Growth returns to the payments industry, finds World Payments Report

Rebecca Lambert
Rebecca Lambert
By Rebecca Lambert on 30 September 2014
Growth returns to the payments industry, finds World Payments Report

Growth is returning to the payments industry, fuelled by increasing non-cash payments volumes in developing markets, according to the latest annual World Payments Report from Capgemini and Royal Bank of Scotland (RBS).

The report states that non-cash payments volumes are expected to have grown by around 10% to reach 366 billion transactions in 2013 (the most recent year for which full figures are available). Overall, more than half of this growth comes from developing countries, led by China, which William Higgins, managing director of Payments at RBS, has singled out as a market to watch in the coming years.

“If growth rates remain at the current high level, it could become the largest market for non-cash transactions within just five years,” he said. “These soaring growth rates in key markets put pressure on the global payments arena to innovate to meet rapidly increasing consumer demand.”

The report also found that increased use of tablets and smartphones is posing new challenges for payments services providers (PSPs). While mobile payments are projected to grow by 60.8% in 2015, electronic payments are expected to decline by 15.9%. This trend is putting pressure on PSPs to modernise their payments processing infrastructures to support a wide range of customer-facing innovations.

  “This year’s World Payments Report found the majority of traditional payments providers have made the transformation of payments processing a priority in the short term,” said Jean Lassignardie, chief sales and marketing officer for Capgemini Financial Services. “However, the pressure is on from both competition and new regulatory initiatives to provide next generation innovations like Square, IZettle, and Swift for tangible customer value. This requires providers to develop a long-term vision for payments processing that can be tactically executed through strategic, agile, short-cycle projects where quick wins are captured while building longer term value-add.”

To cope with these new trends, the report recommends that PSPs invest in single integrated payments platforms (with a common base for both retail and corporate payments), apply the concept of payments hubs to all areas of payments, and address cards/payments convergence as essential support for customer-facing innovations.

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