Ball of confusion Trends shaping global A2A payments

João Del Valle , CEO of fintech firm EBANX discusses the three trends to watch in digital commerce transactions and how they are changing the very nature of commerce in LatAm, India and Africa

The growth of new payment methods is instigating significant changes in digital commerce worldwide, with the popularity of real-time payments like Pix in Brazil, UPI in India, PSE in Colombia and mobile money in Kenya signifying a cultural shift in the digital payments market.

In fact, A2A [account to account] transactions growth is changing the way people consume online across the globe. There are three trends in the digital economy that global companies need to pay attention to. Aside from the cultural shift driven by the popularity of A2A transactions, the transformation of payments into digital channels due to consumer behaviour and the rise of innovative services that combine credit and debit cards with alternative payment methods (APMs).

A2A IS THE KEY

It is A2A that is really shaping things, I believe. In Brazil, EBANX’s merchants saw a 16% increase in revenue after integrating Pix solution with EBANX and a 25% increase in their client base.

According to data from Payments and Commerce Market Intelligence (PCMI), by 2025, 44% of digital commerce volume in Brazil will be paid with Pix, surpassing credit cards’ volume, which will account for a 41% share. The popularity of Pix is a sign of the future of APMs across the globe.

In Colombia, PSE already dominates digital commerce, with a 31% share of all volume transacted online in the country, per PCMI.

“And it’s not only about offering more options. It is also about bringing people in. PSE brought more than half of all new customers for two online retail companies that process payments with EBANX over a three-year period.

Another success story is mobile money in Kenya, which accounts for 48% of all digital commerce in the country. A mobile-native method, for a mobile-savvy population. At EBANX, this is the first choice of payment method for all merchants starting in Kenya. The A2A transactions, the executive comments, are playing an important role in digital inclusion worldwide.

CUSTOMER BEHAVIOUR CHANGING DIGITAL COMMERCE

In India, the growth of UPI since it launched in 2016 has sparked a revolution, transforming the former cash-based economy into a digital payments powerhouse, with 55% share of digital commerce, per PCMI, and the potential for 80% penetration, according to India’s Ministry of Information and Broadcasting.

In another cash-based country, Egypt, consumer habits are transforming the payments market – and the digital economy. There, 64% of the volume in digital commerce is paid with cash, cash-based vouchers or QR code, available for both

banked and unbanked consumers. They are literally digitising cash, making the global digital economy available for everyone - including the majority of the population who does not have access to financial accounts or cards.

HYBRID PAYMENT METHODS

There is also a need to balance cards and APMs across rising markets when it comes to digital commerce; how they complement each other – both where cards prevail, and where APMs are kings.

Another change is the innovative combination of APMs and cards into hybrid payment methods in emerging markets.

In Tanzania, mobile money is enabling card payments in digital commerce, with MPesa partnering with Visa for a virtual card. Meanwhile, in India, credit cards are seamlessly integrated with UPI, enabling credit card payments through the instant payments app, in a well–known UX and flow.

A report from PwC published last August indicated that the number of credit cards in the country is expected to double by 2029.

The focus of the EBANX Payments Summit is to demonstrate how companies can achieve global growth in digital commerce by adding rising markets into their global expansion plans, and navigating the complexities and nuances of local payments. “Local payments are no longer exotic: they are mainstream for the global growth of global companies.