BRICS Fintechs Are Scaling—But Will They Ever Be Trusted?
BRICS Fintechs Are Scaling—But Will They Ever Be Trusted?
BRICS Fintechs Are Scaling—But Will They Ever Be Trusted?
BRICS fintechs scale fast at home, but weak data rules, state ties and regulatory uncertainty block trust abroad, confining global reach and influence worldwide.
Described as “the new gold” by Kristalina Georgieva in 2020, BRICS Fintechs are expanding at huge scale, with countries like India and China now running some of the largest digital payment systems on the planet. Five years on, however, trust remains limited, and while BRICS Fintechs grow steadily at home, they struggle to gain trust abroad. Concerns surrounding political influence and data risks, as well as inconsistent regulation, limit almost all ability to gain any real traction outside their countries of origin. Put simply, outside markets worry about how these firms manage data, and how tightly they are tied to state power. Additionally, and perhaps most importantly, regulators heavily question the predictability of rules within the BRICS alliance and are unsure of how the implementation of vastly different political systems affects financial systems. The real question is, can firms built in these environments win trust outside their home markets? Or will they remain regional?
BRICS Fintechs, however, did not expand organically within a neutral institutional environment. Rather, their domestic growth is almost a direct result of state intervention, whether it be through permissive regulatory treatment or even incorporation into public funding infrastructures. In India, the United Payments Interface operates as a nationally embedded payments system, integrated into everyday payment transactions through public sector sponsorship and enforced interoperability. Similarly, China’s dominant payment platforms operate within a system where oversight and data access remain subject to party authority. Arrangements such as this do allow for accelerated growth through convenience factors; however, they do also drastically narrow the gap between private platforms and political power, a feature boding real consequences once these systems attempt to move beyond their own borders.
In Western financial systems, trust is determined through regulation as opposed to innovation or scale. Confidence in firms is based on the predictability of rule enforcement, as well as the legal restraints that limit state intervention in markets. The fintech firms operating within these systems gain a competitive advantage from the regulatory environment of their home countries, as they can be assessed by foreign investors or regulators regarding the reputation of their system's regulatory institutions rather than just assessing their individual behaviour. Conversely, many financial markets in the BRICS states have more significant state involvement in financial markets and greater flexibility in implementing regulatory discretion. While this regulatory framework is likely to affect the acceptance of local fintech firms in foreign markets (e.g., how they are perceived), it will not prevent fintech firms from being able to operate within their respective domestic markets. Nonetheless, since many foreign regulators and financial institutions view the application of the rules of BRICS financial markets as uncertain, the degree of caution they take when engaging with them, limits their ability to accept fintech firms from BRICS into other jurisdictions.
Data governance sits at the centre of these trust concerns. The access to transaction and user data that fintech platforms rely upon is dependent on legal frameworks that govern how companies have access to and store such data, and this creates an issue for foreign regulators with respect to access to and storage of such data. In many BRICS nations, the state is provided with broad legal authority over corporate data, often based on security or public interest provisions. In China, as a result of its National Intelligence Law (2017), the government may request that the state obtain access to data held by private firms pursuant to national security legislation. Additionally, implementation of the Data Security Law (2021), meant cross-border data transfers are subject to approval from the Chinese Government. Similarly, India has taken steps toward requiring data localisation for certain financial data, thereby limiting where payment information may be stored and processed. In 2018, the Government introduced the RBI data location circular which required all outgoing payment data to be stored in India. For regulators beyond the BRICS, it is the legal backstops that create the framework for where data can ultimately be accessed legally. It matters little whether or not a fintech firm operates independently in practice, as uncertainty about how data rules will be enforced in various political jurisdictions limits confidence and promotes caution in cross border interactions.
As a result, BRICS Fintechs have generally had to expand through controlled frameworks. Typically, firms enter regional markets through open competition; however, due to the aforementioned issues, BRICS Fintechs tend to expand through bilateral agreements. Cross-border access is typically pitched as a means of remittance, a trade settlement or even a tourism payment, in which case exposure is limited and supervision is transparent. This type of expansion facilitates the international operation of the fintech system without being universally accepted by the regulators and agencies of the destination country. Its banks and regulators can buy into the platform on a restricted basis, with similar ease of dis-engagement and reduction of risk. Thus, BRICS Fintechs operate internationally but only under the guise of access promoting and protecting more limited, stable goals.
India's UPI illustrates this precisely: a BRICS fintech that scaled domestically but attempts international expansion only under limited conditions. By 2024, UPI linked banks and businesses were processing over 12 billion transactions per month, making it one of the globe’s largest real-time payment networks. Its domestic scaling has relied upon state support through the Reserve Bank of India and compulsory interoperability for banks and providers. Internationally, however, the scaling has taken a much more limited form. UPI has not traveled through open market expansion, but instead through bilateral payment linkages such as the UPI–PayNow link to Singapore in 2023 and subsequent agreements with the UAE and Nepal to facilitate remittances and traveler retail payments. These corridors enable UPI to function abroad in certain situations while tied to this more formal agreement between central banks. It works internationally, but only under specific circumstances, which suggests that scaling is easier to export than institutional trust.
Brazil’s Pix system offers a useful contrast. Established in 2020 and regulated by the Central Bank, Brazil’s Pix payment system quickly grew to achieve more than 160 million users domestically by 2024. Success, however, has come from centralised control and an obligatory framework for banks. Abroad, adoption has been patchy. Cross-border applications have mostly been experimental and on a small scale, and foreign banks are reluctant to become part of a payments system with a domestic regulatory and compliance underpinning. Like UPI, it works well at home but struggles to grow internationally—and once again, there’s a clear link between efficiency of operation and lack of external engagement.
To return to the question, the BRICS Fintech experience suggests that scale and trust operate according to different logics. They have domestic support for ease of operation, which means state coordination, regulatory tolerance, and national financial infrastructure support that stimulates widespread use. Outside their domestic applications, however, usability depends upon external perceptions of regulation, data stewardship and institutional reliability. If UPI and Pix are reliable enough to work and provide successful limited international operation, it is clear that they can function without deeper integration through concerns of legal jurisdiction and stabilisation of rules that may change. These are the two systemic vulnerabilities that emerge. Until they're addressed in some way, BRICS Fintech will continue to have expanded reach but will not foster trust that makes them reliable for international use, establishing them as regional leaders but limiting their global impact.
Described as “the new gold” by Kristalina Georgieva in 2020, BRICS Fintechs are expanding at huge scale, with countries like India and China now running some of the largest digital payment systems on the planet. Five years on, however, trust remains limited, and while BRICS Fintechs grow steadily at home, they struggle to gain trust abroad. Concerns surrounding political influence and data risks, as well as inconsistent regulation, limit almost all ability to gain any real traction outside their countries of origin. Put simply, outside markets worry about how these firms manage data, and how tightly they are tied to state power. Additionally, and perhaps most importantly, regulators heavily question the predictability of rules within the BRICS alliance and are unsure of how the implementation of vastly different political systems affects financial systems. The real question is, can firms built in these environments win trust outside their home markets? Or will they remain regional?
BRICS Fintechs, however, did not expand organically within a neutral institutional environment. Rather, their domestic growth is almost a direct result of state intervention, whether it be through permissive regulatory treatment or even incorporation into public funding infrastructures. In India, the United Payments Interface operates as a nationally embedded payments system, integrated into everyday payment transactions through public sector sponsorship and enforced interoperability. Similarly, China’s dominant payment platforms operate within a system where oversight and data access remain subject to party authority. Arrangements such as this do allow for accelerated growth through convenience factors; however, they do also drastically narrow the gap between private platforms and political power, a feature boding real consequences once these systems attempt to move beyond their own borders.
In Western financial systems, trust is determined through regulation as opposed to innovation or scale. Confidence in firms is based on the predictability of rule enforcement, as well as the legal restraints that limit state intervention in markets. The fintech firms operating within these systems gain a competitive advantage from the regulatory environment of their home countries, as they can be assessed by foreign investors or regulators regarding the reputation of their system's regulatory institutions rather than just assessing their individual behaviour. Conversely, many financial markets in the BRICS states have more significant state involvement in financial markets and greater flexibility in implementing regulatory discretion. While this regulatory framework is likely to affect the acceptance of local fintech firms in foreign markets (e.g., how they are perceived), it will not prevent fintech firms from being able to operate within their respective domestic markets. Nonetheless, since many foreign regulators and financial institutions view the application of the rules of BRICS financial markets as uncertain, the degree of caution they take when engaging with them, limits their ability to accept fintech firms from BRICS into other jurisdictions.
Data governance sits at the centre of these trust concerns. The access to transaction and user data that fintech platforms rely upon is dependent on legal frameworks that govern how companies have access to and store such data, and this creates an issue for foreign regulators with respect to access to and storage of such data. In many BRICS nations, the state is provided with broad legal authority over corporate data, often based on security or public interest provisions. In China, as a result of its National Intelligence Law (2017), the government may request that the state obtain access to data held by private firms pursuant to national security legislation. Additionally, implementation of the Data Security Law (2021), meant cross-border data transfers are subject to approval from the Chinese Government. Similarly, India has taken steps toward requiring data localisation for certain financial data, thereby limiting where payment information may be stored and processed. In 2018, the Government introduced the RBI data location circular which required all outgoing payment data to be stored in India. For regulators beyond the BRICS, it is the legal backstops that create the framework for where data can ultimately be accessed legally. It matters little whether or not a fintech firm operates independently in practice, as uncertainty about how data rules will be enforced in various political jurisdictions limits confidence and promotes caution in cross border interactions.
As a result, BRICS Fintechs have generally had to expand through controlled frameworks. Typically, firms enter regional markets through open competition; however, due to the aforementioned issues, BRICS Fintechs tend to expand through bilateral agreements. Cross-border access is typically pitched as a means of remittance, a trade settlement or even a tourism payment, in which case exposure is limited and supervision is transparent. This type of expansion facilitates the international operation of the fintech system without being universally accepted by the regulators and agencies of the destination country. Its banks and regulators can buy into the platform on a restricted basis, with similar ease of dis-engagement and reduction of risk. Thus, BRICS Fintechs operate internationally but only under the guise of access promoting and protecting more limited, stable goals.
India's UPI illustrates this precisely: a BRICS fintech that scaled domestically but attempts international expansion only under limited conditions. By 2024, UPI linked banks and businesses were processing over 12 billion transactions per month, making it one of the globe’s largest real-time payment networks. Its domestic scaling has relied upon state support through the Reserve Bank of India and compulsory interoperability for banks and providers. Internationally, however, the scaling has taken a much more limited form. UPI has not traveled through open market expansion, but instead through bilateral payment linkages such as the UPI–PayNow link to Singapore in 2023 and subsequent agreements with the UAE and Nepal to facilitate remittances and traveler retail payments. These corridors enable UPI to function abroad in certain situations while tied to this more formal agreement between central banks. It works internationally, but only under specific circumstances, which suggests that scaling is easier to export than institutional trust.
Brazil’s Pix system offers a useful contrast. Established in 2020 and regulated by the Central Bank, Brazil’s Pix payment system quickly grew to achieve more than 160 million users domestically by 2024. Success, however, has come from centralised control and an obligatory framework for banks. Abroad, adoption has been patchy. Cross-border applications have mostly been experimental and on a small scale, and foreign banks are reluctant to become part of a payments system with a domestic regulatory and compliance underpinning. Like UPI, it works well at home but struggles to grow internationally—and once again, there’s a clear link between efficiency of operation and lack of external engagement.
To return to the question, the BRICS Fintech experience suggests that scale and trust operate according to different logics. They have domestic support for ease of operation, which means state coordination, regulatory tolerance, and national financial infrastructure support that stimulates widespread use. Outside their domestic applications, however, usability depends upon external perceptions of regulation, data stewardship and institutional reliability. If UPI and Pix are reliable enough to work and provide successful limited international operation, it is clear that they can function without deeper integration through concerns of legal jurisdiction and stabilisation of rules that may change. These are the two systemic vulnerabilities that emerge. Until they're addressed in some way, BRICS Fintech will continue to have expanded reach but will not foster trust that makes them reliable for international use, establishing them as regional leaders but limiting their global impact.
Described as “the new gold” by Kristalina Georgieva in 2020, BRICS Fintechs are expanding at huge scale, with countries like India and China now running some of the largest digital payment systems on the planet. Five years on, however, trust remains limited, and while BRICS Fintechs grow steadily at home, they struggle to gain trust abroad. Concerns surrounding political influence and data risks, as well as inconsistent regulation, limit almost all ability to gain any real traction outside their countries of origin. Put simply, outside markets worry about how these firms manage data, and how tightly they are tied to state power. Additionally, and perhaps most importantly, regulators heavily question the predictability of rules within the BRICS alliance and are unsure of how the implementation of vastly different political systems affects financial systems. The real question is, can firms built in these environments win trust outside their home markets? Or will they remain regional?
BRICS Fintechs, however, did not expand organically within a neutral institutional environment. Rather, their domestic growth is almost a direct result of state intervention, whether it be through permissive regulatory treatment or even incorporation into public funding infrastructures. In India, the United Payments Interface operates as a nationally embedded payments system, integrated into everyday payment transactions through public sector sponsorship and enforced interoperability. Similarly, China’s dominant payment platforms operate within a system where oversight and data access remain subject to party authority. Arrangements such as this do allow for accelerated growth through convenience factors; however, they do also drastically narrow the gap between private platforms and political power, a feature boding real consequences once these systems attempt to move beyond their own borders.
In Western financial systems, trust is determined through regulation as opposed to innovation or scale. Confidence in firms is based on the predictability of rule enforcement, as well as the legal restraints that limit state intervention in markets. The fintech firms operating within these systems gain a competitive advantage from the regulatory environment of their home countries, as they can be assessed by foreign investors or regulators regarding the reputation of their system's regulatory institutions rather than just assessing their individual behaviour. Conversely, many financial markets in the BRICS states have more significant state involvement in financial markets and greater flexibility in implementing regulatory discretion. While this regulatory framework is likely to affect the acceptance of local fintech firms in foreign markets (e.g., how they are perceived), it will not prevent fintech firms from being able to operate within their respective domestic markets. Nonetheless, since many foreign regulators and financial institutions view the application of the rules of BRICS financial markets as uncertain, the degree of caution they take when engaging with them, limits their ability to accept fintech firms from BRICS into other jurisdictions.
Data governance sits at the centre of these trust concerns. The access to transaction and user data that fintech platforms rely upon is dependent on legal frameworks that govern how companies have access to and store such data, and this creates an issue for foreign regulators with respect to access to and storage of such data. In many BRICS nations, the state is provided with broad legal authority over corporate data, often based on security or public interest provisions. In China, as a result of its National Intelligence Law (2017), the government may request that the state obtain access to data held by private firms pursuant to national security legislation. Additionally, implementation of the Data Security Law (2021), meant cross-border data transfers are subject to approval from the Chinese Government. Similarly, India has taken steps toward requiring data localisation for certain financial data, thereby limiting where payment information may be stored and processed. In 2018, the Government introduced the RBI data location circular which required all outgoing payment data to be stored in India. For regulators beyond the BRICS, it is the legal backstops that create the framework for where data can ultimately be accessed legally. It matters little whether or not a fintech firm operates independently in practice, as uncertainty about how data rules will be enforced in various political jurisdictions limits confidence and promotes caution in cross border interactions.
As a result, BRICS Fintechs have generally had to expand through controlled frameworks. Typically, firms enter regional markets through open competition; however, due to the aforementioned issues, BRICS Fintechs tend to expand through bilateral agreements. Cross-border access is typically pitched as a means of remittance, a trade settlement or even a tourism payment, in which case exposure is limited and supervision is transparent. This type of expansion facilitates the international operation of the fintech system without being universally accepted by the regulators and agencies of the destination country. Its banks and regulators can buy into the platform on a restricted basis, with similar ease of dis-engagement and reduction of risk. Thus, BRICS Fintechs operate internationally but only under the guise of access promoting and protecting more limited, stable goals.
India's UPI illustrates this precisely: a BRICS fintech that scaled domestically but attempts international expansion only under limited conditions. By 2024, UPI linked banks and businesses were processing over 12 billion transactions per month, making it one of the globe’s largest real-time payment networks. Its domestic scaling has relied upon state support through the Reserve Bank of India and compulsory interoperability for banks and providers. Internationally, however, the scaling has taken a much more limited form. UPI has not traveled through open market expansion, but instead through bilateral payment linkages such as the UPI–PayNow link to Singapore in 2023 and subsequent agreements with the UAE and Nepal to facilitate remittances and traveler retail payments. These corridors enable UPI to function abroad in certain situations while tied to this more formal agreement between central banks. It works internationally, but only under specific circumstances, which suggests that scaling is easier to export than institutional trust.
Brazil’s Pix system offers a useful contrast. Established in 2020 and regulated by the Central Bank, Brazil’s Pix payment system quickly grew to achieve more than 160 million users domestically by 2024. Success, however, has come from centralised control and an obligatory framework for banks. Abroad, adoption has been patchy. Cross-border applications have mostly been experimental and on a small scale, and foreign banks are reluctant to become part of a payments system with a domestic regulatory and compliance underpinning. Like UPI, it works well at home but struggles to grow internationally—and once again, there’s a clear link between efficiency of operation and lack of external engagement.
To return to the question, the BRICS Fintech experience suggests that scale and trust operate according to different logics. They have domestic support for ease of operation, which means state coordination, regulatory tolerance, and national financial infrastructure support that stimulates widespread use. Outside their domestic applications, however, usability depends upon external perceptions of regulation, data stewardship and institutional reliability. If UPI and Pix are reliable enough to work and provide successful limited international operation, it is clear that they can function without deeper integration through concerns of legal jurisdiction and stabilisation of rules that may change. These are the two systemic vulnerabilities that emerge. Until they're addressed in some way, BRICS Fintech will continue to have expanded reach but will not foster trust that makes them reliable for international use, establishing them as regional leaders but limiting their global impact.
