The fresh market (Vietnam) -- Wen Jye Chan, 2016 CGAP Photo Contest Photo by Wen Jye Chan, 2016 CGAP Photo Contest
Bill Paying by Using Mobile Banking by Dipayan Bhar
A customer makes a mobile payment to a taxi driver in India. India’s nationwide digital payments infrastructure has attracted tech giants like Google and Facebook, which are testing retail payments solutions in India that they hope to roll out globally. Photo: Dipayan Bhar, 2015 CGAP Photo Contest

With vast amounts of revenue and data at stake, merchant payments are widely seen as one of the key battlegrounds in the struggle over the future of digital financial services (DFS). Most major DFS providers are thinking about entering or have already deployed merchant strategies. Many are taking advantage of their early-mover status to stay ahead in the fintech space, where retail payments have quickly emerged as the fastest growing and most competitive space, regardless of the market.

This is important, since in digitizing merchant payments, DFS providers are enabling a wide range of new use cases for consumers and creating opportunities to develop products and services that benefit the poor. A broad shift from cash to digital payments is likely to be a powerful catalyst for financial inclusion, unlocking access to financial services for people and small businesses across the developing world.

However, merchant payments present many challenges, and DFS providers who underestimate these challenges are likely to struggle. This digital handbook is for them. It offers resources that address some of the key questions providers are — or should be — asking as they prepare to enter the merchant payments space, with a view to helping providers make informed decisions.

The four tabs for this handbook include resources of varying length and depth for everyone at a DFS provider who is involved in making decisions around merchant payments in emerging markets and developing economies:

  • C-suite executives will find concise overviews of key challenges and solutions in merchant payments. Links to blog posts are available under each tab for executives who would like to learn more about a particular issue but don’t have a lot of time to spend.
  • DFS directors and product managers will find articles that elaborate on the key issues at greater length and suggest various potential solutions that providers may want to consider.
  • Team leads and operational teams will find slide decks that go into the practical details of issues like designing loyalty programs for retail payments, developing value-added services for small merchants and creating low-touch digital credit products.

While this digital handbook does not have the ambition to cover every possible issue and solution, it is our hope that this set of resources can help guide providers to success and enable their customers to benefit from the promise of merchant payments.

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