A few days ago, I read yet another post celebrating how emerging economies “leapfrogged” straight into instant payments. The logic was familiar: no legacy cards → pure innovation → global lesson. The explanation is tidy. These markets had card ecosystems (sometimes large ones) structured similarly to how card systems tend to operate in lower-income environments. The top of the pyramid is accessible only to those who can afford the scheme’s logic. Here lies a harsh reality in the Card Model expansion:
Many of these economies rejects the card model based on Western businesses.
Yet the Western card model increasingly needs these economies to justify itself.
So why do we keep telling the story as if the cards were never there?
And why does the “leapfrog” narrative feel so comforting to Western payment actors?
This essay is an attempt to unpack that contradiction: to look at how the leapfrog story emerged, what it hides, and what it reveals about the power dynamics shaping global payments today.
The Assumption: The Leapfrog Story and Its Comforts
Interestingly, if we look from a broader economic perspective, the leapfrog, as it was theorised in 1983, should happen when an old technology has become monopolistic and reduced the incentive to innovate. Then, the second condition introduces, at the same time, a rent system in which the participants are not really keen to move forward. The concept was coined by four economists: Fudenberg, Gilbert, Stiglitz and Tirole (Notes: Stiglitz and Tirole later both earned a Nobel Prize in Economics) (see Wiki article)
Global Schemes dominate the Payments Industry with their duopolistic approach to payments. Plus, they do not offer a radical reinvention of their job. To those who will talk about “tokenisation” as an example of innovation, I will answer no. Those are examples of “industrial optimisations”, but not a radical change in the way money flows in retail payments.
In a sense, Schemes already tick the box for others to “leapfrog”
The flattering Narrative from Western Payments Actors
But the idea that emerging economies “leapfrogged” the “card era” has become so common in Western payment discourse that it functions almost like a reassuring and convenient explanation: they skipped a stage we are trapped in; they moved faster because they had less to untangle
It is a self-reassuring narrative. But developed economies could have shifted their payment infrastructure by innovating; actually, they did try (PSD II tried to impose open banking, but so far with disappointing results, as it keeps the Card-logic expansion model at the centre of their story).
In this framing, this narrative remains the natural reference point: the baseline of what a modern payment infrastructure should be. Emerging economies become the “agile exceptions”: countries that somehow exceeded expectations, not by challenging the model, but by avoiding its constraints.
It is flattering on both sides. Western actors can maintain the idea that their system remains the global standard, and emerging economies are patronised for their “efficiency,” even if the compliment carries a quiet implication: “You innovated because you had no choice.”
An Excuse for being slow and late?
But by ignoring those card ecosystems, the leapfrog story protects a more fragile belief:
Everyone is ultimately heading toward the same destination, just at different speeds and sequences.
It gives an excuse for Western systems for being slow to offer diversity outside card scheme-based payment methods, and for Western companies for being late in updating their offer.
And it preserves the illusion that the global trajectory of the card model expansion still points toward a global scheme-centric model, even when entire regions have already stepped off that path for their domestic payments, and even sometimes thinking about stepping off for regional or cross-border retail payments.
This is why the leapfrog narrative feels so comfortable; Diverging becomes “Accelerating”. The sovereign choice becomes an accidental advantage.
And finally, it keeps the Western perspective safely positioned as the universal lens, rather than simply one of many ways to build payments.
But once you start examining what actually happened on the ground, this tidy framing dissolves.
What emerges instead is not a shortcut, but a completely different direction. So, leapfrog, although theoretically solid and backed by evidence, should be deconstructed.
The Deconstruction: When Card Markets Exist but Don’t Define the System
Once we move past the comforting leapfrog narrative, the first thing that becomes clear is this:
Emerging economies did not reject cards and global schemes because they never had them.
They rejected the scheme-based system because of the way card systems naturally behave in their environments.
Plastic existed, even in Emerging Economies
Card markets existed. They were functional, but they were also structurally limited: not by lack of expertise, but by design. In lower-income contexts, the card model becomes an inverted pyramid:
- A premium layer on top, accessible to those who can absorb fees, accept scheme logic, and navigate the formal financial system.
- For the rest of the population, affording a card is a symbol of being rich. You have a credit card, a car, a fixed income and potentially a house.
We cannot really talk about a failure of adoption, but an incompatibility with the economic architecture of cards. And this is precisely why alternative infrastructures found such broad traction:
They were built for everyone, not for the segment that could afford to be customers of the Schemes. These systems are not “leapfrog innovations,” and they did not emerge organically from consumers’ frustration with paying; they could pay by cash. They were deliberate public choices, grounded in:
- the need for universal access,
- the desire for domestic control,
- the economics of low-margin retail,
- and the political imperative to integrate the whole population, not just the banked minority.
The true divergence is institutional not technological
Viewed through this lens, we cannot consider the emergence of alternatives only as “technological innovation”. It is a logical response to the structural limitations of the card model and its expensive infrastructure. Therefore, the true divergence does not come from technology, but from institutional priorities. So, it is not proper to talk about leapfrogging because technology is not at stake.
These economies decided simply not to follow the “Western” path and said, “We will make things differently and better aligned with our interests”. And this is where the real tension begins. Because if these economies built systems that serve their reality better than cards ever could, then the question naturally follows: Why does the Western card model based on expansion still need them so badly?
The Reconstruction: The Western Paradox and the True Divergence
Once we recognise that emerging economies did not skip cards but chose not to centre them, the paradox of Card model expansion emerges:
These economies do not particularly need the Western card model. Yet the Western scheme-centric model increasingly needs these economies.
Feeding the global Expansion Model
For Western payment actors, emerging economies are not just “opportunities”. They are essential to sustaining a model whose economics rely on:
- The promise of never-ending global expansion,
- The idea that merchants will always pay for “optimisation” of the whole value chain while talking about “innovation”
- The expectation that international scheme logic will eventually become universal.
The entire story of the schemes depends on showing that the world is converging toward their system, even if key regions have already diverged from it.
This is where the leapfrog narrative is so useful: divergence becomes a delayed alignment.
Western firms can interpret alternative systems not as rejections but as a workaround that will eventually circle back to their familiar rails. In other words, “they’ll need us somehow”
Threat is underneath the neat surface
But the structural reality is very different. In markets where instant payments are universal, cheap, and embedded into daily life, the idea that merchants themselves will sustain a whole economic model becomes far less credible. Once merchants stop paying, the legacy model loses its most fundamental pillar.
This is the quiet threat sitting underneath the surface. It’s not that emerging economies want to exclude Western payment actors. It’s that their domestic systems leave very little space for the extractive and siloed approach that Western actors depend on.
Too global to become domestic?
Which leads to an interesting phenomenon of card expansion model:
Western companies are racing to enter, but usually, they stay in their lane and do not impose themselves as the main business providers in those markets. Their offer is way less competitive than domestic providers that are way more integrated.
For Western firms, being in these markets is less about serving local needs and more about maintaining the global narrative that their model is still central. It also acts as a back door for Western business that wants to expand locally by offering something locally. Card providers can keep their position with their customers and limit the “commoditisation effects”.
The leapfrog story keeps this distinction hidden behind a feel-good tale of accelerated innovation.
But once the distinction is visible, the narrative resolves differently. These economies didn’t leapfrog “us”. They stepped off our path and built one that made sense for them.
What We See Depends on the Lens We Use
It’s easy to describe emerging economies as “leapfrogging.”
It gives us a sense of continuity. We want to see a world still following the path we once imagined for it. But the more closely we look, the clearer it becomes that these markets are not ahead or behind. They are simply elsewhere. And their “elsewhere” exposes something about our “here”:
How much of our understanding of payments is shaped by the assumption that our model remains the reference point?
Once that assumption dissolves, a different reality appears. One where payments are not a technology and product development journey, but also a political choice.
The innovation race idea dissolved and only remains an institutional design decision.
It should not be considered as a business opportunity to be captured, but rather to understand the political mechanism under the surface.
Perhaps the real task is not to figure out how to bring these economies back toward the Western model,
but to understand why they never needed it in the first place, and the whole implication for the economics of a business.
