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Driving Success in Emerging Markets

October 29, 2020


Technology companies, and the consumer digital ecosystems that they power, are at the heart of a digital transformation that has been accelerated by the pandemic. Six of the top seven largest companies in the world are technology companies that have built digital ecosystems[1] that bring together multiple industries into a network of networks. For example, Amazon started life in e-Commerce, but now brings together logistics, cloud computing and consumer electronics into a single platform. The continued rise of the consumer tech sector is particularly apparent in emerging markets, which are often adopting digital technologies and business models aimed at these growing populations most quickly. India had over 636 billion internet subscribers in 2019[2], more than double the 2015 figure, and second only to China. In China, the digital economy is already worth 30% of its GDP[3]. In Africa, although foreign direct investment (FDI) remains relatively small by global standards, 34% of FDI projects in 2018 were in the technology, media and telecoms industries.[4]

Given the scale of opportunity, it’s not surprising that in a recent study commissioned by Standard Chartered, 23% of respondents from the technology sector ranked Asia as their top growth target, and 39% in their top two. Africa and the Middle East are also firmly on their radar. As innovative technology companies expand quickly in emerging markets, focusing on three key areas can be essential to driving success:

Payments and collections

Supporting new and emerging payment methods that offer a seamless, dynamic and real-time user experience is essential. However, there can be enormous differences between countries and regions, both in the methods available, and the purchasing and payments culture, as Uber’s experience demonstrates across the 60 countries in which it does business[5]. In Asia, India’s UPI platform has proved transformational, with digital payments increasing from 6.8 billion in 2016 to 28.5 billion in 2019. Over 100 billion mobile payments were processed in China in 2019, an increase of 25% over 2018[6]. In Africa, the use of M-PESA in Kenya, Uganda and Tanzania has transformed the payments culture over the past decade, with West Africa now following quickly. There were 50 million new mobile money accounts set up in Africa in 2019, a 12% increase over 2018, bringing the total to 469 million users[7]. The Middle East has been slower to modernize its payments systems, but this is changing. In UAE for example, the rapid rise of eCommerce is encouraging greater use of cards (29% in 2019) and mobile wallets (19%)[8]. Instant payment schemes are also becoming prevalent, such as in Bahrain, Saudi Arabia and UAE.

Connectivity and integration

While offering choice and convenience to customers is important commercially, treasurers do not want to compromise the efficiency, consistency or centralization of their payments and collections functions. Some of the solutions that have emerged strongly to address this include:

  • Payment aggregator bank portals help treasurers to integrate multiple collection methods, including low value/high value, instant payments and mobile wallets through a single channel. These portals can be linked directly into corporate e-commerce applications or mobile payment schemes (including QR codes) for seamless and integrated digital collections.
  • Open APIs allow banks and their clients to connect and integrate payment and collection services dynamically and in real-time. This includes dynamic updates of TMS and ERP systems, but also, embedding payment and collection services directly into their business systems. These are major factors in enhancing the customer experience by creating a seamless in-app experience, and enabling interconnected ecosystems, as Google illustrates with the rollout of Google Pay in India[9].

Regulatory advice

Given the differences in payment methods, cultures and regulations, Treasurers need access to reliable and practical information. This is often particularly important for technology companies bearing in mind the pace of growth, their innovation agenda and the importance of customer experience in the differentiation and competitiveness of their offering. 52% of technology respondents to the recent Standard Chartered study said that understanding regional regulatory requirements was their no.1 growth challenge, compared with 32% of respondents overall.  

Treasurers play a critical role in driving the efficient digital ecosystems and business models of the future, by enhancing the customer experience through convenient, secure payments and collections, supporting real-time processes, ensuring access to liquidity to support expansion, and managing risk. Expanding into emerging markets that are increasingly  ‘leapfrogging’ their western peers, brings some additional challenges, given the diversity in currencies, regulations, payment methods and cultures. The opportunities often outweigh these challenges, however, offering many tech companies comparable, or greater opportunities for growth than established markets.

[8] Ibid, Worldpay