Fintech in the Global South: Rewriting Regulatory Convergence in Financial Regulation

In February 2026, India’s Unified Payments Interface (UPI) processed more than 20 billion transactions in a single month, across nearly seven hundred participating banks. Nearly half of all real-time payments made worldwide in 2023 happened in India. In contrast, FedNow, the public instant payment system the United States launched in 2023, settled about 8.4 million payments in the whole of 2025, a volume UPI clears in roughly half an hour. The European Union secured universal instant euro transfers only by legislating in 2024, after years of uneven uptake. On the question of whether people can move money instantly, cheaply, and universally, the traditional financial centers now trail parts of the Global South.

UPI, like Brazil’s Pix, is an interoperable rail that moves money in seconds between accounts at payment providers (banks and non-banks), at little or no cost to users. In much of the Global North, retail payments still run largely on card networks and slower bank transfers. Why did this architecture emerge in India and Brazil rather than in traditional financial centers? In a recent article, forthcoming in the American Journal of Comparative Law, I argue that UPI is no anomaly. Comparative financial regulation is usually narrated from the Global North, with New York, London, Frankfurt, and other financial centers, as the baseline toward which the rest of the world is presumed to converge. In several domains of fintech regulation, that premise is backwards. Drawing on Kevin Davis and Mariana Pargendler’s concept of legal heterodoxy, the article shows that the Global South became a major site of regulatory invention because its regulators had to solve foundational problems of access, interoperability, fraud, and platform intermediation at speed and scale.

The article examines four domains, beginning with instant payments. UPI’s achievement is legal as much as technological. A bank-owned nonprofit under central bank oversight operates a shared interoperable rail, while banks and third-party applications compete at the interface level. Brazil went further than India’s model of a bank-owned operator and made the central bank itself the scheme owner, rule maker, and operator of Pix, the Brazilian counterpart of UPI, required large institutions to participate, and prohibited charges on individuals. Thailand’s PromptPay and Nigeria’s NIP reflect the same commitments to interoperability and broad access.

The second domain is digital banking. The Philippines created digital banks as a distinct licensing category defined by branchless, end-to-end digital delivery. Malaysia aimed its licensing framework expressly at the underserved and licensed consortia led by regional platforms under phased growth constraints. In the United States, the Comptroller of the Currency announced a fintech charter in 2016, was sued by state regulators, and never issued one. Fintechs that pursued ordinary charters fared little better. Varo spent three years and nearly $100 million before receiving its national bank charter in 2020, while Robinhood, Monzo, Brex, and Oportun withdrew their applications altogether, and charter activity began to revive only in 2025.

The third domain is loss allocation in payment fraud. Real-time settlement leaves little room for ex post correction, so the law determines in seconds who bears the loss of a scam. Brazil embedded a Special Return Mechanism into the architecture of Pix itself. Thailand combined a central fraud registry, mule account controls, and a shared responsibility framework. The United Kingdom reached mandatory reimbursement for authorized push payment fraud in October 2024, and the United States offers no general protection for customers deceived into authorizing transfers.

The fourth domain is embedded finance and non-bank intermediation. China required Ant Group to reorganize as a financial holding company, insisting that all financial activities be licensed and supervised at group level. India licenses payment aggregators that handle funds and requires lenders to keep disbursal and repayment flowing directly to borrowers rather than through intermediaries’ accounts. The costs of the American alternative surfaced when the banking-as-a-service firm Synapse collapsed in 2024, freezing the funds of over one hundred thousand users with no federal agency clearly responsible.

Two patterns emerge. The first is South to South convergence around shared design principles, among them interoperability as a baseline, central bank stewardship of core rails, proportionate licensing, and function-based oversight. Colombia’s Bre-B, launched in 2025, was modeled explicitly on Pix and UPI rather than on any American or European system, and Project Nexus is linking the instant payment systems of India, Malaysia, the Philippines, Singapore, and Thailand.

The second pattern is the reverse convergence that shows a shift in the direction of comparative attention in which Global South systems increasingly serve as reference points for reform debates in the Global North. For example, the United Kingdom’s Future of Payments Review took Brazil and India as comparators. The European Commission’s impact assessment for the Instant Payments Regulation used Pix as its cost benchmark, though the Regulation never cites it. The European Central Bank defends the digital euro in the language of payment sovereignty pioneered by Global South central banks, and is now building a link between its instant settlement service and other digital instant payment solutions such as UPI. Attention can also turn adversarial when Global South models displace Global North commercial interests, as the recent United States trade action over Pix shows. In July 2025 the United States Trade Representative opened a Section 301 investigation into Brazilian practices that included ‘advantaging its government-developed electronic payment services’. In June 2026 it determined that those practices were unreasonable, objecting to the central bank’s dual role as regulator and operator of Pix and to the rules that make participation mandatory, and in July 2026 the United States imposed an additional tariff of 25 percent on most imports from Brazil, citing the payment practices among the grounds. 

Conditions long associated with institutional weakness pushed regulators in the Global South toward solutions that Global North authorities can learn from, sometimes study and other times resist. A comparative law that treats the traditional financial centers as the natural source of legal innovation will misread where regulatory ideas are produced. The periphery has begun to help write the rules of digital finance, and learning runs in both directions.

The author’s article is available here.

Nydia Remolina is an Assistant Professor of Law at Singapore Management University, Yong Pung How School of Law.