Emerging Market Payments Demand Earlier Decisions on Local Rails

Payment choices can determine whether an emerging market launch is ready before the first customer reaches checkout. For merchants entering Brazil, India, Kenya or Southeast Asia, a card-first setup may leave out the local rails customers rely on and create costly changes late in the launch process.

Carlos Menendez, chief operating officer at cross-border payments platform dLocal, argues that merchants should treat payments as an early market-entry decision. The views in his contributed piece are his own. Research on emerging market entry cited in the piece finds that 64 per cent of merchants report operational or technical payment failures, while 57 per cent say those failures lead to conversion problems.

Local payment rails set the terms

The scale of local systems makes the commercial case clear. Brazil’s Pix handled 64 billion transactions in 2024, nearly twice the country’s combined card transaction volume. The system settles in seconds, costs merchants a fraction of card interchange and reached 93 per cent of Brazilian adults in less than five years.

India’s UPI accounted for nearly half of global real-time digital payment transactions last year. Its transaction value was twelve times the combined value of card payments in India. In Kenya, M-Pesa serves 34 million subscribers and processes about $800 million a day, including for many people without traditional bank accounts. Ghana offers another measure of mobile money’s reach: nearly 60 per cent of adults use it as their primary financial tool, in a market reported to have grown nearly 57 per cent year on year in 2024.

These systems reflect different consumer habits and financial infrastructure from those in the US, UK and Western Europe, where cards are broadly held and acquirer selection can come late in the launch process. A merchant that carries over a familiar card setup may technically enter a market while missing a large share of its payment demand.

Three choices that shape launch economics

First, merchants need to settle their entity structure. Pix requires a local legal entity, as do several leading payment methods in Latin America and Southeast Asia. A cross-border structure may be quicker to establish, but it can prevent a merchant from accepting the method most local consumers use. Discovering that constraint shortly before launch can mean months of delay while the business restructures.

Second, pricing needs to work in local currency. Showing dollar prices to someone paying through Pix or M-Pesa adds friction at checkout. Local currency pricing also affects foreign exchange exposure and margins; in some markets, it may require regulatory approval. Those commercial questions belong in planning before integration begins, since changing prices later can affect both conversion and unit economics.

Third, finance teams need a plan for settlement and reconciliation across local systems. Southeast Asia makes the complexity visible: Indonesia, Thailand, Vietnam and Malaysia each have distinct payment rails, regulatory frameworks and settlement processes. QRIS, PromptPay, VietQR and DuitNow are separate systems shaped by their respective central banks and local consumer behavior.

That fragmentation makes a single regional setup difficult to assume. A merchant that designs for one market may find the same process doesn’t fit its neighbors. Without country-level reconciliation plans, finance teams can end up building manual workarounds once transaction volumes grow, adding operational strain as the business scales.

Make payments part of market planning

Menendez’s central point is that payment infrastructure influences decisions well beyond checkout. Local acceptance can affect the legal entity, pricing model and finance operations. If those choices are made before the payment requirements are understood, businesses may have to revisit decisions that seemed settled.

Merchants that assess local payment methods early have more room to align launch structure, currency and reconciliation with the market. In these regions, payment planning is a condition of market readiness, and leaving it until the end can turn a technical gap into a launch delay or lost sales.

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