in buying behaviour and more than ever people are purchasing online. Mckinsey highlighted how covid19 will see a decline in cash usage. Furthermore, covid19 underlines the importance of fintech in emerging markets. According to the World Economic Forum on this topic they mention that,‘financial inclusion in developing markets has become even more important during the pandemic,’ and that ‘fintech firms can use this opportunity to build their reputations and merge stronger once the crisis has passed.’ Mobile solutions in the emerging markets are also proving to be a lifeline in emerging economies and this is further highlighting the importance of having secure, and good technology in place.

Overall, the pandemic has accelerated the move from physical to virtual banking.There is huge potential for the payments sector in emerging markets. The shift to electronic transactions has placed a big need for merchant acquiring companies to update and differentiate their service offerings. Furthermore, the impact of covid19 on technology advances and the desire for cashless payments will enhance this sector and disruptive technologies and developments will see huge growth potential.

Mckinsey | PwC | Emerging market payments | Emerging markets payment innovation | Who is driving payments innovation?