World Payments Report shows strong consumer demand for digital payments

Digital payments are experiencing a boom, according to the World Payments Report 2018 launched today by Capgemini and BNP Paribas

The report forecasts that noncash transactions will post a compound annual growth rate of 13 percent until 2021, following growth of 11 percent in 2015-2016, when the total volume of noncash transactions reached 483 billion.

This boom is being driven by developing markets, with CAGR in Russia (37 percent), India (33 percent) and China (26 percent) most notable during 2015-2016. Mature markets maintained steady growth of more than 7 percent, according to the report.

For the next five years, developing markets are set to show a 22 percent CAGR, led by Asia at 29 percent. By 2021, developing markets are expected to account for approximately half of all noncash transactions, overtaking mature markets, whose current share stands at 66 percent.

Still, regulatory and technical complexity present challenges to new payments ecosystems.

Executives surveyed said that lack of interoperability between schemes (74 percent) and weak standardization of data and authorization (59 percent) were inhibiting adoption of a real-time payments infrastructure.

Regarding distributed ledger technology, or blockchain, 86 percent of executives cited lack of interoperability as a limiting factor; 83 percent pointed to a lack of regulatory clarity; and 77 percent questioned scalability.

Only 38 percent of bank executives surveyed for the report said they were «planning an anchor role» in new payments ecosystems, a stance they might want to rethink, according to Anirban Bose, CEO of Capgemini Financial Services and member of the group executive board.

«With their significant market share in the payments industry and implementation of new technologies, banks are in a unique position to shape the marketplace,» he said. «They can also create new revenue streams through innovative, collaborative relationships with fintechs and active participation by the broader financial services community.»

Source: ATM Marketplace