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Executing a market deep dive for FinTech expansion: a 4-step guide

Entering a foreign market comes with significant challenges - regardless of how successful a company is at home. Language barriers, cultural nuances, and regulatory hurdles are just a few of the difficulties that businesses may encounter. This is certainly the case when it comes to financial services and payments. As a result, many organizations choose to settle for domestic or regional growth rather than risk further expansion.


fintech market expansion payments consultancy

However, entering a foreign market - when carried out effectively - can be successfully achieved. Moreover, it can deliver substantial benefits that simply cannot be acquired by remaining in your home market. By gaining access to new customers and talent, businesses can greatly increase their revenue by expanding internationally.

45% of middle-market companies make more than half of their revenue overseas

Ambitious companies that rely heavily on payments to achieve their potential share similarities in decisive expansion activities. Our collaborative approach has already supported a multitude of firms in their efforts to enter foreign markets.

Below, we’ve included a market deep dive in four steps on one of our clients showing how they successfully expanded internationally - and how you can too.  

4-Step Market Deep-dive:

  • 1. Demographics
  • 2. Commerce landscape
  • 3. Payment landscape
  • 4. Market entry advice

1. Demographics

Some markets can be more difficult to enter than others. For example, the bigger the discrepancies between your home and target market, the more challenging you are likely to find the shift in operations. In particular, businesses that are used to relatively small, homogeneous markets in western Europe might receive quite the shock when they attempt to make in-roads in large, sprawling Asian countries like India or China.  

For example, we recently supported a major automotive firm as they looked to move into the Indian market. In terms of opportunities, the country certainly has a lot to offer. It has the seventh-largest economy in the world, the second-largest population, and growing levels of affluence. Its challenges are almost as numerous, however. 

"Whichever market a business is looking to enter, understanding the target country’s demographics is essential."

What’s more, for larger nations, a regional approach may be more suitable. In India, for example, each region is equivalent to an entire country, whether in terms of population or GDP. That’s why India is known as a country of countries. 

2. Commerce landscape

The next step that fintech firms should take when looking to enter a foreign market is gaining an understanding of its commerce landscape. Take a close look at the market dynamics to understand the size of the opportunity on offer. For example, we helped our client to single out India’s high-growth demographics, including an eCommerce market set to reach $200 billion by 2027, driven largely by a youthful population, with 75% of Indian citizens aged between 15 and 34.

We identified the most attractive market verticals and the role of marketplaces in the mobility market for our client.

ecommerce growth in india payments consultancy
e-commerce sales growth per country (2021). Source: emarketer

We then worked with our client to drive business model clarity which goes as follows:

  • Supply the client with an aligned, end-to-end digital strategy
  • Ensured that the client could achieve robust adherence to the latest regulations.

The latter, in particular, can represent particularly tricky terrain for new players. In India, eCommerce regulations are broadly supportive of new businesses, but tightly controlled and constantly evolving. They are also different depending on the exact sector that a fintech business is operating in. As such, we recommend having a lawyer that is well-versed in international trade and Indian FDI norms before making any concrete moves. 

3. Payment landscape

The Royal Bank of India (RBI) and NPCI have a strong vision enabling digital payments and promoting financial inclusion. By leveraging modern technology, a high level of security and convenience is established.

"The Indian payment landscape is one of the most innovating and vibrant digital payment landscapes on the planet."

Businesses must be aware of the dynamic regulation and offer a blend of local and global payment modes if they want to be successful. It is mandatory to support the RuPay card scheme and real-time payments via UPI-based apps like:

  • PhonePe,
  • PayTM,
  • WhatsApp Pay
  • Amazon Pay  
  • Google Pay

As with many markets, payments regulation is focused on authentication, data storage and security but, nevertheless, partnering with local PSPs and banks is recommended.

mobile payments growth india payments consultancy
Mobile payments growth rate by region. Source: Mordor intelligence

If businesses can quickly get to grips with the payments landscape in India, the potential for runaway growth is huge.

Compared to advanced markets, or even China, per capita digital payments remain low, meaning there is substantial growth potential. Again, however, the intricacies of local regulations must be grappled with. For example, there remains some ambiguity between a RBI 2019 discussion paper and March 2020 guidelines. These sorts of uncertainties will be ironed out as the market matures, so businesses will have to decide when the time is right to attempt entry. 

4. Market entry advice

Once businesses have carried out their research and formulated their business entry strategy, it’s time to gather some final advice before entering their new market. Make sure you have strategic clarity and only attempt market entry when you have defined four payments use cases. Then, you can subsequently explore other potential fintech opportunities. It’s also a good idea to enter your new market with PSPs before subsequently exploring the potential of strategic partnerships with domestic banks.

Partnering with both global PSPs and a local or regional champion with full functionality is in the majority of use cases a good idea, allowing businesses to really exude a global approach within their new market, simultaneously gaining local knowledge while retaining an understanding of broader issues.

Being able to balance the global and local demands placed on your firm when it straddles more than one national market is key to successful international expansion. It’s challenging - but certainly achievable. 

At PaymentGenes, a growth mindset is at the heart of everything we do. We can advise on the steps you need to take to successfully transfer your business abroad. 

Providing advice on demographics, regulations, and potential partnerships, we are right by your side as you bid to thrive in a new world. 

Find out more about our Market Entry, Research & Engagement consulting here

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