In 2015, debit cards accounted for the highest share (46.7%) of global non-cash transactions, followed by credit cards (19.5%).
In 2015, debit cards accounted for the highest share (46.7%) of global non-cash transactions, followed by credit cards (19.5%).

EMs Fuel Non-Cash Transactions

Emerging Asia, which includes Malaysia, Thailand, Indonesia, Philippines, Taiwan, Pakistan, Sri Lanka, and Bangladesh, saw a 43.4% growth, while the CEMEA (Central Europe, Mideast and Africa) logged in at 16.4%

EMs Fuel Non-Cash Transactions

Debit cards and credit transfers are increasing globally, largely due to growth in emerging markets, according to the 2017 World Payments Report. While check use continues to decline, cash remains in the mainstream.
Global non-cash transactions have seen a sharp growth during 2014/15 to reach a global volume of 433.1 billion. That’s according to the World Payments Report, an annual analysis of the global non-cash transaction market and a review of key regulatory and industry initiatives compiled by consulting firm Capgemini and French banking group BNP Paribas, DW reported.
The 11.2% growth, the highest in the past decade, was largely driven by developing markets, which recorded a 21.6% increase in 2015 while mature markets grew at a subdued rate of 6.8%.
Here are six main takeaways from the report.

 1. Developing Markets
The 11.2% growth was largely driven by two regions: Emerging Asia and CEMEA (Central Europe, Middle East and Africa). The former, which includes Malaysia, Thailand, Indonesia, Philippines, Taiwan, Pakistan, Sri Lanka, and Bangladesh, saw a 43.4% growth, while the CEMEA logged in at 16.4%.
Mature markets (parts of Asia-Pacific, Europe and North America) held their growth rate at 6.8%. Within the top-10 markets for non-cash transaction volumes, China climbed to third place after the US and EU with $38.1 billion transactions, surpassing 2014’s number three Brazil.
Although emerging markets are catching up fast, mature markets made up 70% of all existing payments volumes in 2015.
Europe recorded small growth rates between 7.3% and 7.5%. Some countries, including Germany, Spain, Ireland, Sweden, Finland and Denmark not only experienced “accelerated growth”. Of those nations, in turn, such as Denmark and Finland, also had higher per capita transactions.

 2. Debit Cards and Credit Transfers
In 2015, debit cards accounted for the highest share (46.7%) of global non-cash transactions, followed by credit cards (19.5%). Although credit cards volume grew 10% globally in 2015, growth rates across regions declined or grew marginally, except in Emerging Asia.
In regards to credit card transaction volumes, which grew almost 11% globally to $85 billion, Emerging Asia recorded the highest growth with 76.1%. “In the coming years”, according to the report, the market share of credit card transactions will further decrease due to “the interchange fee cap in Europe, rising costs of credit card issuance, and the reluctance of banks to issue credit cards in an uncertain economic environment”.
 3. Check Usage Declining
Checks were the only non-cash payment instrument to decline in use in 2015, namely by 13.4% globally. In North America, for instance, checks’ percentage of the payments’ mix dropped from 17% to 9% in 2015. All other regions saw the percentage halve or even decline two thirds, like in Emerging Asia. In CEMEA, checks played virtually no role.

 4. Cash Persistence  
Unlike checks, cash continues to play the leading role in payments, especially for low-value transactions such as “payment for food and personal care supplies, general merchandise, and gifts.” Other key factors listed in the report include the anonymity of transaction associated with cash as well as a lack of modernized payment infrastructure and access to banking systems in emerging markets.
The authors of the report expect cash to continue to stay in the system “for a longer term than estimated”.

 5. Revised Payment Services Directive
At the beginning of 2018, the revised Payment Services Directive, or PSD2, will come into effect. It builds on the original directive from 2007, which provided a legal framework for payment service providers and was instrumental for the implementation of the single euro payments area.
PSD2, whose goal is to foster an efficient, safe and integrated EU payments market, is expected to “transform the payments value chain, innovate business models, and renew customer experience,” according to the report.

 6. Fintechs Face Challenges
As “strong customer authentication” and other security rules likely won’t come into effect until April 2019, however, the time gap between PSD2 implementation next January and the said security roles might create confusion or over-regulation of third-party payment service providers, including Fintech companies.
For the coming years, the report anticipates overall global non-cash transaction volumes to grow “strongly” due to “rising adoption of alternate payment instruments, growing financial inclusion and regulatory initiatives based on digital payment models, increasing financial literacy, and enhanced payments network infrastructure, especially in developing markets.”

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