IFC launches $700m digital payments initiative for emerging markets

The International Finance Corporation (IFC), the private-sector arm of the World Bank Group, last week launched a risk-sharing initiative to help banks, fintechs and other financial institutions in emerging markets expand access to digital payments for consumers and small businesses.

The initiative could help Nigerian banks and fintechs expand digital payment services as the country’s electronic payments market continues to grow rapidly but millions of adults remain outside the formal financial system.

The initiative will initially provide up to $700 million in guarantees to cover part of the credit settlement risk faced by participating financial institutions, potentially allowing more institutions to participate in global payment networks and offer digital payment services.

IFC estimates that participating institutions across emerging markets could see digital payments increase by about $280 billion, issue an additional 360 million cards and increase their active users by 90 million, including 39 million women.

The initiative comes as Nigeria’s digital payments market reaches unprecedented levels.

Nigeria processed more than 11.2 billion electronic transactions in 2024, with a combined value exceeding ₦1.07 quadrillion, according to data cited by the Nigeria Inter-Bank Settlement System (NIBSS).

NIBSS has also begun rolling out the National Payment Stack, a new payment infrastructure designed to modernise the country’s instant-payment system. The system recorded 26.55 million transactions worth ₦1.4 trillion across 48 participating institutions during its initial rollout, NIBSS said in August.

But the rapid growth in digital transactions does not mean financial exclusion has disappeared.

World Bank data shows that about 49 million Nigerian adults aged 15 and above do not have a bank or mobile-money account.

For many Nigerians, particularly low-income consumers and small businesses, cash also remains an important part of everyday transactions. This leaves considerable room for banks, fintechs and payment companies to expand digital payment acceptance and bring more people and businesses into the formal financial system.

The IFC said financial institutions in some emerging markets face financial requirements that limit their ability to participate in global payment ecosystems. The result is that consumers and local merchants can remain dependent on cash despite the potential benefits of digital payments.

The new guarantee programme is designed to address part of that problem by reducing the settlement risk faced by participating financial institutions.

IFC Managing Director Makhtar Diop said expanding digital payments could help create jobs and bring more businesses into the formal economy.

“When a small business owner or woman entrepreneur accepts a card payment, it opens the door to more customers, more revenue, and a foothold in the digital economy,” Diop said.

He said many banks and fintechs still face financial requirements that restrict their ability to expand digital payment services.

The initiative is expected to increase competition and improve the quality and accessibility of payment services, particularly for small businesses, women entrepreneurs and people who have historically been excluded from formal financial services.

For Nigeria, where electronic payments are expanding rapidly alongside a large financial-inclusion gap, the opportunity may be less about replacing an already growing digital-payment system than bringing more consumers and small businesses into it.