India’s Unified Payments Interface (UPI) has grown from processing one million transactions at its 2016 launch to 16.7 billion transactions in December 2023. UPI’s transformation of India’s payment landscape has made it a case study for academics and policymakers. But its success is part of a broader trend, where regulatory innovations in one country set off a chain reaction across economic regions.
Payment systems are the foundation for expanding financial access and driving economic growth, anchoring innovations that bridge gaps in underserved regions. Yet, the regulatory frameworks governing them do not evolve in isolation. Emerging markets frequently adopt and refine one another’s policies, shaping how businesses operate, consumers transact, and governments manage risk.
How Innovation Trends Emerge and Spread
Every financial innovation starts with a single market pioneering the concept. This country often has a unique combination of consumer demand, technological advancement, and policy foresight that allows it to lead the trend. Because this country has had more time to understand innovation, its regulators have had more opportunities to craft responsive and relevant policies, making them an ideal model for adoption in other markets.
For example, Kenya’s success with mobile money (M-Pesa) put it in a unique position to craft regulations tailored to its experience. As a result, Rwanda and Tanzania followed Kenya’s lead in shaping their mobile money frameworks. Similarly, India’s success with UPI has influenced Bangladesh and Sri Lanka to develop similar national payment infrastructures.
The Regulatory Adoption Cycle in Emerging Markets
A predictable pattern of regulation adoption emerges—innovators set the pace, early adopters follow swiftly, late adopters cautiously implement, and laggards eventually conform. This cycle is evident in payment regulations, where leading markets shape the trajectory of their regional counterparts.
This pattern reveals that businesses should not limit market intelligence to their immediate geographies. Instead, tracking regulatory pioneers provides foresight into upcoming trends, allowing firms to plan strategically and gain a competitive edge.
Regulation as a Chain Reaction: Case Studies
Digital Banking Licenses: Following Singapore’s 2016 launch of its digital banking framework, South Korea introduced its version in 2017, with Hong Kong following in 2018 and Malaysia in 2020.
Cryptocurrency Regulations: South Africa’s 2022 crypto regulations, which favor local exchanges over global ones, influenced Nigeria and Kenya in 2024, leading both to adopt localised licensing models.
Real-Time Payment Systems: India’s UPI inspired similar platforms in Brazil (Pix), Nigeria (NIBSS Instant Payment), and Kenya (Fast Payment System announced in 2023).
How Regulatory Similarities Enhance Collaboration and Innovation
When multiple nations implement similar regulations, it fosters better national and international collaboration by establishing common standards that financial institutions can work within. This improves cross-border trade, reduces regulatory friction, and makes payment system interoperability more achievable.
At the same time, overly rigid regulatory duplication can create siloed payment systems that fail to adapt to evolving global trends. Countries that implement outdated regulations without customisation risk stifling innovation rather than fostering it.
What This Means for Global Payment Systems Like SWIFT
The realization that payment ecosystems are fragmenting has pushed global networks like SWIFT to rethink their role. For decades, SWIFT dominated international transactions, but the rise of regional payment networks, such as PAPSS in Africa, Project Nexus in Asia, and Transfer365 CA-RD in Central America, has challenged its supremacy.
SWIFT has now pivoted toward leading global interoperability initiatives, but it is playing catch-up. It recently launched the SWIFT Go program to enable faster cross-border payments for SMEs and partnered with ISO 20022 to create a universal financial messaging standard. These moves signal an effort to remain relevant as emerging markets increasingly turn to domestic and regional alternatives.
The Ripple Effect of Emerging Market Innovations
As regulatory frameworks are copied and refined across regions, their impact extends beyond emerging markets. The World Bank now cites Brazil’s Pix and India’s UPI as global benchmarks, while the Bank of England has studied UPI’s architecture for modernising its real-time payment system.
Moreover, cross-border payment frameworks are emerging:
PAPSS (Pan-African Payment Settlement System): Initially launched in 2022, now expanding into the Caribbean.
Project Nexus (ASEAN Region): India, Malaysia, Thailand, and Singapore signed an agreement to integrate domestic payment systems for real-time cross-border payments.
El Salvador’s Transfer365 CA-RD: Launched in 2023, extending instant cross-border payments across Central America.
From Regulatory Followers to Global Standard-Setters
For financial institutions, these shifts demand a strategic rethink. Banks must decide whether to integrate with emerging regulatory frameworks or risk losing relevance in rapidly growing economies. Fintech firms, in turn, must weigh the choice between building market-specific solutions or creating platforms adaptable to multiple regulatory regimes.
As emerging market regulators transition from imitators to global standard-setters, the key question is no longer if regulatory waves will continue, but rather, who will define the next frontier of global payments. The trajectory suggests a shift where today’s followers may become tomorrow’s leaders in shaping financial innovation on a global scale.
About the author
Oluwaseun Yusuff is a Fintech and Payments expert, holding an MBA from the University of North Carolina’s Kenan-Flagler Business School in Chapel Hill. He writes from New York City.
