Payment trends in emerging APAC and Africa regions – A Thunes perspective

What are the latest payment trends in emerging markets? Could you take us through an overview of the newest developments in regions such as APAC and Africa? 

First of all, there are two major trends to watch in Asia and Africa: changing consumer behaviour and the adoption of mobile wallets. The share of the banked population in these regions is still relatively low, and as a result, alternative financial products are gaining ground. In Southeast Asia alone, there are approximately 200 e-wallets, and new digital payments providers enter the market almost every week. Similarly, we see that mobile money is becoming the default payment method in Africa. 

Moreover, we also see the rise of cross-border transactions between e-wallets and the emergence of new infrastructure, connecting the emerging markets with the developed ones, without relying on the traditional SWIFT and correspondent banking rails.

Finally, if in the past the focus was mostly on P2P transactions, we are now seeing a significant drive in business payments, particularly for SMEs. We see rapid digitalisation and a lot of entrepreneurial activity bringing convenience and innovation into this sector. 

What can you tell us about the current cross-border payments ecosystem in these regions, with a special focus on the way international payouts and payins are handled? 

The cross-border ecommerce market is still very fragmented and dominated by transfers made via traditional rails, such as correspondent banking. Yet, when you rely on bank infrastructure with multiple intermediaries, costs can often add up to USD 25-35 per transaction (or higher), excluding FX. But there are better, faster, and more transparent ways to send money internationally. 

Thunes is building a payments technology infrastructure to connect payments globally and provide a better network, reducing the complexity and cost of cross-border payments. This interoperable ecosystem can connect e-wallets to banks – and vice versa – and facilitate cross-border payouts for our clients. We integrate the most popular payment methods including bank accounts, e-wallets, mobile wallets, and cash pick-up providers into a central platform, and we provide access to 115 countries. 

Our customers can use our single API connection, which gives them access to multiple markets, as well as transparency, so they can effectively make real-time instant payments, regardless of the size of the transaction.

On the collection side, we power 285+ payment methods, helping our global customers to open new markets and maximise conversion rates by offering local payment methods. For example, a Chinese seller that wants to enter a marketplace in Kenya will be able to receive its money via the predominantly used payment method there, which is M-PESA. We essentially connect to all the payment methods in a particular country. So, we not only enable payouts into multiple markets, but also enable marketplaces and PSPs to collect payments from emerging markets. 

Considering the great potential for growth that APAC shows, could you please elaborate on the opportunities Thunes is offering to marketplaces? 

We are building a single global payments platform that will become a single entry point for both payouts and collections. It’s key for a marketplace to offer relevant payment options to both buyers and sellers, and this is where Thunes comes in. We enable marketplaces to expand their payments capabilities for both collections and payouts and onboard not just traditional but also so-called ‘alternative payment methods’, such as e-wallets, bank transfers, BNPL options. 

We also provide support when it comes to settling marketplaces in the currency of their choice. Through our treasury function, we trade different currencies and settle them in any currency they need. 

Marketplaces are consistently adding multiple payment processors at checkout to service a growing global customer base. Why should they leave everything in their payment provider’s hands, instead of having full control over the payment flow? 

Currently, there are more than 500 payment methods worldwide, and for most companies, it’s impossible and unreasonable to individually onboard them all. To address that, some payment players use an aggregation model and reach these payment methods via partners.

Thunes is different, as we actually do the heavy lifting and work with payment partners directly, taking care of the integration and contracts all the way. 

Moreover, we have the intelligence of what payment methods are best suited for a certain market or region, and considering the evolving nature of payments, this can serve a long way. We feel that marketplaces should focus on their core business – bringing in sellers and expanding footprint – while payment operations should be outsourced to partners like us. 

With all the talk around the rise of instant, real-time payments, what can you tell us about instant payouts in the cross-border context? How does Thunes’ solution differentiate from other similar offerings internationally? 

Quick fact about our network: last month 94% of all our transactions were paid out in real time, and we made this possible through the direct connection with our key partners. Our modus operandi is simple: in the case of an e-wallet transaction, we instruct the partner to make the payment, they give us a confirmation that the e-wallet has been credited, and then we settle on the back end. Similarly for bank transfers: we leverage the local country banking rails, which typically allows us to send payment to the recipient in real time.

This interview was first published in our Cross-Border Payments and Ecommerce Report 2021–2022, which taps into the fast-growing cross-border market and provides a comprehensive overview of trends and developments that are pivotal in this space, being the ultimate source of information for ecommerce businesses interested in expanding globally. 

About Andrew Stewart

Andrew is a senior business leader with over 21 years of international payments experience. During this time, he has held various roles ranging from product development and management, marketing, business development to general management. Andrew is currently the Global Head of Networks at Thunes, a leading cross-border payments company. He is responsible for the expansion and optimisation of Thunes’ global payout network consisting of hundreds of partners from banks, mobile money providers to other payment providers.

About Thunes

Thunes is a B2B company that powers payments for the world’s fastest-growing businesses. Thanks to a single API connection, customers reach new markets and multiple payment options in over 125 countries without the need for countless integrations to multiple systems. Today, more than 100 banks, payment service providers (PSPs), money transfer operators (MTOs), mobile wallet operators, platforms, and fintech companies around the world use us to process cross-border payments in a cheaper, faster, more transparent, and more secure way.