IFC launches USD 700mn guarantee initiative to expand digital payments in emerging markets

The International Finance Corporation, a member of the World Bank Group focused on the private sector, has launched a risk-sharing initiative to expand digital payment access in emerging markets. The program will help banks, fintechs and other financial institutions extend digital payments to consumers and small businesses.

What does IFC's new digital payments initiative do?

IFC is providing up to USD 700 million in guarantees to cover a portion of credit settlement risk for participating financial institutions. This is intended to help banks and fintechs offer digital payment services more easily, reaching small business owners, women entrepreneurs and people historically excluded from the formal financial system.

Why did IFC launch the guarantee initiative?

In some emerging markets, financial institutions face requirements that limit their ability to participate in global payment ecosystems. This leaves millions of people and local merchants reliant on cash and cut off from the convenience, safety and efficiency that digital payments provide.

The new initiative addresses this gap directly. By absorbing part of the credit settlement risk, IFC aims to let more institutions offer reliable digital payment services to a wider customer base.

"Expanding digital payments in emerging markets is one of the most powerful tools to create jobs and bring people into the formal economy," said IFC's Managing Director Makhtar Diop. "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. Yet too many banks and fintechs face financial requirements that limit their ability to expand digital payment services. This initiative changes that, helping businesses expand, create jobs, and bring digital payment services to those who have been left behind."

What impact does IFC expect from the initiative?

IFC expects the initiative to increase competition and improve the quality and accessibility of payment services over time. It estimates that participating financial institutions will see digital payment volumes rise by about USD 280 billion.

IFC also projects that participating institutions will issue 360 million more cards. The number of active users is expected to grow by 90 million, including 39 million women.