By Manpreet Haer, Co-Founder at PayFuture

The acceleration towards digitisation caused by the pandemic has drastically boosted online shopping and online trade in general. Social restrictions and lockdowns have effectively bolstered the already-growing e-commerce industry into what it has become today. As a result, however,  this has led to established markets becoming saturated therefore pushing merchants to seek new opportunities in emerging markets.

Situated in countries within the developing world, often with high populations, emerging markets are where the economy has tremendous potential for progression. Areas of the world such as the Indian Subcontinent, Africa, Southeast Asia and Latin America are considered emerging markets – presenting avenues for western merchants to diversify their reach and make the most of opportunities with overseas business. 

A recurring characteristic of emerging markets is that they are often in the midst of a huge digital boom. For example; India has an internet user base of over 636 million but e-commerce has yet to take off in the same way it has in the US and European countries. However, with more and more of India’s population using cashless payments due to Covid-19 and 80% of Indian adults having at least one digital financial account, it’s only a matter of time before its industry starts booming too. Coupled with the continued advancement of mobile payment technologies, such as digital wallets and contactless payments, it’s easy to understand why India is being lauded for its untapped potential for e-commerce merchants. In fact, PWC’s report on emerging markets states that the payments business in these regions are not only vast but will continue to expand between now and 2030.

Getting access to these emerging markets does however bring about certain challenges. Emerging markets can be complicated, bureaucratic and unpredictable, making it difficult for merchants seeking to set up shop in these regions. Firstly, merchants need to make sure they are adapting their payment processes and solutions to that of the chosen market – a complex process if one doesn’t know when to start and how to deal with the legalities. With different markets having different payment methods native to their country, merchants will need a bespoke approach for each region. Accomplishing this will require merchants to pay attention to the regulatory landscape and consumer behaviours within their respective chosen markets. This newfound insight would then need to be taken into consideration when adapting the payment solution.

For companies that don’t have the resources, experience or knowledge, dealing with the various intricacies that surround payments in emerging markets may feel highly risky and even impossible considering the multitude of hurdles to jump over. On top of that, there will be a need for “someone on the ground” in that country and finding reliable local partners to work with requires a deep understanding of the political and regulatory environment, company etiquette and local culture. Satisfying these requirements often prove too difficult for western merchants, consequently deterring them from accessing these potential growth areas. 

Given the complexities facing merchants aiming to penetrate these emerging markets, we decided that there needed to be a bridge for merchants to access them. To become this bridge, we took the initiative to form strategic, symbiotic partnerships with local payment service providers to provide that crucial access to merchants without them needing to do so much of the heavy lifting. Furthermore, to fortify our commitment, we decided to take a stake in these businesses once relationships matured, ensuring end-to-end control of the process. This in turn enables us to have the resources, facilities and intelligence needed to safely and efficiently guide our merchant clients into these emerging markets. 

The industry has indubitably changed in the last few years and opened everyone’s eyes to the possibilities that lie within emerging markets. To make the most of these opportunities before they become mainstream and saturated, merchants need to reach out to those with the expertise, resources and analytics to help them unlock the potential of emerging markets in driving real business growth. Failure to do so or entering emerging markets without a sound understanding of the region’s subtleties, risks being eclipsed by more forward-thinking businesses who made the effort to seek out expert guidance.