Strategy Note /

Digital payments: Strategic plans, targeted innovations and the hurdles ahead

  • Strategic priorities: Entering new customer segments, increasing use-cases of existing products, technology investment

  • Targeted innovations: Easier customer onboarding, chatbots and virtual assistants, big data analytics

  • Growth constraints: funding access, competition. Regulatory hurdles: capital requirements, data protection, KYC/AML

Digital payments: Strategic plans, targeted innovations and the hurdles ahead
Rohit Kumar
Rohit Kumar

Global Financials/Thematics

Rabail Adwani
Rahul Shah
Tellimer Research
10 August 2022
Published byTellimer Research

Our proprietary survey of 215 fintechs (including 56 payments firms) gives us insights into digital payments firms’ strategic plans, the innovations they are targeting and the main growth constraints their businesses face. We also compare our findings for payments fintechs with those for the broader EM fintech space, and with the results of our 2020 survey.

Payments fintechs are planning to enter new customer segments, increase use-cases of existing products/services, boost technology investment and increase operational efficiency. Relative to other fintechs, they are less keen on introducing new products and services.

The most targeted innovations of payments fintechs are centered on technology to ease customer onboarding, chatbots and virtual assistants, and big data analytics. Compared with other fintechs, they place less emphasis on artificial intelligence and blockchain.

The main factors that are slowing the growth of payments fintechs include regulations, funding access, competition and market size. Drilling down into the regulatory issues, rules relating to capital requirements, data protection, KYC/AML and consumer protection are the key growth limiters.

Strategic plans: New customer segments, more use-cases, tech investment, cost-efficiency

Based on our survey, the biggest strategic priorities for payments fintechs are entering new customer segments, increasing use-cases for existing products/services, boosting technology investment and increasing operational efficiency. Compared to other fintechs, payments fintechs are less focused on introducing new products and services.

In our 2020 survey, technology investment, expanding into other countries, and introducing new products/services were the top three strategic plans disclosed by payments fintechs. Our latest survey demonstrates an increased focus on enhancing product use-cases and entering new customer segments compared to our previous poll.

Payments fintechs are less keen on strategic partnerships, introducing new products/services and expanding to new markets than in our previous survey. One major shift in mindset is that firms are now trying harder to exploit the full potential of existing markets before committing to new ones.

Entering new customer segments

Financial exclusion is a major phenomenon in some emerging markets. Many EMs have a diverse customer base, by geography, age and income. In these environments, it makes sense for payments fintechs to modify their existing offerings to appeal to a broader range of customer segments. Firms planning to enter new customer segments include Alipay (China) and Remita (Nigeria).

Increasing use-cases of existing products/services

Payments fintechs can partner with merchants and institutions to expand the use-cases for existing products. This can help to drive growth in the user base and in transaction volume. Firms planning to enhance product/service use-cases include Vindi (Brazil) and Paystack (Nigeria)

Boosting technology investment

Investment in technology is one of the top strategic priorities for payments fintechs. Continuous investment in technology ensures that consumers get the best available features most securely and conveniently. Some payments firms planning to invest in technology include Keenu (Pakistan) and NowNow (Nigeria).

Increasing operational efficiency

Operational efficiency allows payments companies to boost their bottom line and also enables competitive pricing, thereby growing the addressable market. Payments fintechs targeting operational efficiency include NayaPay (Pakistan) and OnOnPay (Vietnam).

EM payments fintechs: strategic priorities

Targeted innovations: Easier customer onboarding, chatbots, big data

Planned innovations by payments fintechs over the next three years include technology to ease customer onboarding, chatbots/virtual assistants for customer education, plus big data analytics and risk management. Relative to other fintechs, digital payments firms place more emphasis on virtual assistants and big data analytics but have less focus on artificial intelligence and blockchain.

In comparison with our previous survey, innovations based on cloud technology have become less important, while quantum computing is getting more attention. The targeted innovations for payments fintechs that topped our previous survey included digital banking, chatbots/virtual assistants and cloud technology.

Technology to ease customer onboarding

Any complexities or difficulties in customer onboarding can damage customer goodwill, resulting in lower business volume and less customer loyalty. Due partly to regulatory requirements, customer onboarding has traditionally been a lengthy procedure, but payments fintechs such as PaySky (Egypt) and ShopeePay (Indonesia) are targeting to improve the process.

Chatbots and virtual assistants

If executed well, chatbots and virtual assistants can improve the customer experience by automating customer service/education and simultaneously allowing payments fintechs to reduce their operating costs by limiting the staff required to handle customer queries. Firms with plans in this area include Paytabs (Egypt) and EiduPay (Indonesia).

Big data analytics and risk management

Payments fintechs are using big data analytics to generate value from collected data. Meaningful insights can help to improve products and services, uncover new opportunities, boost operational efficiency and effectively manage risk. Firms that plan to innovate in this area include CashFree (India) and (Russia).

EM payments fintechs: targeted innovations

Major growth constraints: Regulation, funding/capital, competition, market size

The key growth constraints faced by payments fintechs are regulations, funding/capital, competition from fintechs and the size of the market. These top growth hurdles are in line with those cited by other fintechs.

Market size, regulations and competition from other fintechs were the top growth constraints for payments fintechs in our previous survey. Informal competition, distribution capacity and limited smartphone/internet penetration are now less important growth constraints than before.


Payments fintechs’ operations differ considerably from those of incumbents, and rulebooks are being continuously updated as regulators catch up with the pace of innovation. Regulatory oversight also tends to rise as these firms grow larger. As a result, payments fintechs are often subject to substantial regulatory uncertainty, which can act as a barrier to investment and growth.

Payments fintechs that regard regulation as a growth constraint include Skyband (Saudi Arabia) and Paysend (Russia).


Funding/capital is the lifeblood of payments fintechs because infrastructure requires significant investment, as does marketing, spending to attract unbanked/underbanked customers, to achieve notable scale and to meet any imposed regulatory requirements. Firms regarding funding/capital as a growth constraint include PayMate (India) and Conekta (Mexico).

Competition from fintechs

Payments start-ups face many challenges. Incumbents are actively developing digital products, either in-house or in partnership with fintechs. Meanwhile, other payments fintechs are ratcheting up the competition. Firms citing competition from fintechs as a growth constraint include Zoop (Brazil) and TrueMoney (the Philippines).

Market size

It can be difficult for industry leaders to outgrow the overall market, particularly as the number of competing payments fintechs rises. Firms that cite market dynamics as a growth constraint include Huifu (China) and Paynear (India).

EM payments fintechs: key growth constraints

Regulatory hurdles: Capital requirements, data protection, KYC/AML, consumer protection

The top regulatory hurdles cited by payments fintechs include capital requirements, data protection, KYC/AML and consumer protection. These top regulatory issues are in line with what other fintechs report. However, pricing restrictions are bigger concerns for payments firms than those in other fintech sectors.

In our previous survey, the top regulatory hurdles for payments firms were data protection, deposit insurance and consumer protection. Relative to the 2020 survey, capital requirements, KYC/AML laws and disclosure requirements have become more important constraints, while deposit insurance is no longer a major concern.

Capital requirements

Capital requirements create significant entry barriers for new players; in general, payments fintechs tend to favour capital-lite business models. They are also a key consideration for incumbents expanding their businesses. Firms citing this regulatory hurdle include ChinaPNR (China) and Zoona (South Africa).

Data protection

One way payments fintechs can generate competitive advantages is through the collection and utilisation of customer data. Data protection regulations play a key role in determining the extent to which these companies can obtain and use such information, and the processes they must follow to protect it. Payments fintechs citing data protection regulations as a hurdle to their growth include Eko (India) and Alymente (Brazil).

KYC/AML regulations

KYC/AML can be tougher in countries with a significant undocumented economy (at least relative to informal providers). Payments fintechs that have cited this as a major challenge to their operations include FacilitaPay (Brazil) and MobiKwik (India).

Consumer protection

Payments fintechs have access to consumers' funds and their personal details. Regulators are heavily focused on protecting consumers in both these areas, which can limit firms’ scope. Payments fintechs citing consumer protection regulations as a hurdle to their growth include ElectronicPay (India) and PayMaya (the Philippines).

EM payments fintechs: regulatory hurdles

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