Payments industry challenged by soaring growth in non-cash transactions

Payments industry challenged by soaring growth in non-cash transactions

Non-cash payments volumes are expected to increase by nearly 10% percent to reach 366 billion transactions in 2013, fueled by strong growth in developing markets and mobile payments, according to the 10th annual World Payments Report from Capgemini and Royal Bank of Scotland (RBS).

Overall, more than half of global non-cash payment growth comes from developing countries despite them only making up one quarter (25.5%) of the market size at 93 billion transactions. China remains a relatively underdeveloped market for non-cash transactions but its population and growth rate suggest in certain conditions that it could soon outstrip the US and Eurozone within the next five years.

William Higgins, managing director of payments, RBS, says: "China is one to watch over the coming years, with the report showing that if growth rates remain at the current high level, it could become the largest market for non-cash transactions within just five years. These soaring growth rates in key markets put pressure on the global payments arena to innovate to meet rapidly increasing consumer demand."

Alongside China, growth rates for Central Europe, Middle East & Africa (CEMEA) followed closely at 23.8%, emerging Asia at 22.8%, and Latin America at 11.0 %.

Despite high growth in developing markets, the US and the Eurozone are still ahead in the number of non-cash transactions made per inhabitant. Finland, with 448 transactions per person per annum, continues to be a clear leader and recorded growth of 10.6% during 2012, outstripping other nations in Europe and North America. The US has the second highest number of non-cash transactions per inhabitant, at 376, but grew by only 2.6% for 2012.

Increased use of tablets and smartphones is creating a convergence of e- and m- payments, posing new challenges for Payments Services Providers (PSPs), states the report. In 2015, m-payments are projected to grow at 60.8% while e-payments growth is forecast to decelerate to 15.9% annually over the next year, as more people use mobile devices to make payments.

This trend is adding to the pressure on PSPs to modernise their payments processing infrastructures, ideally based around a single integrated payments platform for corporate and retail payments and a central hub.

The growth of the industry coupled with the fast pace of new regulation requires flexibility from PSPs to adapt, states the report, citing initiatives such as real-time payments, pressure on card interchange fees and improved payments governance as examples of cascading regulation.

The report is available for download at

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