The volume of non-cash payment transactions is accelerating at a rate of 7.6 per cent year-on-year to reach a record high of 357.9 billion transactions, a report from RBS and Capgemini has found.
Asia drives growth
The major driver for the acceleration has been the increased growth of cashless payments in emerging Asia markets. Robust growth in Emerging Asia was up 22 per cent in 2013 and China saw strong growth, up by 38 per cent, when regulators opened the cards market to overseas competition.
This growth continued consistently all the way through 2014 and mobile payments volume grew by 170 per cent, moving China up to fourth place in the global league tables.
As well growth in Asia, another key driver has been the mass adoption of mobile technology in the mature markets, nudged along by the constant launches of mobile payment services such as the ‘Pays’ of Apple, Samsung and Android.
Samsung Pay notched up $30m in transactions in its first month and a recent study suggested that Apple Pay will boost awareness of contactless payments so much that the number of mobile wallets using contactless technology is expected to reach 200 million by the end of 2016, which would represent growth of more than 100 per cent in the number of mobile wallets using NFC since the end of 2014.
The report also raised the issue of hidden payments i.e. payments that are not processed through bank systems and are made through closed-loop cards, digital wallets and virtual currencies. It said that these types of payments accounted for 10 per cent, or 40 billion, of all non-cash payments. The issue, according to the report, is that they provide consumers with less protection because they create regulatory problems in terms of data privacy and money laundering.
“Technological innovation has triggered a dramatic increase in digital payments. This shift from physical to digital payments not only providers simpler, faster and secure payments for us all, it has also enabled new and progressive business models to emerge,” Marion King, RBS director of Payments, commented.
Andrew Lees, Global Sales Officer, Capgemini Financial Services said:
“Each year banks face new and greater challenges in innovating to meet consumer demands for more convenient, faster, more secure and more mobile payment methods. Facing this pressure and the need for new regulatory initiatives to support innovations like Immediate Payments, payment services providers must take a long-term approach for payments processing by building a holistic set of offerings that can deliver value on a global scale.”
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