Why Fintech Growth Still Depends on Physical Infrastructure

Over the past decade, digital financial services have expanded rapidly across emerging markets. From mobile wallets to embedded finance and open banking, the technical possibilities have matured. Yet even as apps grow more sophisticated, real-world constraints persist. 

Fintech development has, in many cases, outpaced the environments it seeks to transform. Product roadmaps accelerate, but user uptake remains uneven. In high-growth developing regions, platforms often encounter limits because physical infrastructure and behavioural habits lag behind digital ambition. According to a recent Bank for International Settlements report, cashless payments per capita in emerging markets rose by 29% in 2023, while cash withdrawals remained stable, underscoring cash’s enduring role in everyday transactions.

This gap is most visible where innovation meets inclusion. While KYC automation, digital credit evaluation, and real-time payment define today’s fintech landscape, large segments of the population continue to rely on cash and remain only partially connected to digital networks. 

Bridging this divide isn’t just a product challenge — it’s a question of rethinking business models and understanding behaviours that define how financial systems are used in practice. The next wave of fintech growth will likely come not from entirely new products, but from seamless integration with existing environments.

Aligning Innovation with Access

There’s a tendency in fintech to view progress as linear: build a better interface, streamline a process, then scale. But scale does not occur in a vacuum. It depends on systems — economic, social, and physical — that enable people to adopt new services.

​​While technology providers focus on scalability, user experience, and automation, many target users remain disconnected from digital platforms—by choice, by necessity, or by lack of access. Smartphone penetration, mobile data costs, trust in digital services and even basic identification systems vary drastically from one market to another. The result is a fundamental mismatch between how fintech solutions are perceived and how users can realistically access them.

This doesn’t mean fintech has failed. It means the next phase of growth will require a deeper understanding of what stands between product and participation. True scale will come not from adding yet another feature, but from integrating digital services into existing ecosystems, habits and touchpoints that people already trust.

Rethinking Integration

Future fintech success in emerging markets hinges on how well digital services integrate within hybrid ecosystems — part online, part cash-based. 

Self-service kiosks. Once dismissed as transitional, kiosks are re-emerging as cost-efficient conduits in low-connectivity environments. By reducing dependency on smartphones, they allow users to deposit or withdraw funds, pay bills and access digital platforms without owning a device or enduring high data costs. In regions where trust in apps remains low, a visible, physical kiosk lends credibility that purely digital interfaces cannot match.

Agent networks. Leveraging local agents — such as corner shops, post offices or telecom retailers — enables assisted onboarding and cash-in/cash-out services. These networks bridge the trust gap through face-to-face interactions, helping users navigate KYC procedures and building confidence. In several markets, well-incentivised agents have been shown to increase onboarding rates by up to 50%, while reducing customer acquisition costs significantly.

In each case, the goal is to reduce friction between cash and code — making digital finance an extension of, not a total replacement for, everyday routines.

A Broader View of Infrastructure

The core challenge is not to digitise everything immediately, but to design for coexistence — to accept that cash economies and physical touchpoints will remain part of the financial ecosystem for years to come.

This calls for more adaptable systems: infrastructure that respects existing behaviours; interfaces that support low-data and low-trust environments; and products that don’t assume continuous connectivity or seamless onboarding, but instead offer alternate routes into formal finance.

To succeed, fintech must embrace a hybrid model that harmonises digital innovation with established physical pathways. Each market demands its own balance. Too often, solutions are imported wholesale, ignoring local dynamics. By designing systems that respect existing behaviours and environments, fintech can transform promise into participation.

Building for Context

Fintech is often described as the convergence of finance and technology. Today, the critical convergence is between digital ambition and physical execution. A superior product means little if it cannot reach the right users, in the right context, at the right time. As fintech matures, the focus shifts from invention to integration.