Payment innovations driving digital transformation in emerging markets

The digital transformation journey is accelerating across the globe, good with emerging markets playing a critical role in shaping the future of digital economies. As digital adoption expands, one of the most crucial elements propelling this transformation is innovation in payment systems. In regions with historically limited access to formal financial infrastructure, modern payment technologies are revolutionising the way individuals and businesses interact with the digital economy.

From mobile payments to blockchain technology, these innovations are closing gaps in financial inclusion, reducing the cost of transactions, and promoting economic growth. In particular, the rise of fintech solutions is helping emerging markets leapfrog traditional banking systems, allowing millions of people access to financial services they could only dream of a few years ago. Payments are no longer a back-end process but a key enabler of growth, especially in regions where access to traditional banking systems has been sparse.

This article explores the key payment innovations driving digital transformation in emerging markets, the challenges they face, and how companies like Corytech are enabling this shift through their advanced payment orchestration platforms.

Key payment innovations shaping emerging markets

Mobile payments

Mobile payments have revolutionised the financial landscape in many emerging markets. These regions often have low banking penetration rates, making it difficult for individuals to access traditional financial services. However, the proliferation of mobile phones has enabled the growth of mobile wallets and peer-to-peer (P2P) transfer services.

For example, in Sub-Saharan Africa, over 45 per cent of the adult population used mobile money in 2023, according to the World Bank. The success of platforms like M-Pesa in Kenya, which has 51 million active users globally, underscores the potential of mobile payments to enhance financial inclusion. These mobile solutions enable users to transfer money, pay bills, and access savings and credit services, all through their phones.

In India, the Unified Payments Interface (UPI) saw over nine billion transactions in 2023, with monthly transaction values exceeding €171 billion ($180 billion). UPI’s success has spurred rapid digital transformation, particularly in rural areas where access to formal banking was previously limited.

Cryptocurrencies and blockchain

Cryptocurrencies and blockchain technology are gaining momentum in emerging markets as alternatives to traditional financial systems. Many countries in Latin America and Africa have embraced cryptocurrencies as hedges against local currency volatility. In 2023, Chainalysis reported that emerging markets represented six of the top 10 countries in terms of crypto adoption, with countries like Nigeria and Vietnam leading the way.

In addition to offering protection from inflation, cryptocurrencies are used for cross-border payments, eliminating the need for costly intermediaries. Blockchain, the underlying technology behind cryptocurrencies, also presents an opportunity for secure, transparent, and efficient financial transactions, particularly in regions where trust in financial institutions is low.

Payment orchestration platforms

Payment orchestration platforms are another critical innovation shaping digital transformation in emerging markets. Companies like Corytech offer payment orchestration platforms that facilitate connections to multiple payment service providers, enabling businesses to access various payment methods through a single integration, thus payment orchestration platforms that facilitate connections to multiple payment service providers, making cross-border transactions smoother, faster, and more affordable. This is essential for businesses operating in regions with diverse financial ecosystems, where users might rely on different payment methods, ranging from mobile wallets to traditional banking.

Corytech’s payment orchestration technology provides a seamless experience for both consumers and businesses by supporting various currencies, payment methods, and regulatory compliance across different regions. As a result, it opens doors for eCommerce growth and digital business expansion in emerging markets.

How payment innovations are driving digital transformation

Financial inclusion

Payment innovations have a profound impact on financial inclusion, particularly in regions where many remain unbanked. The World Bank estimates that as of 2021, around 1.4 billion adults globally were unbanked, with the majority residing in emerging markets.

Mobile wallets and P2P transfers have significantly lowered the barriers to accessing financial services. In East Africa, where traditional banks are often inaccessible, mobile money platforms like M-Pesa have brought millions into the formal financial system. Similarly, in Southeast Asia, where 290 million people are unbanked, fintech companies like GCash and GrabPay are playing pivotal roles in providing easy-to-use payment solutions.

Enhancing eCommerce growth

The rise of innovative payment solutions is fueling the growth of eCommerce in emerging markets. For instance, in regions like Latin America and Southeast Asia, mobile and digital payments have been key drivers of online shopping adoption. Statista reported that Latin America’s eCommerce market grew by 22 per cent in 2022, with digital payments playing a central role in this expansion.

By offering simplified payment options, businesses are able to tap into previously underserved markets. Payment orchestration platforms, such as those provided by Corytech, enable eCommerce merchants to support multiple payment methods and currencies, making it easier for customers to purchase products online. This has created new opportunities for local businesses to expand globally.

Reducing transaction costs

Cross-border payments have historically been costly and slow, especially for emerging market economies. However, fintech innovations like payment orchestration and blockchain technology are drastically reducing these costs. The World Bank’s 2022 report showed that the average cost of remittances globally stood at around six per cent, but with the adoption of digital and mobile payment solutions, these fees can drop to as low as three per cent or less.

This reduction in transaction costs has a direct impact on the competitiveness of businesses in emerging markets. For instance, in Latin America, digital payment solutions have facilitated cross-border eCommerce, helping small and medium-sized enterprises (SMEs) grow by reaching international customers without facing excessive fees.

Challenges in implementing payment innovations in emerging markets

Regulatory barriers

One of the primary challenges to implementing payment innovations in emerging markets is navigating complex and often fragmented regulatory frameworks. Countries have differing regulations regarding payment processing, digital wallets, and cryptocurrencies. For example, while Kenya has been a pioneer in mobile money, Nigeria initially imposed restrictions on mobile money licenses, slowing adoption.

Businesses must work closely with regulators to ensure compliance, but this can often slow the rollout of new payment solutions. Additionally, the lack of harmonised regulations across regions adds another layer of complexity for cross-border transactions.

Infrastructure limitations

Implementing advanced payment systems in regions with limited digital and financial infrastructure presents technical challenges. Many emerging markets lack stable internet connectivity, which is essential for digital transactions. Additionally, poor telecommunications infrastructure can hamper the adoption of mobile payments in rural areas.

For example, although mobile money is widely used in East Africa, rural parts of the region still struggle with poor network coverage. This limits the potential reach of digital payment systems in the areas that could benefit the most from financial inclusion.

Trust and security

Building trust in new payment methods is crucial, particularly in cash-driven societies. In many emerging markets, consumers are wary of using digital payments due to concerns about fraud, security, and privacy. This highlights the importance of strong security measures to encourage adoption.

For instance, in regions like India and Nigeria, cash remains the dominant payment method despite the growing availability of digital alternatives. Businesses must focus on educating consumers and investing in secure payment infrastructure to overcome these challenges.

Corytech’s role in enabling payment innovation in emerging markets

Leading payment orchestration provider

Corytech is at the forefront of payment orchestration technology, offering innovative solutions tailored specifically to the needs of emerging markets. By facilitating connections to multiple payment service providers through a single platform, Corytech enables businesses to offer various payment options, simplifying cross-border transactions and supporting local currencies and popular payment methods in various regions.

Their platform enables businesses to overcome challenges related to regulatory compliance and infrastructure limitations by providing secure, scalable solutions. This helps businesses streamline their operations and provides customers with a seamless payment experience, enhancing trust and engagement.

Scalable and secure solutions

Corytech’s payment orchestration platform is designed to scale with businesses, providing the flexibility to support both local and international transactions. Security is a top priority, with advanced fraud detection, encryption, and compliance features built into the platform to ensure that customers can trust the system.

By enabling businesses to accept payments through mobile wallets, digital currencies, and traditional banking, Corytech’s solution promotes financial inclusion and the growth of eCommerce in emerging markets.

Future outlook: What’s next for payments in emerging markets

Continued mobile and crypto adoption

The growth of mobile payments and cryptocurrencies is expected to continue at a rapid pace in emerging markets. As mobile penetration increases and cryptocurrencies become more mainstream, these technologies will play an even greater role in enabling digital transactions. By 2027, the mobile payments market in Africa is expected to reach €2.6 trillion ($2.8 trillion), demonstrating the vast potential for future growth.

AI and automation

Artificial intelligence (AI) will also play an increasingly important role in payment systems, particularly in regions with fragmented regulatory systems. AI can be used to automate fraud detection, ensure compliance with local regulations, and improve transaction efficiency. This will further streamline payment processes, helping businesses scale faster while maintaining security.

Corytech’s vision

Corytech envisions a future where payment orchestration platforms are at the heart of digital–transformation in emerging markets. By leveraging the latest technologies and providing scalable, secure solutions, Corytech aims to drive the adoption of digital payments and support businesses in reaching new heights.

Conclusion: Payment innovation as a catalyst for growth in emerging markets

Payment innovations are proving to be key drivers of digital transformation in emerging markets, providing new opportunities for businesses and consumers alike. Mobile payments, cryptocurrencies, and payment orchestration platforms like Corytech are creating more inclusive financial systems, reducing transaction costs, and fostering eCommerce growth.

As these markets continue to evolve, businesses must be ready to embrace new payment technologies. Corytech’s payment orchestration platform offers a powerful solution for companies looking to optimise their operations and expand into emerging markets, enabling them to thrive in the digital age.