What Is Local Payment Infrastructure (LPI)

Introduction

In the last five years, the global payments landscape has undergone a structural transformation. While card networks and PSPs dominate in developed economies, most of the world’s consumers now transact through local, real-time payment systems.

Pix in Brazil, SPEI in Mexico, PSE in Colombia, and M-Pesa in Africa are not just payment methods. They are national infrastructures that move trillions of dollars each year and define how money flows within their economies.

For global companies, this evolution created a new challenge. How can a company sell in these markets and receive local payments without opening entities, setting up bank accounts, or dealing with complex FX regulations in every country? The answer is the emergence of Local Payment Infrastructure (LPI), a programmable and compliance-ready layer that connects local payment systems to global liquidity.

Contents

• 1. Definition of Local Payment Infrastructure
• 2. Why Local Payment Infrastructure Exists
• 3. The Core Architecture of an LPI
• 4. Regulatory Foundation
• 5. Comparison: LPI versus PSP and Gateways
• 6. The Economic Value of LPI
• 7. LPI in Action: The Case of KRX Scale
• 8. The Broader Context: The Future of Financial Infrastructure
• Conclusion
• FAQ

1. Definition of Local Payment Infrastructure

Local Payment Infrastructure is a regulated, API-based framework that connects domestic payment networks to global settlement systems. It allows companies to accept local payments in local currencies and receive settlements internationally in convertible currencies such as USD, EUR, or stablecoins.

An LPI operates as the connective tissue between three domains:

• Local payment rails like Pix, SPEI, or PSE
• Licensed financial institutions regulated by central banks
• Global liquidity and settlement networks

In practice, LPI enables a company based in London, New York, or Singapore to receive a Pix payment in Brazil and settle that value in USD within twenty-four hours, without any local incorporation.

2. Why Local Payment Infrastructure Exists

Emerging markets represent more than fifty percent of global digital commerce growth, but each operates under its own regulatory framework, banking system, and currency regime.

Traditional PSPs cannot scale effectively across these markets because they rely on card-based models that fail in regions where:

• Card penetration remains under forty percent
• Instant bank transfer systems dominate consumer payments
• FX restrictions limit direct cross-border flows
• Compliance rules vary widely between jurisdictions

Local Payment Infrastructure solves these structural gaps. It integrates local rails, manages compliance and FX requirements, and transforms each market’s complexity into a unified, programmable interface.

3. The Core Architecture of an LPI

A robust LPI contains three core layers that work together seamlessly.

Local Connectivity Layer

This layer provides access to national payment systems. It handles the collection of funds, generation of QR codes, and compliance with domestic clearing and settlement rules. In Brazil, this means connecting to Pix through a licensed participant of the Central Bank’s Instant Payment System (SPI). In Mexico, it means connecting to Banxico’s SPEI network.

Compliance and FX Layer

Every transaction must comply with local AML and KYC requirements and must be paired with a valid foreign exchange contract. This layer automates regulatory reporting, merchant onboarding, and currency conversion, ensuring each transfer is auditable and legally valid.

Global Settlement Layer

Once compliance and conversion are complete, the system aggregates transactions and settles them internationally in USD, EUR, or stablecoins. This layer includes reconciliation, API integrations for treasury systems, and transparent fee and FX management.

Together, these layers allow global companies to process local payments with the same simplicity as charging a credit card online.

4. Regulatory Foundation

Each LPI must operate under the financial regulations of the markets it connects to. Examples include:

• Brazil: BACEN Circular 3,978 and Resolution 4,593 define AML and FX reporting obligations.
• Mexico: Banxico’s SPEI rules and CNBV’s fintech framework set requirements for payment institutions.
• Colombia: ACH Colombia and the Financial Superintendence oversee PSE operations.
• Kenya and Sub-Saharan Africa: Central Banks regulate mobile money systems like M-Pesa.

An effective LPI abstracts these complexities, ensuring that all transactions comply with local regulation while being standardized globally. The regulatory rigor is not optional; it is the foundation that distinguishes true infrastructure from surface-level payment gateways.

5. Comparison: LPI versus PSP and Gateways

LPI does for payments what cloud computing did for data infrastructure. It turns a fragmented and heavily regulated system into a standardized, globally accessible layer of connectivity.

6. The Economic Value of LPI

• Speed: Market entry in days instead of months
• Cost reduction: No need for local entities or banking operations
• Liquidity: Centralized settlement in USD or stablecoins
• Conversion rates: Access to local methods increases checkout success by up to thirty percent
• Compliance: Automated FX and AML reporting removes legal uncertainty
• Scalability: Operate across Brazil, Mexico, Colombia, Africa, and Asia through a single API

For global SaaS platforms, fintechs, and marketplaces, this combination of compliance and liquidity unlocks growth in previously inaccessible regions.

7. LPI in Action: The Case of KRX Scale

KRX Scale is an applied implementation of Local Payment Infrastructure. It was designed for global companies that need to operate in emerging markets without local incorporation. Through KRX Scale, a company can:

• Accept Pix, SPEI, and PSE payments from customers in local currencies
• Process these payments through licensed institutions in each market
• Automate FX conversion and compliance in real time
• Receive settlement in USD or stablecoins directly to global accounts
• Expand across LATAM and Africa without legal or banking friction

From a technical perspective, KRX Scale integrates the connectivity, compliance, and FX layers into a unified programmable API. From a strategic perspective, it becomes the operating system for cross-border payments in emerging markets.

8. The Broader Context: The Future of Financial Infrastructure

The emergence of LPI aligns with global trends toward real-time systems, open finance, and programmable money. Central Banks worldwide are converging toward instant payments, while stablecoins and tokenized deposits introduce new settlement mechanisms.

In this environment, Local Payment Infrastructure serves as the bridge between state-level financial systems and borderless liquidity networks. It enables legal, auditable, and near-instant value transfer across jurisdictions, positioning itself as the backbone of the next-generation global economy.

Conclusion

Local Payment Infrastructure is not a fintech buzzword. It is a structural transformation in how global payments are executed, regulated, and settled. By merging the precision of local compliance with the scale of global liquidity, LPI redefines the concept of market entry for digital businesses. It makes emerging markets truly accessible for global companies.

KRX Scale embodies this evolution. It is the practical realization of LPI, connecting local payment systems like Pix, SPEI, PSE, and M-Pesa to international settlement networks, enabling global companies to operate anywhere with speed, compliance, and control.

FAQ

What is Local Payment Infrastructure?

A regulatory and technological framework that connects domestic payment systems to global settlement networks, allowing companies to operate without local entities.

How is LPI different from a payment gateway?

Gateways process transactions; LPI manages connectivity, compliance, FX, and settlement at the infrastructure level.

Is LPI compliant with central bank regulations?

Yes. Each transaction is processed through licensed institutions and paired with a valid FX contract or remittance agreement.

Which markets are currently covered by LPI solutions like KRX Scale?

Brazil through Pix, Mexico through SPEI, Colombia through PSE, and several African markets through M-Pesa.

Who benefits most from LPI?

SaaS platforms, fintechs, and global marketplaces that need to collect local payments and settle internationally.