Global digital payments volumes are predicted to increase by an average 10.9 percent through to 2020, reaching nearly 726 billion transactions, according to the World Payments Report 2017 (WPR 2017).
WPR 2017 released today by Capgemini and BNP Paribas, estimates that volumes generated by emerging economies will grow by 19.6 percent, or three-times the rate of mature economies whereas Emerging Asia, led by China and India, is projected to grow 30.9 percent in volumes.
Worldwide non-cash wholesale transactions by corporates, mid-sized enterprises and public authorities are estimated to record a CAGR of 6.5 percent from 2015 – 2020, or more than 122-billion wholesale transactions.
Global non-cash transaction volumes grew 11.2 percent to reach 433.1 billion during 2014-2015, the highest growth in a decade. Developing markets drove this growth with a 21.6 percent increase. Mature markets increased by 6.8 percent, a nominal rise of over 6 percent in 2014.
Despite increased adoption of digital payments, cash remains in the mainstream, especially for low-value transactions. This year’s WPR states that mobility, connected homes, entertainment, and media are expected to boost non-cash transactions in the future, as will alternate channels, including contactless, wearables, and augmented reality.
Increased digitization of corporate B2B payments is affecting regional trends. In mature APAC markets, small and medium-sized businesses are using digital invoicing, virtual cards, and cloud-based finance and accounting. In Emerging Asia, charge cards are popular among corporates to simplify and secure supply-chain payments.
“Within this new and dynamic ecosystem, payments industry participants must strategically reassess their roles,” said Anirban Bose, Head of Global Banking and Capital Markets for Capgemini.
“Banks must embrace this opportunity to enhance their offerings in collaboration with FinTechs and third-party developers. Breakthrough technologies and significant industry advances, such as Open APIs, instant payments, blockchain, and regulatory standardization, will encourage collaboration,” added Bose.
Collaboration and open systems pose security threats within corporate treasuries; however, corporations now expect their banks to help them improve their security infrastructures. In the new payments ecosystem, third-party developers interact directly with a partner banks’ customers, raising questions about data privacy, security and identifying attackers.
Bruno Mellado, Global Head of Payments and Receivables, BNP Paribas comments, “Multinational banks and corporations seek better industry wide standardization and harmony among regulations. As security issues are overcome, increased collaboration and partnership within the new payments ecosystem will create business value for corporates, banks, and FinTechs. The new ecosystem may diminish most, but not all, challenges faced by banks and corporates. Industry participants can prepare for uncertainties as the payments ecosystem develops by working with banks and partners with the appropriate expertise.”