INSIGHTS - BLOG

Stretching the elastic in emerging markets

08 February, 2018
Brett Duley, Head of Banking Relationships and Partner Management
Brett DuleyHead of Banking Relationships and Partner Management

Today’s business environment demands that you look beyond your local, and even regional, market and gain a truly global perspective. With the world so interconnected and the concept of globalisation in full swing, it’s vital that you have a view on how you can adapt your offering for clients from all corners of the world.

Emerging markets have become even more important since the global financial crisis of 2008, in fact we’ve seen some of the so-called developing nations shift into the mainstream. Moreover, as India and China, to name but two countries, see their middle class grow and increasing numbers of young, ambitious people want to flex their spending power, not just at home, but abroad, these economies are now contributing in a significant way to the global picture.

Emerging markets are vital for Earthport. We’ve long looked beyond the major economies as we recognise that in this technology-driven world, innovation and early adoption of new technologies is, to a large degree, far more flexible in economies that are not hampered by legacy issues and hang-ups. We’ve seen this happening in such diverse places as Cambodia, Ghana, and Colombia .

Countries such as Cambodia are increasingly adopting eCommerce and there’s enormous potential for companies like Earthport to take their expertise to a market that’s still in its infancy. In some ways, it is easier to bring new ideas to a market that is eager for new technology and ideas. That’s why in some parts of Africa, Kenya for example, mobile payments have enjoyed huge traction. LatAm, is seeing a big wave of internet adoption, which will also feed the growth of eCommerce in the future. It’s all part of the financial inclusion agenda.

The “sharing economy” and emerging markets go hand-in-hand, for services like taxi hire. South-East Asia, for example, is a growth market for such business, because of the relatively low level of car ownership and the culture of opportunism. Technologies that make low value payments easier and add greater value are therefore in demand.

Similarly, with supply chains often very long and convoluted in Asia, payments offerings that can simplify the flow of funds can take some of the burden – and risk exposure – out of the chain.

There are hurdles, however, and the varied regulatory landscapes in emerging markets adds some challenges, but these are the consequences of expanding a franchise across borders and jurisdictions. Hence, while there can be no short-cutting on the compliance front for any company with ambitions in emerging markets, the opportunity to bring financial expertise and new services to these markets is attractive.

How will emerging markets develop in 2018? Increasingly, eCommerce companies and big payment service providers are eyeing opportunities beyond the traditional markets in this space. We looked at the so-called BRICS (Brazil, Russia, India, China) as emerging, but the map has changed once more to include a broad range of African , Lat-Am, and Asian states that rarely got a mention in business discussions in the past. That’s why our solutions today have to be adaptable, future-proofed and risk-tested. Those companies that get it right will be providing a much-needed offering to a whole new set of customers, and that, in turn, will bring benefits to the providers of those services.

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