International merchants expanding into Brazil, India, Kenya or Southeast Asia often treat payments as the last box to tick before launch, on the assumption that a card acquirer will do the job it does at home.
In markets built on instant payment schemes and mobile money, that assumption can delay launches and depress conversion before a single sale is made.
Carlos Menendez is chief operating officer at dLocal, the cross-border payments platform that connects global merchants with local payment methods in emerging markets. In this contributed piece, he argues that the payment infrastructure in many emerging markets has overtaken the West, and sets out three decisions merchants need to make early to enter those markets successfully. The views expressed are his own.
Three weeks before launch in Brazil, a global merchant discovers that their cross-border entity structure cannot accept Pix. The fix, establishing a local entity, takes months. The launch slips. When they finally go live, their checkout is built around payment methods that most of their target customers rarely use, and the conversion rate reflects it.
This story repeats more than it should. Research into emerging market entry specifically shows that 64 per cent of merchants report operational and technical failures with their payment systems, and 57 per cent experience conversion problems as a direct result.
The source of those failures is rarely a bad product or a poorly timed launch. It is a payments model built entirely for markets the merchant already knows. And these are not edge cases: the statistics show that this is the norm.
The fatal assumption
Western merchants sometimes arrive in these markets with the confidence of someone who has never considered that local ingenuity might have built something far more technologically advanced than anything they have at home. They bring their payment stack the way a traveller brings a phrasebook: reassured by the preparation, unaware that a phrasebook will never teach you the language.
In the US, UK and Western Europe, cards are widely held, interchange infrastructure is mature, and choosing a payment processor is genuinely a late-stage decision. Pick a card acquirer and you are mostly done, it seems. The problem is that the markets these merchants are now entering did not build their payments infrastructure on card rails. They built something different, and in several respects something more advanced.
Pix, Brazil’s instant payment system, processed 64 billion transactions in 2024, nearly twice the combined volume of all card transactions in the country. It settles in seconds, costs merchants a fraction of card interchange, and reached 93 per cent of Brazilian adults in under five years. India’s UPI processed nearly half of all real-time digital payment transactions globally last year, with a transaction value twelve times the combined total of all card payments in India.
In Kenya, M-Pesa processes around $800 million a day and serves 34 million subscribers, many of whom have never held a traditional bank account.
In Ghana, nearly 60 per cent of adults rely on mobile money as their primary financial tool, in a market recorded as growing at nearly 57 per cent year-on-year in 2024. These systems settle faster than card networks, are cheaper to operate, and are accessible to populations that cards never reached. By the measures that actually define a payment system, the infrastructure in these markets is not behind the West. It has left it behind.
Three decisions that make or break entry
A merchant arriving in any of these markets with a card-first payments stack is not appropriately entering the market. They are attempting a partial version of it. Three things will determine which side of the market entry success or failure statistic merchants land on.
The first is entity structure. Accepting Pix requires a local legal entity. The same applies to several dominant payment methods across Latin America and Southeast Asia. A merchant that enters through a cross-border structure, which many do initially because it is faster to stand up, cannot offer the payment method that the majority of local consumers use. Closing that gap means revisiting entity decisions the business assumed were settled. That takes time, and it costs launches.
The second is currency. Local payment infrastructure is built around local currency, and presenting prices in dollars to a consumer paying by Pix or M-Pesa introduces friction with a direct impact on conversion. Repricing in local currency is not a checkout change. It has FX and margin implications, and in some markets requires regulatory approval. The commercial team needs to work through those questions before the payments integration, not after it forces the issue.
The third is reconciliation. Southeast Asia illustrates the problem clearly: Indonesia, Thailand, Vietnam and Malaysia each run their own payment rails, regulatory frameworks and settlement systems. QRIS, PromptPay, VietQR and DuitNow are not regional variants of the same infrastructure. They are entirely distinct systems shaped by different central banks and different consumer habits. A merchant that treats Southeast Asia as a single market will build for one and find they have built for none. Finance teams that don’t account for this fragmentation from day one tend to find themselves constructing reconciliation workarounds once volume arrives. Those workarounds rarely survive contact with growth.
Ask the payments question early
The real problem is that none of this is even visible if you arrive assuming the payments problem is a familiar one. Traditionally, merchants leave payments to the end because that is where it belongs in the developed markets they know.
The merchants that get it right tend to be the ones who ask the payments question early enough that the answer can still shape everything else: entity structure, pricing, finance operations. The infrastructure in these markets doesn’t accommodate late decisions. It just exposes the consequences of them later, when the decisions that needed to account for payments have already been made.
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