Digitizing merchant payments represents a major opportunity for financial services providers in developing economies because small retailers around the world accept trillions of dollars in cash payments every year. The value of the data generated by digitizing those transactions is considerable and could be an even more compelling incentive to pursue merchant payments than direct revenue opportunities from transaction fees. But while mobile money and other electronic wallets have grown rapidly to nearly 900 million accounts across 272 deployments worldwide, merchant payments have proved difficult to crack in most markets. To succeed, providers will need to recognize that cash is often a better option for merchants and their customers than a basic digital payments solution and to deliberately build more comprehensive offerings grounded in the areas where digital adds genuine value. This publication from CGAP outlines the why and how of digitizing merchant payments.