World Payments Report 2013 unveils strong growth in non-cash transactions and two-speed recovery for global payments industry.
Global non-cash payments volumes are expected to top 333 billion transactions in 2012 after transactions grew by 8.8% in 2011, according to the latest available data from the World Payments Report 2013 published by Capgemini and RBS.
Central Europe, the Middle East, Africa and Emerging Asia are leading the charge with growth in transaction volumes of more than 20%, while Latin America recorded growth of 14.4%. Growth in these emerging economies outpaced that of the developed markets of North America, Europe and Mature Asia, which recorded single digit growth rates, though mature markets still account for more than two-thirds of global non-cash transaction volumes with a 76.9% share.
Forecasts show, however, that for all the growth in the surging economies of Asia and Latin America, it will still take at least 10 years for emerging markets to overtake mature markets in transaction volumes.
"The unabated rise of non-cash payments is a sign of the interconnected lives we live today. With estimates showing 8.5% growth in 2012 non-cash payment transactions, that’s nearly 47 transactions per year for every man, woman and child on the planet.," said Kevin Brown, Managing Director, Global Head of Transaction Services, RBS International Banking.
"In the developing markets, mobile payments are giving more people access to financial transactions, while customer-centric innovation has helped prepaid cards and virtual currency gain traction in the more developed markets," he added.
Debit and credit cards continue to be the most popular non-cash payment instruments, ahead of e- and m-payments. Debit card use grew by 15.8% (to 124 billion transactions) globally during 201 and credit cards grew by 12.3% (to 57 billion transactions).
Assessing non-cash instruments such as e- and m-payments, prepaid cards and virtual currency (offered by banks and non-banks) and growing transaction volumes in regions such as Africa, the World Payments Report has uncovered a significant statistical ‘black hole’ due to inconsistent reporting of payments.
This inconsistency is emerging as new regions become more active and non-banks take an increasing share of the market via instruments such as e- and m- payments. Analysis in the report suggests that industry estimates of the size of the mobile payments market could be optimistically inflated by a factor of up to 50%, raising the question of whether reliable, centralised data collection is needed.
The Report calls for more statistical accountability in the industry and urges regulators to facilitate such a move. Improved statistical data collection would help payment services providers make more informed investment decisions as well as help combat future market risk.
"Reducing market risk and regulatory complexity continues to be a challenge for banks and other PSPs alike, particularly as regulations proliferate and the overlap between individual initiatives continues to increase,’ said Jean Lassignardie, Chief Sales and Marketing Officer, Capgemini Global Financial Services.
"PSPs can ‘cluster’ how they implement individual regulatory initiatives to take into account cascading effects across countries, complementary reinforcement effects and competing effects."
In North America, most new regulation is focused on transparency and customer convenience. In Asia Pacific, the regulatory focus is on standardisation and bringing new participants into the financial system. While in Europe, SEPA regulations are dominating the landscape as regulators concentrate on increasing competition and improving transparency.