Emerging Markets Are Winning the Payments Revolution

In emerging markets, online marketplaces are accelerating rapidly, with new social apps spreading virally. While these serve as the primary touchpoints of the customer experience, the true catalyst for digital transformation lies in the digital payments revolution. Whereas developed economies layered digital transactions onto legacy banking structures, emerging markets engineered low-cost, mobile-first, real-time payment systems from the ground up. This leapfrogging has not only accelerated e-commerce adoption, but also redefined financial services, entrepreneurship opportunities, and national economic resilience. Digital payments are no longer a convenience; they are the critical infrastructure shaping the next era of global commerce.

Growth in markets such as India, Brazil, and Kenya has been fueled by building financial inclusion frameworks designed for their own contexts rather than by adopting developed-world models.

India’s UPI: A public enabler

India’s Unified Payments Interface (UPI), launched in 2016, is one of the most ambitious and successful digital payment experiments globally. Designed as a public, interoperable platform, UPI allows users to transfer money instantly between bank accounts via mobile phones with no fees for individuals and minimal friction.

UPI now accounts for more than 75 percent of India’s retail digital payment transactions by volume. Transaction costs have plummeted, enabling rural and semi-urban populations to transact digitally without needing traditional banking infrastructure. Marketplaces from Flipkart to local Kirana stores have benefited, with small and medium-size enterprises finally able to access broad digital consumer bases.

UPI serves as a critical success factor, showcasing that when governments invest in open digital public goods, private-sector innovation can flourish. Firms such as Paytm, Google Pay India, and PhonePe have built thriving businesses on top of UPI’s foundations, demonstrating a powerful model where the public sector has enabled competition rather than exhausting its potential.

Brazil’s Pix: Instant and inclusive

While India was scaling UPI, Brazil launched Pix in 2020, another success story in digital payment infrastructure. Developed by the Central Bank of Brazil, Pix enables real-time money transfers 24/7. It’s free for individuals, and it’s accessible without a formal banking relationship.

In three years, Pix reached over 140 million users, accounting for more than 65 percent of Brazil’s population. Pix has become so prevalent that it is now the default method of payment for daily purchases, from street vendors to e-commerce platforms. By driving down payment costs and eliminating settlement delays, Pix has enabled thousands of small businesses and informal sellers to participate in digital commerce.

Kenya’s M-Pesa: Mobile money at scale

Kenya offers one of the earliest and most transformative examples of mobile-first financial innovation. In 2007, Safaricom launched M-Pesa, a simple mobile money service allowing users to send and receive funds via SMS without requiring a traditional bank account. At the time, fewer than 30 percent of Kenyan adults had access to formal banking services, leaving the vast majority reliant on informal cash transactions.

Today, over 96 percent of Kenyan households use M-Pesa to manage daily financial needs, from peer-to-peer payments to small-business transactions and cross-border remittances. M-Pesa unlocked economic participation for millions previously excluded from the formal economy. It enabled rural households to access savings products, it enabled urban entrepreneurs to scale microbusinesses, it enabled families to send remittances securely across long distances.

The Kenyan experience illustrates a core principle for emerging markets: Financial innovation succeeds when it addresses structural gaps such as limited banking infrastructure through solutions that are simple, mobile-native, and deeply attuned to local economic realities. M-Pesa’s success inspired a wave of similar models across Africa and Asia, demonstrating that mobile financial services can be both commercially viable and socially transformative.

From payments to ecosystems: The next frontier

The impact of digital payments in emerging markets extends far beyond the facilitation of transactions. Increasingly, payment platforms are serving as foundational infrastructure for broader digital financial ecosystems. In India, for example, UPI has evolved beyond simple money transfers; transaction histories are now leveraged through the emerging Account Aggregator framework to underwrite instant microloans, expanding credit access to individuals and small businesses previously excluded from formal lending channels. Similarly, fintech innovators are integrating micro-insurance products directly into payment applications, allowing users to seamlessly purchase affordable coverage through small, incremental payments. In Brazil and India, digital wallets are rapidly transforming into comprehensive financial hubs, offering investment opportunities, savings accounts, and retirement planning tools.

This ecosystem expansion reflects a deeper evolution: Emerging economies are not merely adapting existing financial technologies; they are using digital innovation to reimagine inclusive economic participation and create entirely new models of it. Payments, once viewed as the conclusion of a commercial transaction, are increasingly becoming the gateway to a full suite of financial services.

The future: Rethinking global innovation leadership

For decades, the narrative was that emerging markets needed to catch up to the developed world. But in digital payments, it is increasingly the West that may be lagging. Mobile-first economies are not constrained by legacy systems; instead, they are defining the future of financial innovation.

The next decade of global commerce will not be defined by legacy models of card networks and bank branches, but by open, mobile, and inclusive infrastructures pioneered in India, Brazil, Kenya, and beyond. Crises and constraints have often served as catalysts for innovation in emerging markets, and in the realm of digital payments, that spirit is now reshaping the global financial landscape. The future of money is no longer being imagined in traditional financial centers; it is being built, tested, and scaled across the Global South. As emerging markets continue to redefine the rules of engagement, their innovations are poised not only to transform their own economies, but to set the standard for the world.

About the author

Kimberly Grey, a 2025 graduate of the Executive MBA Metro NY program in the Samuel Curtis Johnson Graduate School of Management, was an Emerging Markets Institute Fellow. She has experience in digital commerce, product strategy, and cross-border retail with a focus on scaling customer-centric platforms globally. As an Emerging Markets Institute Fellow, she explored how technology can unlock inclusive economic growth across emerging economies.

All views expressed in articles published on the Emerging Markets Institute webpage are those of the author(s) and should not be taken as reflecting the views of the Emerging Markets Institute.