The world’s emerging markets account for about 85% of the world’s population, offer the most attractive economic growth rates and have a rapidly growing middle class with real purchasing power. Why don’t the more developed market companies target customers in these countries?
The answer, say British fintech founders Pay Future, is not that Western companies don’t want to sell in emerging markets, but that they often find it impossible to do so. The demand for their products and services is there – and growing rapidly – but the practicalities of meeting that demand, and especially getting paid, get in the way of the opportunity.
The rise of online sales has solved the problem of reaching new markets in recent years, emphasizes PayFuture’s co-founder and CEO Manpreet Haer. But actually completing the sale and getting paid is another matter. “If you want to enter these markets, you have to offer local payment methods and that’s something that many companies are just not ready for,” he warns.
PayFuture’s ability to solve that problem has seen it grow remarkably fast since its launch in 2019 – despite not raising funding from outside investors, with the fintech founders owning the development. stimulated.
The company now offers payment services in more than 40 countries and is on track to support $2 billion in transactions this year. It’s been in the black since its earliest days, grossing $4.3 million in 2020, its first full year in business, rising to $11.1 million last year.
Growth appears to be continuing along that trajectory. For 2022, PayFuture now forecasts profits to at least double, and it is recruiting rapidly to support its expansion. The company’s workforce has increased from 14 employees in 2021 to more than 70 today.
PayFuture founders Manpreet Haer and Zaki Farooq, with chief people officer Roxanna Bashir … [+]
The company’s unique selling point is its ability to connect developed market merchants to multiple local payment solutions in the emerging markets they now serve – providing access to more than 30 such markets worldwide.
“It’s all about solving a problem that hasn’t been solved before,” adds Haer. “We want to be the bridge between traders and these emerging markets to help them gain valuable access to growth areas, but in a safe way.”
PayFuture now has customers in the UK, mainland Europe and North America, Haer explains, but it also works with companies selling from one emerging market to another. Digital service sectors such as education technology, travel and online gaming are a special target group; the company has also held talks with online retailers, although given the complexity of logistics and fulfillment, these companies have been slower to embrace emerging markets.
PayFuture not only allows payments to flow freely, but also offers services to help customers who are setting up for the first time in emerging markets, for example through bureaucracy and bureaucracy, such as the need to set up local entities. It can also support payments to emerging markets where they are needed.
The company started with a focus on India, long tipped as a powerhouse of global economic growth – and now economists expect it to become the world’s third largest economy by 2030. But the key has been to be guided by where customers want to do business, Haer adds. “It’s ultimately what traders tell us that determines where we expand,” he says. “They tell us where they want to do business and we want to help them make that happen.”
In addition, the fintech is a kind of whistleblower, providing early evidence of the emerging markets where international companies see the most opportunities. Haer points to Southeast Asia as a region that is in high demand, especially Pakistan and Bangladesh. East Africa also fascinates many traders, he says, with Kenya and Tanzania in particular standing out.
The company believes that much more growth is possible and will continue to bring the simplicity of the connections it offers to popular payment methods in every region to the market. Its business model relies on it receiving a small commission on transactions that go through these connections.
“As Internet usage increases in these regions, so does the opportunity for e-commerce merchants to enter these new markets and find previously untapped markets for growth,” says Haer.
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