Global Digital Payment Transactions Set to Reach 10 Percent Growth

September 23, 2016         By: Mike Dautner

Global digital payment volumes are on an upward trajectory, with annual growth projected to top ten percent for the first time to reach a mark of 426.3 billion transactions in 2015.

This is an improvement from the record setting 8.9 percent growth back in 2014, which equaled 387.3 billion transactions.

These findings are according to the World Payments Report 2016, which was released today by Capgemini, a global leader in consulting, technology, and outsourcing, and BNP Paribas, a global banking player and recognized leader in transaction banking and cash management.

The growth behind digital payment transactions is being attributed mostly to strong economic growth in key developing countries, improved security measures such as EMV and biometrics, and government initiatives designed to encourage electronic payments in developing markets, as the cost of cash continues to increase at a rapid rate.

Developing markets also grew at an unusually rapid rate, but mature markets still account for the majority share.

Growth in digital payments occurred across all regions, with markets in an expansive state accounting for the highest rates, 16.7 percent and mature markets growing at 6.0 percent.

However, mature markets were still responsible for 70.9 percent of total global volumes.

For the first time ever in the history of the industry, China surpassed the U.K. and South Korea in digital transaction volumes.

The growth that continues to form a pattern in digital payments on the global scale presents opportunities for banks to provide such services to customers while companies also benefit from a more organized and efficient supply chain.

Cards are always a staple in everyone’s wallet, and have been on the rise since 2010, while paper checks continue to plummet.

Banks need to start thinking more digitally if they wish to retain and capture transaction banking market share.

“While treasurers’ fundamental expectations have not changed over recent years – control, visibility on cash, risk management – corporates increasingly expect banks to digitalize 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 digitization and foster a more collaborative approach.”

“FinTechs as well as the creation of Innovation Labs in banking are establishing new precedents for developing superior customer journeys,” said Anirban Bose, Head of Banking and Capital Markets, Capgemini. “The key now is in the mix of the partnerships and collaboration that can be done to drive out the most innovative digital services possible at the right ‘moments of truth’ along the customer journey.”