A Different Idea of Payments in Emerging Markets
While the blockchain industry has claimed for a decade to be a solution to “bank the unbanked,” this reality has yet to take shape. Studies estimate that 49% of adults in Sub-Saharan Africa are unbanked. Numbers can be significantly lower depending on the region. For example, in South Sudan, only 6% of adults have a bank account.
For those who do have access to bank accounts, they’re stuck with unreliable and unsecured payment networks. Network outages, security breaches, long payment settlement times, and unreasonably high transaction costs are common, eroding trust in the systems and forcing people to turn to antiquated systems like cash.
Uptime is one of the most fundamentally important traits that a payments network can have. The “five nines” standard, which refers to a system’s ability to achieve 99.999% uptime, is a commonly-shared goal among infrastructure providers. However, in 2023, mobile payment platforms in emerging markets experienced a 7% failure rate, while 15% of global financial institutions were affected by payment system outages.
Payment systems are also a common target for hackers, with cyberattacks targeting payment systems surging by 19% in 2023. And, even when working smoothly, these payment systems commonly require settlement times of 3-5 business days and incur high transaction fees, hindering economic efficiency. This means that it’s easier to transact with paper money than with digital systems, hindering participation in the global economy.
Regardless of the problems hindering emerging economies, people still need and use these systems. One study estimates that e-payments in Africa will grow by 20% to reach $40 billion by the end of this year. It’s undeniable that emerging markets are growing faster than antiquated systems can keep up with.
Today, it’s estimated that only a maximum of 7% of all payments in Africa are made digitally—but growing fast. Growth is asymmetric across countries depending on existing infrastructure and governments’ readiness to try new systems.
What is undeniable, however, is that the vast majority of the economy is being run on systems desperately in need of an update. What emerging markets need is a Different Idea of payments with ADI Chain.
The solution: Blockchains as Payment Networks
The blockchain is a solution to the problems emerging markets face with payment systems, but governments need more regulatory compliance than blockchains today enable. That’s why we built ADI Chain, an Ethereum L2 built with the ZKsync stack. ADI Chain has L3 capability, so governments can deploy their own L3s with their own level of compliance. Instead of governments and payments providers having to fit their compliance needs into an existing blockchain’s infrastructure, these institutions can build their own regulatory-compliant L3 on top of ADI Chain, and benefit from transparent, instant payments.
By running on a decentralized network of nodes around the world, ADI Chain can act as resilient infrastructure that can remain fully functional even when individual nodes experience downtime.
All transactions on ADI Chain settle in seconds, compared to days in traditional systems. Plus, the network operates 24/7, ensuring that anyone can transfer money at any time. ADI Chain will also offer extremely low-cost transactions; fees on similar networks are typically less than $0.01, bringing affordable and fast payments to all users.
On an international scale, ADI Chain has the potential to serve as digital asset rails for everyone: from governments to critical utility providers to local businesses and individuals.
Reliable payments are necessary for economic prosperity, and economies are growing faster than legacy systems can keep up with. But much of the world is still operating on outdated systems that hold them back.
We’re building A Different Idea of payments. And this will bring us one step closer to A Different Idea of the future.