• The emerging financial technology sector boosts inclusion and liquidity in emerging markets.
• Nonbank entities compete with traditional financial institutions for market share.
• Cryptocurrency uptake remains strong as governments eye e-currency adoption.
• Remittances and informal economies provide resilience amid economic headwinds.

Even as the global economy grapples with inflation, supply chain constraints and high commodity prices, new payment solutions are helping billions in emerging markets access and deploy much-needed capital.

Driven by a decline in cash payments during the Covid-19 pandemic, digital payments skyrocketed in line with the growth in e-commerce, as the financial technology (fintech) sector expanded to provide consumers with a wider variety of payment options.

The growth of digital payments has been strongest in emerging markets, where noncash retail payments increased by a compound annual growth rate (CAGR) of 25% between 2018 and 2021, compared to 13% globally for the same period. A young, tech-savvy population and demand access to financial services are driving growth.

Digital payments are expected to continue to expand globally, with a projected CAGR of 15% for 2022-26.

Fintech in emerging markets has also drawn significant investment. Fintech operators accounted for 37% of the record $4.85bn in funding that African start-ups received in 2022 – the largest share of any sector.

This growth, evident in the uptake of cryptocurrency and microcredit...

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