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Non-cash transactions are growing with no end in sight

Non-cash transactions are growing with no end in sight

Ingrid van den Berg

Senior Account Manager

3 October 2014

Non-cash transactions are growing with no end in sight

 

Around the world non-cash payment transactions are popular and becoming more popular by the months. In fact, according to the 10th World Payments Report (figures from 2013) from Capgemini and the Royal Bank of Scotland non-cash payments volumes are growing and expected to increase by nearly 10% to reach 366 billion transactions in 2013. This growing number is caused by strong growth of mobile payments in developing markets.

Until 2013, developing countries have not played a major role in non-cash transactions. But now more than half of global non-cash payment growth comes from developing countries, despite the fact they only account for one quarter of the market size (93 billion transactions). China still remains a relatively underdeveloped market for non-cash transactions, but its population and growth rate are very promising. The expectation is that China could soon outstrip the US and Eurozone within the next five years.

After China’s growth rates, Central Europe, Middle East and Africa (CEMEA) followed closely at 23.8%, emerging Asia at 22.8%, and Latin America at 11%.

Despite high growth in developing markets, the US and Eurozone are still ahead in the number of non-cash transactions made per inhabitant. Finland, with a record of 448 transactions per person each year (growth of 10.6% during 2012), continues to be a clear leader among European and North American counties. The US has the second highest number of non-cash transactions per inhabitant, at 376 per year, but grew only by 2.6% in 2012.

One of the main reasons for the continuing growth of the number of non-cash payments is the increased use of tablets and smartphone. This poses new challenges for Payments Services Providers, according to the report. Expectations are that m-payments will grow at 60.8%, while e-payments growth is forecast to decline to 15.9% annually over the next year, as more people use mobile devices to process their payments.

This trend puts pressure on the PSPs to modernise their payments processing infrastructures. These infrastructures are ideally based around a single integrated payments platform for corporate and retail payments, as well as a central hub.

The growth of the entire industry combined with the amplification of new regulation requires flexibility from PSPs to adapt. Examples of cascading regulations include, initiatives such as real-time payments, pressure on card interchange fees and improved payments. The future of non-cash payments is already here. We should take advantage of it to the maximum.

The report is available for download at www.worldpaymentsreport.com.