The overall conclusion from the latest World
Payments Report is that non-cash payment volumes continue to
rise despite the fraught economic backdrop of 2007 and
2008.
The report, published in September by consultancy Capgemini,
Royal Bank of Scotland and the European Financial Management &
Marketing Association (EFMA), covers the global payments industry
up to the end of 2008 and states:
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• Continued growth in non-cash payments indicate that the
strength of the market depends more on infrastructure, end-user
education and user preferences than on overall market
conditions.
• In the US, general purpose card transactions
grew by 7.7 percent in 2008, with debit card spending up 12.1
percent compared to a modest 1.7 percent rise in credit card
transactions. The US accounted for 39 percent of global payments in
2007, with volumes having grown steadily at about 5 percent a year
since 2001. In Europe, general purpose card transactions grew 11.4
percent in 2008.
• In the period 2001-2007, non-cash
transaction volumes grew by 8.6 percent, outpacing global GDP
growth of 3 percent, with global credit and debit card transactions
growing by 15.7 percent.
• The number of cards in circulation is
growing at double digit rates, in particular in Latin America (up
by 28.2 percent in 2007), and Central Europe, Middle East and
Africa (up 21.3 percent). Cheque usage continued to decline, down
6.8 percent in 2007.
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By GlobalData• In Europe, the three largest non-cash
payment markets remain Germany, France and the UK, with Italy,
Poland and Greece at the bottom of the table. However, France,
which had the most non-cash payments per capita in 2001, has
dropped down the table to sixth place. Germany, Austria and
Slovenia are identified in the report as having significant room to
expand card usage.
• Developing economies continue to grow their
share of global transactions every year, with the BRIC economies
(Brazil, Russia, India and China) share of the global non-cash
payments market up 3 percent to 15 percent in 2007 driven by
sharply higher transaction volumes in Russia (up 47.7 percent) and
China (30.3 percent).
• A range of initiatives in Asia-Pacific have
demonstrated that payments innovation is a potential source of
revenue for banks. Best practice examples given include Globe
Telecom’s G-Cash in the Philippines, an SMS m-payments product used
by 1.5 million people; the contactless Octopus transit and payment
card in Hong Kong; NTT DoCoMo’s highly successful DCMX m-cards in
Japan (see RBI 618); Smart
Money in the Philippines, an m-payment service now used by 2.5
million subscribers; and Paymate, which has teamed up with banks in
India including Standard Chartered and State Bank of India to
provide an m-payment service using SMS.
The progress of SEPA continues to cause
headaches for European payment players. The report notes that no
date has been set for abolishing domestic instruments and
stakeholders agree that SEPA volumes will not reach critical mass
as long as SEPA and domestic services are allowed to operate in
parallel.
The report notes that the European Commission
and the European Central Bank have developed a deeper understanding
of the complexities involved in creating a new pan-European debit
card scheme, and have realised the current requirements on
inter-operability “arguably favour a duopoly of Visa/MasterCard
schemes”.
