Globally, approximately 1.7 billion adults are still unbanked, without access to an account at a financial institution or through a mobile money provider. In Brazil, roughly 55 million adults do not have a bank account. In fact, the developing world is home to virtually the entirety of the global unbanked population.
China and India take the lead, with 225 million and 190 million adults, respectively, without a bank account. These two economies, together with Pakistan, Indonesia, Nigeria, Mexico and Bangladesh, account for nearly half the world’s unbanked population.
However, this does not mean they are not connected or actively purchasing online. Just over 25% of adults worldwide bought something online in 2017 and about 1.1 billion out of the unbanked population own a mobile phone. In India, 69% of adults have a mobile phone, as do 85% in Brazil and 93% in China. Fintech companies are playing a leading role in creating innovative solutions that are more inclusive. Thanks to this, more people around the globe can also take part in ecommerce.
When we think about online purchases, we automatically associate them with card payments, e-wallets and mobile payments. However, buying something online does not necessarily mean paying for it online. In all developing economies, excluding China, 53% of adults often choose alternative cash payment methods such as cash on delivery, which is very popular in India and Mexico, and boleto bancário in Brazil. In China, thanks to a strong penetration of mobile payments, such as WeChat Pay and Alipay, 85% of adults who purchase something online also pay for it online.
We cannot deny the importance cash still plays in most emerging economies. In addition to the unbanked, alternative cash payment options are also essential to enable people in a debt situation to finance their purchases. In Brazil, 60.1% of households started 2019 with some sort of debt, with as much as 22.9% of them defaulting on payments and 9.1% stating they could not pay their debts. When people do not have credit to their name, cash payment options, such as Oxxo in Mexico and boleto bancário and PEC Flash™ in Brazil, can help them continue paying for their purchases.
Innovative solutions encouraging digital and financial inclusion can enable 1.7 billion people to buy online around the globe, which is bound to drive major ecommerce growth in the coming years. China is a clear example of what internet access and fintech solutions can do to boost ecommerce. Nearly 70% of all internet users in the country carry out mobile digital payments and it is estimated that by the end of 2019, China will have 55.8% of all ecommerce sales globally.
In other emerging economies, fintech companies are also key to financial inclusion. For instance, Brazil is currently home to over 370 fintech companies of which 25% provide payment services. Innovative solutions such as PagBrasil’s Boleto Flash® and PEC Flash™ not only provide access to digital offerings for unbanked Brazilians, but also better serve consumers who are primarily connecting to the internet via mobile devices. In India, Fintech solutions have 52% adoption rate, placing the country only behind China in the global ranking. Overall, fintech companies are exploring the gaps left in the market by traditional players to better take advantage of this immense opportunity.
About Ralf Germer
Ralf is Co-Founder and Co-CEO at PagBrasil. His fields of expertise are business management, international business development, marketing, online sales and payment processing. Prior to PagBrasil, he was Vice President of Product Marketing Europe at Actebis and later founded 4M Iberoamérica.
About PagBrasil
PagBrasil is a Brazilian fintech company processing payments in Brazil for multinational ecommerce businesses. With focus on innovation, we created the best infrastructure for the Brazilian market. By providing an outstanding service and innovative products, such as Boleto Flash® and PEC Flash™, we create unique value for our clients and their customers. Our comprehensive online payments platform is the result of more than 20 years’ experience in the segment and relies on innovative resources, designed specifically for the Brazilian market. Local and international merchants gain access to the most advanced portfolio of products and services, which help them boost their sales immediately.
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