How payment solutions foster financial inclusion

Making online payments accessible to more consumers increases financial inclusion, boosts economic growth, and helps more people to participate in the digital economy.

Financial inclusion refers to the availability and equality of opportunities to access financial services. The World Bank defines it as a process by which individuals and businesses can access appropriate, affordable, and timely financial products and services. These include banking, loan, equity, and insurance products. 


Advancements in payment technology are a critical factor in improving financial inclusion and education in a world where an estimated 1.7 billion people do not have a bank account


By enabling merchants to offer a wide range of alternative payment methods to customers in emerging markets, payment providers like PayU improve lives by making the digital world accessible to more individuals.  By bypassing traditional financial infrastructure that has previously excluded many customer segments, AI and machine learning also play a role in increasing financial inclusion. 


Keep on reading to learn more why financial inclusion is so important to PayU’s mission – and what companies in financial services and fintech are doing to make it a reality.


Table of contents

The relationship between payment solutions and financial inclusion

What makes payment solutions financially inclusive?

What can developed economies learn from emerging markets?

Financial inclusion in e-commerce: Benefits for global merchants

Summary: Building an inclusive e-commerce future 

Digital payments and financial inclusion PayU cover image

The relationship between payment solutions and financial inclusion

COVID-19 and the ensuing global health crisis disrupted every aspect of how societies function – forcing governments, businesses, educators, and citizens to adapt to a new way of carrying out their daily activities.


This has accelerated the pace of digital transformations that had already been taking place across e-government, remittances, and e-commerce.


With digital transformation comes the need for digital inclusion – in order to make sure that all citizens have the capability to benefit from modern conveniences and go about their daily lives.


When it comes to e-commerce, providing payment methods (including cash-based online payment methods) that are accessible to all is an important part of ensuring that all consumers can participate in the digital economy.

What makes payment solutions financially inclusive?

For a payment solution to be considered as inclusive, it needs to meet the following criteria:




Digital payment services need to reach excluded groups and be easy to both use and understand.




User funds and data should be available and protected against cyber theft, money laundering, and other potential security breaches.



Bringing value

A digital payment solution should offer people clear advantages over using cash in transactions.




Digital payment services need to be low-cost or free for all or most people.




Digital payment systems need to fully involve the private sector and allow providers to develop sustainable business models. 




Digital payments need to allow users to transact with other customers, irrespective of the service provider.

What makes digital payments inclusive infographic PayU

What can developed economies learn from emerging markets?

Developed markets have a long history of established finance. Yet as Deloitte has found, emerging markets often have higher rates of mobile penetration, as well as a greater willingness on the part of consumers to adopt new technologies.


When it comes to payments and many other aspects of fintech, digital technologies are allowing some emerging markets to bypass traditional financial infrastructure in the so-called leapfrog effect. The rapidly spreading use of mobile payments in Africa is a good example of this.


Providing digital businesses with the tools and capabilities to extend their services to more customers is therefore a key aspect of driving both financial inclusion as well as sustainable business growth. At PayU, our history and success as a leading local payment platform in emerging markets helps us both to improve the accessibility of financial services for consumers, while also supporting merchants eager to take lessons from emerging markets and apply them globally.


With emerging markets representing the future of e-commerce in terms of both growth potential as well as the adoption of many new e-commerce technologies, global businesses have much to gain from making these regions a key part of their long-term business strategy.


The PayU global payment processing platform, helps any online merchant doing business across borders to provide customers with a familiar and trusted local payment experience no matter the geography.

Financial inclusion in e-commerce: Benefits for global merchants

Ability to accept more payment methods

Offering a wide range of payment method options – especially alternative payment methods – is a key part of doing business inclusively, successfully, and sustainably in emerging markets. From an inclusion perspective, alternative payment methods help more consumers to access digital products and services. From a business perspective, local payment methods help merchants to increase store conversions and deliver a better user journey across the entire checkout process. 


According to an industry survey, 92% of global e-commerce customers prefer to shop in their own currency, while 33% are likely to abandon a purchase if pricing is only in USD. That’s why providing local payment options for customers to shop in their own currency is a smart move – it helps localize the overall shopping experience. 


Ordinarily, to accept local forms of payment merchants would have to work with local payment acquirers in their target markets. PayU takes care of this on the merchant’s behalf, opening up access to hundreds of local payment methods in key markets around the world.


Increasing approval rates 

In addition to acquiring more customers effectively, offering local payment methods has other advantages: namely, it increases payment approval rates and reduces the number of declined transactions. Although some consumers in emerging markets use major credit cards and other common global payment methods, these modes of payment are not as common as some think: in India for example, credit card penetration is only 4%. In Latin America, alternative payment methods account for more than two-thirds of all online payments.


Furthermore, in emerging markets many global payment methods suffer higher rates of false declines when compared with their use in developed countries.


Payments that are made and processed locally, on the other hand, are less likely to stumble into fraud filters and other obstacles, and therefore more likely to result in a successful transaction.

Global Local Payment Methods PayU Website

Summary: Building an inclusive e-commerce future

Fintechs like PayU play a critical role when it comes to building financial inclusion into digital transformation. Both smaller local payment providers and global players like PayU are united in the mission of building a strong digital foundation for businesses and consumers in emerging markets and beyond.


Our vision at PayU is to create a world without financial borders where everyone can prosper. Accommodating local payment method preferences remains key to breaking down barriers to financial inclusion – while also helping merchants to have the most successful experience when expanding into new markets.


We are actively working toward a future where financial services for cross-border trade, peer-to-peer remittances, personal money management, and more will continue to become more accessible as technology advances, and mobile payment capabilities improve.


As the e-commerce world continues to grow and change, PayU will continue to put itself at the forefront of aligning financial inclusion and digital access with opportunities for digital businesses and their customers to prosper.