What are the key success factors for digital payment systems in emerging markets?

1 Market demand

The first and foremost factor is to understand the needs, preferences, and behaviors of the potential customers in the target market. This involves conducting market research, segmenting the customer base, and designing a value proposition that addresses their pain points and aspirations. For example, some customers may value convenience, speed, and security, while others may prioritize affordability, accessibility, and trust.

2 Regulatory environment

The second factor is to navigate the regulatory environment of the country or region where the digital payment system operates. This involves complying with the relevant laws, rules, and standards that govern the payment industry, such as anti-money laundering, consumer protection, data privacy, and interoperability. It also involves engaging with the regulators, policymakers, and industry associations to advocate for a conducive and supportive regulatory framework that enables innovation and competition.

3 Technology infrastructure

The third factor is to leverage the technology infrastructure that supports the digital payment system. This involves choosing the appropriate platforms, channels, and devices that deliver the payment services to the customers, such as mobile phones, point-of-sale terminals, QR codes, or biometrics. It also involves ensuring the reliability, scalability, and security of the technology infrastructure, such as network connectivity, data storage, encryption, and authentication.

4 Business model

The fourth factor is to develop a sustainable and profitable business model that generates revenue and covers costs. This involves identifying the sources of income and expenses for the digital payment system, such as transaction fees, subscription fees, cross-selling, or advertising. It also involves optimizing the pricing, cost structure, and value chain of the payment services, such as reducing operational costs, increasing customer retention, or partnering with other stakeholders.

5 Ecosystem collaboration

The fifth factor is to collaborate with the ecosystem of actors that influence and enable the digital payment system. This involves building and maintaining relationships with the key stakeholders, such as customers, merchants, banks, telecoms, fintechs, or NGOs. It also involves creating and joining networks, platforms, or alliances that facilitate cooperation, integration, or innovation among the ecosystem players, such as mobile money associations, payment switches, or sandbox programs.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?