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NEWS
WPR 2016 highlights fast changing landscape
reached record levels over the last 10 years, hitting 387.3 billion during 2014, fuelled by economic growth in key countries, improved security measures such as EMV and biometrics and government incentives encouraging electronic payments in developing markets as the cost of cash continues to rise. That’s according to Capgemini and BNP Paribas’ 2016 World Payments Report (WPR). Cash is expected, however, to remain a significant payment instrument in the near future, even in markets that offer advanced digital payments.
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For the first time, China surpassed the UK and South Korea to take fourth position among the top ten markets by global non-cash transaction volumes. The research also finds that immediate payments have huge potential to drive growth as an alternative to cash and cheques, but must first overcome challenges in several areas. A senior executive of a leading clearing house comments in the report: “Immediate payment integration into core systems will allow for an explosion of new value-added services from the front end to corporates and consumers, which was not possible earlier. In essence, this could serve to bring about a collapse of all legacy payment types like checks and cash.”
More banks, meanwhile, have begun to expand their lobal non-cash payments volumes have
offerings beyond pure payment processing, and are recognising the need for FinTech partnerships in order to thrive in an increasingly digitised transaction banking environment. Complexity of the regulatory environment remains a serious obstacle, but RegTechs may help them achieve a holistic compliance vision. Developing markets have somewhat unsurprisingly experienced the highest non-cash payment growth rates, but the largest volume of growth remains in mature markets. The Asia-Pacific region saw notable growth in non-cash payments and non-cash transaction volumes, while Latin America was the only region where the percentage of card use was not expected to grow.
As for mobile payments, while retail consumers have embraced smartphones and tablets, corporates have not been so keen. More than 90% of payments industry executives surveyed for WPR 2016 agreed that adoption of mobile devices in the payments sector is low. While mobile devices cannibalised retail online payments, this is unlikely to be the case in the corporate space, where smartphones etc are expected to be mainly used to supplement online channels.
Scott Thompson
www.ibsintelligence.com © IBS Intelligence 2016
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