In China, mobile payments has grown 170%. Photo: e X p o s e / Shutterstock.com
Capgemini has published its incredibly comprehensive World Payments Report 2015, which does a good job of highlighting many of the themes we’ve seen popping up all year.
Payments volume continues to grow at a healthy clip, boosted by non-cash transactions and the rise of emerging markets. For instance, China, which is expected to move into fourth place globally in payment volume, overtaking South Korea and the UK, saw non-cash transactions expand 37.7% with mobile payments increasing 170% in 2014.
Then there’s the growing popularity of alternative, non-bank payment channels, what Capgemini calls hidden payments—since those transaction volumes aren’t easily tracked, which includes but is not limited to closed loop cards, mobile apps and digital wallets like Paypal and Alipay. These hidden transactions could equal 10% of total non-cash payments volume. One way to interpret the situation with hidden payments is that people aren’t getting what they need from the traditional system.
All of which represents two trends we are all intimately familiar with at this point. The payments space is growing by leaps and bounds, but it’s also evolving. That means opportunity. But leveraging that opportunity requires industry incumbents to innovate, the report suggests, and even start to rethink their business models and figure out how they can figure out new ways of providing value-add for their customers.
Notably, the report emphasizes the potential of the blockchain to “improve the efficiency of financial transactions, and to transform the global financial network”:
The financial industry recognizes the potential of blockchain technology to fundamentally change the way the industry operates, with a strong use case for payments. This technology could accelerate the velocity of money, and provide a path for legacy banking systems to interoperate, greatly improving efficiency Blockchain technology has attracted interest from central banks, financial institutions and technology firms, who are investigating the opportunities and challenges in using the technology.