As the leaders of the BRICS group of nations gather this week in Brazil (now that the World Cup crowds are gone), I’ve asked myself if that meeting has any important implications for payments. The BRICS moniker is often applied to a group of countries that share the characteristics large, young populations and high economic growth rates, Brazil, Russia, India, China and South Africa.
The BRICS share another characteristic, fast growing payment markets along with their economies, cash evolving toward electronic payments and young populations coming of age and, ideally, gaining access to formal banking and financial services.
These fast growing payment markets didn’t simply materialize spontaneously from the blessing of competition. Each of the five countries has undergone focused national efforts on payment system improvements.
Brazil. Brazil totally revamped its payments systems around 15 years ago and has slowly made additional improvements. Currently they are focused on fostering a new interoperable environment for mobile payments.
Russia. In recent years Russia has been developing a national identity/payment card that appears to have regained lost momentum against despite the backdrop of geopolitical sanctions and related commercial tensions with the global card networks.
India. India also has a national identity card that will enable payments and has focused its energies on new, truly national payment platforms and standards.
China. China has created a new platform for lower value credits and debits as well as an extension of that platform toward making online payments from bank accounts in real time. Don’t forget that the China UnionPay card network has reached global status in just over a decade under state-level sponsorship.
South Africa. And certainly not least, South Africa finds itself at the center of a much larger regional initiative to improve payments in the Southern African region.
It’s also worth noting that Brazil, India and South Africa each have real time capability for retail payments. Hello USA?
In case you haven’t heard, the new group of fast growing countries is sometimes called MINT, including the countries of Mexico, Indonesia, Nigeria, Turkey (among other favorite acronyms for this category) but they haven’t yet organized their own summit as far as I know.
Are such state sponsored payments improvements the way to go? Am I prophesying that the end is near for private sector innovation in payments? Certainly not, or at least I hope not. My sample of five countries is too small to draw any fundamental conclusions but it is notable that these countries have concerted payments policies that focus both public and private energies on enabling the payments environment in ways that uncoordinated efforts do not.
This post was written by Glenbrook’s Elizabeth McQuerry.
