E-commerce has moulded new consumer behaviours when it comes to buying choices, with global e-commerce sales expected to exceed $4.9 trillion by the end of this year. Despite these forecasts, many regions are still excluded from e-commerce growth and accessibility owing to existing limitations that might be overcome with the right timing and approach.

Global e-commerce sales reached $876 billion in the first quarter of 2021, up 38% year over year, with projections of sustained growth of 24.5% by 2025. The rise, however, has not been as widespread as it appears at first glance. Huge numbers of the population in Fast-Growing and Emerging Markets remain unbanked—as much as 50% of Africans are still unbanked, with South and Central Americans coming in second at 38%. As a result, certain regions are facing limitations when it comes to cross-border e-commerce.

Frank Breuss, CEO and co-founder of Nikulipe, a Fintech company creating and connecting Local Payment Methods to access Emerging and Fast-Growing Markets, points out that, while each Emerging Market has its own specific issues around cross-border payments, there are three main ones that stand out as most prevalent.

What they are saying

Frank Breuss, CEO and co-founder of Nikulipe, said “Problems that are stifling growth in Fast-Growing and Emerging markets have been around for ages. Variety of payment cards, country-specific legislation, and currency restrictions, as well as logistics, are among the key issues hindering e-commerce growth.

“For example, while payment cards like Visa and Mastercard are widely available in North America or Western Europe, they’re not easily accessible in Fast-Growing and Emerging markets. Even if consumers have payment cards, these are often local ones, intended for domestic use only, meaning they cannot be used to purchase goods from international merchants.”

Breuss elaborates that the situation is similar to bank transfers. For those who have accounts with local banks, these financial institutions, in most cases, are not well-connected to the banking network internationally, making cross-border bank transfers very slow and expensive.

Fast-growing and emerging economies are also contending with country-specific regulation, or the absence thereof. Latin America struggles with operational payment restrictions, in which payment orders can only be issued on working days within specific hours. Africa’s fragmented market is a constant source of frustration for foreign merchants, with over 40 distinct currencies and regulations to contend with. Even though a consumer can buy products or services via an overseas website, the merchant may not have simple access to the payment itself, according to Breuss.

According to Breuss, logistics difficulties such as shipment limitations or customs hold-ups constitute an extra struggle for many emerging markets. International merchants must find out how to deliver items to their clients in these countries in a timely manner, as well as overcome customs delays, which can add up to significant delays.

To help solve these issues for international Merchants and at the same time include as many consumers in global e-commerce as possible is not an easy task—it takes time, local know-how, and perseverance, Breuss notes.

“A certain lack of clear regulations and laws in Emerging Markets up the complexity of introducing new solutions. First of all, it’s key to understand the markets and their nuances, in order to offer relevant local payment methods that are suitable for consumer needs in each market. Partnering up with reliable payment solutions providers could aid in handling money flow from Fast-Growing and Emerging markets back to the merchant.”

With issues like payment and card limitations as well as logistics, Fast-Growing and Emerging Markets are ripe for new solutions. Helping solve the long-lasting issues could eventually draw exclusion from global e-commerce to a close. If consumers continue to show their wish to shop internationally, more merchants will try to find a solution to meet the demand—and consequently, bring more pressure on legislation to adopt the needed changes. Now, with the consumers in Emerging Markets doing exactly that, it seems to be the right time to start solving the complexities.

What you need to know about Nikulipe

Nikulipe is a Fintech company that facilitates Emerging and Fast-Growing market access for Fintechs, Payment Service Providers, and their merchants by streamlining cross-border payment solutions. Established in 2019, Nikulipe was founded by serial entrepreneurs, who have vast experience in the Fintech-industry, with direct expertise in payment industry technology and business development.