How digital wallets benefit merchants and acquirers in emerging markets

To read the original article, please visit Payments Cards and Mobile.

In the first blog in this series, we looked at how digital wallets are transforming consumer finance and banking relationships in emerging markets. This blog considers how digital financial services help the banking system and businesses to grow.

First, it’s essential to understand why economic growth matters in emerging markets. All too often, emerging markets are subject to political or social instability, which can create uncertain conditions for business. By contrast, economic growth can lead to greater social stability as citizens enjoy a better standard of living, building a virtuous circle as demand for goods and services grows in response to consumer needs. In Iraq, for instance, decades of political instability are being replaced by strong economic growth, with the International Monetary Fund predicting the country will see real-terms growth of ten percent this year, following 14% in 2021.

Digital wallets play a key role in these developments, speeding up the flow of funds between businesses, governments and individuals, and making transactions cheaper, as we discussed in our first blog. For merchants, digital wallets can help boost sales as consumers no longer rely on holding cash to make a purchase, choosing instead to transact using their mobile device. Settlement times are reduced on each transaction, and the cost of each transaction is typically 40% lower than handling cash. Furthermore, the merchant can also improve its conversion rates by offering customers the opportunity to shop online.

Although e-commerce is only in its infancy in Iraq, with around US$5 billion of online sales from a population of 44.5 million, digital transactions are expected to double in the country by 2025 to reach US$10 billion – providing a lot of opportunity for merchants that get their digital offering right.

Banks: servicing merchants, expanding sales

Expansion in the e-commerce market creates an obvious opportunity for Iraq’s banks and digital wallet providers, as merchants new to online shopping and accepting digital wallets in-store seek an acquiring partner to help them with everything from acceptance to fraud prevention. Beyond this, digital wallets create huge opportunities for both bank and non-bank providers to establish relationships with consumers and offer them new services based on an analysis of how consumers use their digital wallets. Examples include micro-lending products, mortgages, buy now pay later and other lines of credit. What’s more, by offering a digital wallet providers can develop full-spectrum relationships with consumers and reduce their marketing and distribution costs.

At NassWallet, we are enabling economic development for all Iraqis through digital wallets and payment cards. As one of the first organisations to launch a wallet in Iraq and a principal issuing member of the VISA network, we have created a digital wallet solution that enables users to pay peers (P2P transfers), cash out from more than 1,000 agent locations, and make and receive government and utilities payments. We’re also building out a network of merchants that accept digital wallets online and in-store, and working with banks, government and NGOs to create a digital future for all Iraqis.

To find out more about how NassWallet is enabling economic growth and opportunity in Iraq, please visit:

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