Money & Banking

Non-cash transactions surged 14% in 2019; highest in the past decade: Capgemini Report

Prashasti Awasthi Mumbai | Updated on October 08, 2020

According to the World Payments Report 2020 by Capgemini, a global provider of consultation service, a compound annual growth rate (CAGR) of 12 per cent is expected for global non-cash transactions for 2019-23.

The report stated that global non-cash transactions surged nearly 14 per cent from 2018-19 to reach 708.5 billion transactions, the highest growth rate recorded in the past decade.

Asia-Pacific surpassed Europe and North America to become the 2019 non-cash transactions volume leader at 243.6 billion.

Report methodology

The report offered insights into 44 payments markets across various geographical regions.

More than 8,600 consumers participated in the report’s Voice of the Consumer survey. It also surveyed 235 respondents and 45 executives from banks, fintech, payment services providers, and corporates.

Digital payment services

The report noted that the increase was driven by increasing smartphone usage, booming e-commerce, digital wallet adoption, and mobile/QR-code payments innovations, led by China, India, and other SE Asian markets (31.1 per cent growth).

The report found that 30 per cent of consumers are using a BigTech for payment services, and 50 per cent are already using a challenger bank for some payments.

Furthermore, as of April 2020, more than 38 per cent of consumers said they discovered a new payment provider during the lockdown.

Internet banking and direct account transfers are still the preferred payment method throughout the global health crisis, according to 68 per cent of consumer survey respondents.

Contactless (tap-to-pay) cards came in second, with 64 per cent of saying they used them often. Digital wallets (including QR based payments) were the preferred choice of 48 per cent of respondents.

The report speculated that the digital wallet users could jump from 2.3 billion in 2019 to 4 billion by 2024 — 50 per cent of the world’s population.

Invisible payments or automated payment processes such as those found in Amazon Go stores and Uber are on pace to reach a 51 per cent CAGR between 2017-22, as per the estimates.

Digital payment risk

However, payments executives also fear the risk involved with the digital payment system.

They stated that businesses are exposed to risks such as cybersecurity (42 per cent), regulatory (37 per cent), operational (35 per cent), and business (30 per cent).

87 per cent of executives feel they face a high likelihood of cyber vulnerabilities, as criminals are exploiting exposures opened by the Covid-19 lockdown, which increases the risk of cyberattacks, money laundering, and terrorist financing.

Payments firms are actively turning to technology to help alleviate exposure to new risks.

Commenting on the report, Anirban Bose, CEO of Capgemini’s Financial Services and Group Executive Board member said in an official statement: “Covid-19 has accelerated the rate of innovation within the payments space to quickly form the ‘next normal,’ requiring payments firms to be digital masters almost overnight.”

He added: “Now more than ever, payments providers need to deliver differentiated offerings that emphasise speed, convenience, and superb end-to-end customer experience.”

“Currently, we are seeing visionary banks and payments firms diligently prioritising technology transformation and actively adopting a ‘curate and collaborate’ approach by teaming with agile new players to create more nimble organisations,” he concluded.

Published on October 08, 2020

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