Digital Payments: Growth and Development

imageCapgemini has released its 2016 World Payments Report (WPR)! Along with the rest of the payments industry, we are keeping a close eye on the developments worldwide, so we can respond to the needs and wants of our customers and consumers at large.

Who’s Contributing to the Rise in Online Payments?

The WPR indicates a 10.1% increase in digital payments in 2015, after a record-breaking year in 2014 (8.9% growth). The projected total for 2015 is 426.3 billion online transactions.

Developing markets, such as China, contributed the greatest percentage of growth, but total volume of payments remained largely with established markets. China, which has made a serious effort to bolster FinTech and has increasing mobile penetration, is now fourth in transaction volume, behind the United States, the Eurozone and Brazil. By 2021, China’s transaction volume is anticipated to trail only the United States in “non-cash” payments.

Underlining the Importance of Cards

While cash hasn’t disappeared, particularly among private consumers and for “small” payments, use of checks is on the decline. Cards remain at the forefront of digital payments. The WPR indicates that in order for “immediate” payments such as e-wallets to mount a serious challenge to cards, greater consumer education and more value-added services will be required.  At the moment, the convenience of card-not-present payments hasn’t won over the majority of consumers, despite increasingly good security measures.

Regulations and Politics

Growth and development of digital payments isn’t taking place in a vacuum. All players must keep an eye on world politics and the financial regulations and legislation being written and rewritten over time. Shifts such as Great Britain’s plans to leave the EU (Brexit) will have an influence on banking and bear careful watching and appropriate reactions.

We naturally have a particular interest in the security of online payments and other regulatory matters. Issues that we have tackled in 2016 on the Credorax blog include:

The Transition to Digital Payments

As the volume of digital payments is on the rise, banks and merchants will be forced to adapt, but also create and improve services beyond merely offering payments. The opportunities for collaboration between traditional banks and FinTech firms will increase as well, as consumers continue to demand secure, convenient payment methods for a wider variety of services.

Don’t get caught unprepared! Credorax is a merchant acquirer that invests in both technology and business solutions designed from the bottom up for merchants of any size. To find out more, contact us grow@credorax.com.

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