This article was published in ICT & Health on 18 August 2025.

“A crocodile in the Yangtze” was how Alibaba’s founder described its defence against eBay’s entry to China. Alibaba, he explained, knew that China was different to what had powered eBay’s growth, and that eBay would be too confident to adjust. Alibaba did defend and eBay did not adjust. Today, Alibaba’s market cap is more than 8 times eBay’s.

Emerging markets need microtransactions

As more countries follow China’s digital journey, they too need a different approach. Microtransactions have been key in India’s software sector.

Instamojo, “the Shopify of India”, provides a platform for small businesses to set up online stores and collect payments. Instead of the hefty monthly subscriptions of Canada’s Shopify, Instamojo charges a small transaction fee per sale. The pay-as-you-go model aligns better with the cash flow of small Indian businesses, many of which operate on thin margins. 

The same holds for online education, entertainment, and ride-hailing. India’s ride-hailing services charge per ride, and some educational platforms provide individual course modules for separate fees rather than annual subscriptions. This is key to reaching a large customer base that prioritizes flexibility and avoids large upfront costs.

Europe’s emerging market needed this too

This trend isn’t unique to India. Emerging economies in Europe have demonstrated similar patterns. For example, during Spain’s period of growth, infrastructure development frequently relied on usage-based models.

Companies built roads and airports and then collected revenue through tolls and landing fees rather than securing massive government capital contracts. This approach allowed projects to proceed even when substantial upfront government funding was limited. It distributed costs over time and tied them to usage. Most importantly, the private sector bore the risk of bringing innovations to the economy quickly, sharing in the reward of a growing economy.

Companies like Abertis, which manages toll roads, and AENA, the operator of Spanish airports, utilized user fees to finance and maintain large-scale infrastructure projects. They grew into Spain’s stockmarket and across Europe.

NHS England did this with Palantir

England, with its mature economy, deployed a similar approach for its national health infrastructure. The procurement of the Federated Data Platform had a headline cap of £330 million over 7 years. But Palantir, the selected provider, and its partners, earn modular service payments and milestone payments based on the successful usage of the platform. This allows NHS England to shift the risk of delivery onto the private sector. The chosen company bears the responsibility of ensuring the platform is adopted and utilized to generate the expected value.

This approach does limit the number of companies the government can work with because the winner needs both a solid financial footing and a proven track record of successful implementation.

Digital health in Nigeria

At Patients Know Best, we’ve seen this dynamic firsthand as we expand into lower-income countries. As the world’s largest personal health records platform, with proven complex deployments in Europe, market leaders in traditional markets often approach us. When the leading Dutch university hospital asked us to serve their patients in 2012, we had to adapt to different languages, regulations and government infrastructure. When working with the Dutch government in 2017, we adapted to a payment model different to the one we had started with the government of England. In 2024, Nigeria required another approach.

In Nigeria, state governments are adopting a procurement model that empowers companies to charge usage fees rather than buying the product upfront. Lagos, the first state to initiate this process, partnered with Interswitch, a leading digital health infrastructure provider. Interswitch, in turn chose Patients Know Best to deliver the single patient record. Interswitch is Africa’s first fintech unicorn, a high effective tech company that blazed the trail for Nigeria. They needed a company experienced with large-scale infrastructure in mature markets and able to make long-term investments for emerging markets.

To effectively serve Nigeria’s health market, we and Interswitch had to adapt our business models to working with the government. By supporting Interswitch’s usage-based fees, we made our European platform financially viable for the Nigerian healthcare system. More innovation arrives more quickly for the health of this growing economy.

We swim in peace in Nigeria’s Delta. The point stands that the success of businesses in emerging markets often hinges on their ability to adapt their models to local economic conditions. Microtransactions and usage-based fees frequently offer a more sustainable and accessible path compared to traditional subscriptions, reflecting the preferences and financial constraints of the consumers in these regions. From India’s tech startups to European infrastructure projects to healthcare initiatives in Africa, the trend is clear: when it comes to emerging markets, flexibility and pay-as-you-go often win the day.