Editor's note:Steve Villegas is Vice President of Payment Partnerships for North America at PPRO, a cross-border payment specialist company. This article reflects the author's personal views.

Over the past decade, the explosive growth of fintech has opened a new era of commerce. Payment innovations and new solutions have bridged the technology gap, connecting global consumers—including those without bank accounts—to digital markets. Many emerging markets in Asia and Latin America have made breakthrough progress in providing practical payment solutions tailored to local consumer needs.

These local payment methods (once called "alternative payment methods" until they were no longer "alternative") have adapted to the cultural and economic characteristics of each region, offering seamless and customized payment experiences. Fintech innovation has provided a shortcut for infrastructure development, enabling many countries to achieve results quickly. Some regions have even leapfrogged entire traditional financial systems. Global digitalization has not slowed down.

The transformation of payment technology has provided solutions for regions lacking what was once considered basic infrastructure. But these solutions still need to meet the actual needs of specific consumers.

PPRO's research shows that in Latin America, 38.3% of the populationis unbanked. This means payment solutions cannot rely on banking institutions or credit cards. Additionally, 17% of online transactions in Latin America are cash-based. The region has adopted various cash voucher payment methods, enabling unbanked and cash-dependent consumers to access global e-commerce. Solutions such as Argentina's RapiPago and Brazil's BoletoBancario have driven 22.9% growth in business-to-consumer (B2C) e-commerce in the region over the past year. Meanwhile, Mexico's Oxxo allows consumers to use e-commerce through local convenience stores.

A smartphone is essentially a virtual bank account.

This phenomenon is not limited to Latin America. Chinese consumers moved directly from cash to mobile payments, skipping the widespread adoption of credit cards. Mobile e-wallets far surpass credit cards in market penetration—accounting for 55.7% of online transactions, compared to just 22% for credit cards. The emergence of QR codes and payment platforms like WeChat Pay and Alipay was a direct response to consumer needs and preferences.

Mobile phones are a key reason why countries like China were able to leapfrog the card-based payment stage. With low barriers to financial access, anyone with a mobile device can participate in the exchange of funds. A smartphone is essentially a virtual bank account. GrabPay, which started as a food delivery and ride-hailing app, is now deeply embedded in the daily lives of 115 million consumers in Southeast Asia.

Across the Asia-Pacific region, internet penetration is 50.1% and smartphone penetration is 51.4%. But in Hong Kong (89.4% and 76%) and South Korea (95.1% and 94%), these numbersjump significantly. Consumers in the region have adopted mobile technology faster than other regions. Approximately 57.5% of e-commerce transactions in Asia-Pacific are completed on mobile devices.

Unbanked, underbanked, and cash-preferring consumers face challenges when shopping online. But instead of developing national banking infrastructure and struggling to promote it, payment solutions have leapfrogged this step, providing consumers with payment methods that work today.

Globally, card-based payments are no longer efficient. Around the world, local payment methods account for77% of total e-commerce spending, and this share will only continue to rise.