Voice of the Industry

The high-adoption rate of real-time payments in India and Brazil

Tuesday 7 February 2023 08:45 CET | Editor: Irina Ionescu | Voice of the industry

Mikael Lijtenstein, CEO at AstroPay, talks about the fast adoption rate of real-time payments in two of the most important BRIC countries – Brazil and India, underlying the benefits of accessing financial services faster and more secure.

India and Brazil have many similarities when it comes to accessing financial services, with specific difficulties encountered by those without access to bank accounts when wanting to make payments nationally and internationally.

Around 34% of the Brazilian population does not have access to bank accounts, which makes it difficult to make payments for services online.

With the help of PIX, a local domestic payment scheme – which launched in 2019 – digital payments has spiked in adoption, as it is regularly being used by more than 60% of Brazilians for six billion transactions worth more than USD 680 billion.

A similar story can be seen in India, where around 130 million people do not have access to a bank account, forcing them to only pay in cash for products and services. Women particularly can be disenfranchised in some countries, such as India, where they may not have formal means of identification, are less likely to have a mobile phone or other technology, and may have a lower financial capability, according to The Global Findex Report 2021. The position is similar in Brazil, with women being the most under banked population category. 

For India particularly, the distance to a banking service is one reason why the take-up of traditional financial services is less here. Even among those who have got accounts in India, around 540 million people have not made any digital payments, according to the same report. Some 670 million people in India with accounts only made merchant purchases in cash.

Cultural change during the pandemic

However, the pandemic began to change things, as face-to-face contact around the world was limited. This prompted a surge in the use of digital payments with around 80 million people in India making their first digital merchant payment during this period. 

Alternatives to using traditional payment services offered by banks and credit card providers are growing, with digital wallets becoming more popular for those looking to make fast and seamless, low-cost transactions. This change is vital, especially for customers in countries with lower banking access, as the expectation is that consumer ecommerce will be worth around USD 7.4 trillion by 2030, with more than one dollar in seven – USD 1 billion – being transacted across borders, according to consultants McKinsey and Company. Everyone should be able to benefit from this online economy.

Merchants need to accept digital payments of all types

For merchants, making sure they accept the most popular payment methods from any country in the world is essential, otherwise they risk missing out on sales. Research from PaymentsNext shows that up to half of consumers will abandon transactions if the merchant does not offer their preferred payment method.

Yet, payment options are constantly growing, and the ‘en-vogue’ method of payment changes regularly, which doesn’t make sense for merchants to independently add another one to their offering, based on trends alone. This is where a third-party payment services provider comes in handy as it will help merchants stay on top of these changes and allow them to expand the number of payment options they provide, as and when more become available.

Digital payments are becoming more popular

In the current payment environment, no single digital payment service is as widely accepted by merchants as card schemes Visa and Mastercard. But as the adoption of digital wallets increases, especially with those under 40 – the age group that represents more than half of digital wallet users – the balance is likely to eventually tip in favour of tech and away from plastic.

However, the process will take time. Even though the rise in adoption is expected to boost the popularity of digital wallets in the coming decade, Payments Cards, and Mobiles (PCM) expects cards to still be used for around 50% of all electronic transactions by 2030. This is mostly the legacy of the older generation’s reluctance to adopt digital wallets, and the problems some of these wallets have with acceptance across borders.

Smoother cross-border digital payments

To resolve these issues, some wallet schemes have merged to allow greater access to smooth cross-border transactions. VIPPS in Norway and MobilePay in Denmark have merged to expand their cross-border transaction capacity. In addition, they have an agreement with Visa which is expanding international transaction acceptance. Yet, this will only benefit 18 million people, so much more needs to be done on a wider scale.

The solution that digital wallets offer those in emerging markets such as Brazil and India, means there is enormous potential for growth, but consumers and merchants may need these payment providers to offer incentives to encourage greater uptake, in the same way that card providers do. 

Whether these incentives appear or not, the greater flexibility of digital wallets compared to cards in their functionality, capacity to be updated remotely rather than needing to be reissued, and to add new functions at the touch of a button, is likely to boost their appeal. A greater security associated with digital wallets – with face ID or fingerprint recognition locking smartphones where these wallets are typically held –likely to accelerate digital wallets even further.

A flexible, easy-to-use, widely accepted, secure, and reward-based digital wallet that is accepted internationally is key to providing access to the underbanked population in India and Brazil. 

Digital wallets can democratise the access to payment services that otherwise would not be available in certain countries. At the same time, it increases digitalisation for other demographics, , especially women and the low paid. There is a push in many countries to make financial services more inclusive, and the use of digital wallets is one of the, simplest and most affordable ways to achieve this.


About Mikael Lijtenstein

Mikael is the CEO of AstroPay, a pioneer in payment solutions for consumers who want to make online purchases on international sites. Leveraging his background in engineering and experience in providing cross-border payments as well as connecting global merchants to emerging markets, Mikael combines a unique blend of technical expertise and practical experience to drive innovation and solutions in payments. 


About AstroPay

Launched in 2009, AstroPay is an online payment service that enables users to purchase online on international sites. Using AstroPay’s solutions, users can pay for their online purchases with local payment methods and in their local currency, eliminating the need of an international credit card. The app uses more than 200 payment methods including local payment solutions. Since its launch, the company has spread its activity throughout Latin America, as well as to Asia, Africa, and the UK, counting for over 7 million users.

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Keywords: financial services, financial inclusion, digitalisation, real-time payments, cross-border payments, online payments, e-wallet, digital wallet, mobile payments, unbanked, PIX, payments , identity verification, digital payments
Categories: Payments & Commerce
Companies: AstroPay
Countries: Brazil, India
This article is part of category

Payments & Commerce


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