China ahead of UK in digital transaction volumes

europe

It should come as no surprise that digital payment volumes are continuing to increase with annual growth projected to top 10% for the first time to reach 426.3 billion transactions, according to the new World Payments Report (WPR) from Capgemini and BNP Paribas.

The volume will be up from the record-setting 8.9 percent growth in 2014 (387.3 billion transactions).

The research attributes the growth to the continuing economic growth in key markets, improvements in security standards such as increased adoption of the EMV standard and increased demand for biometric technology and initiatives aimed at making digital transactions cheaper than cash – as evidenced by the recent report from the UK that found the cost of handling debit and credit card transactions for retailers has reduced by around £159 million.

 

Developing markets are growing faster than anyone else

While growth was evident in all regions, it was developing markets that experiences the highest rates at 16.7% and mature markets growing at 6%. However, it should be pointed out that mature markets still account for 70.9% of total global volumes.

It’s been a strong performance from China, which actually surpassed the UK and South Korean digital transaction volumes, taking fourth position among the top ten markets globally, behind the U.S., Eurozone and Brazil. The country has invested very heavily in the fintech industry in recent times.

 

House of Cards

According to the report, cards remain whilst cheque usage continues to decline. Immediate payments are expected, or at least have the potential, to drive overall growth in digital transactions  – however, more effort needs to be expended to educate stakeholders, provide more value-added services, and upgrade infrastructure at merchants and corporates.

 

Banks must evolve

Not too long ago, the former chief executive of Barclays Bank, Anthony Jenkins, said in a speech at Chatham House that banks are on the verge of their “Uber moment” as technological advancements are on course to force financial institutions around the world to close their branches and possibly fire half of their workforces.

The WPR echoes that by highlighting the opportunities that lie in going digital.

“While treasurers’ fundamental expectations have not changed over recent years – control, visibility on cash, risk management – corporates increasingly expect banks to digitalise support processes such as account management, data analytics, compliance tracking, and fraud detection and prevention,” said Jean-Francois Denis, Deputy Global Head of Cash Management, BNP Paribas. “This calls for banks to accelerate their shift towards digitisation and foster a more collaborative approach.”

 

More information about the report can be found here.

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