World Payments Report 2013
Capgemini, one the world’s leading providers of consulting, technology and outsourcing services and a respected voice in the financial services industry that tracks the state and evolution of the global non-cash payments market. Here, we’ve summarised their 2013 report that recognises, amongst other findings, that client behaviour, regulation, and technology are the factors that drive change within the payments industry.
World non-cash markets and trends
Volume growth in global non-cash transactions accelerated during 2011, with developing markets again fuelling the rise. Volumes grew 8.8% to reach 307 billion in 2011.
The use of cards (debit and credit) further accelerated during 2011, with debit card volumes rising 15.8% to a total of 124 billion transactions, and credit cards climbing 12.3% to a total of 57 billion. The growing popularity of eCommerce also helped push up figures.
Three forces are helping drive growth in mobile and electronic payments transactions – increased penetration of smart phones and internet usage, advances in technology, and innovative products and services.
Managing increasing overlaps between KRIIs requires an holistic approach.
New Key Regulatory and Industry Initiatives (KRIIs) have emerged across the world during the past year, focused on increasing consumer convenience, improving payments security and transparency, strengthening fraud prevention, and stimulating innovation.
As the number of KRIIs proliferates globally, there is an increase in the overlap between individual initiatives. Firms should consider KRIIs in clusters – based on the ‘3C model’– to better understand the impact they have on each other.
Payment services providers (PSPs) need to qualify and quantify the impact of each KRII and be ready to meet the next wave.
The significant challenges involved in migrating to SEPA instruments are making it highly unlikely that the initiative will be fully implemented by the February 2014 deadline. In addition, long awaited changes to the top level of SEPA governance, particularly to the role and composition of the SEPA Council, have not yet been agreed.
Payments acquisition has emerged as a key area for innovation
Payments acquisition has emerged as an extremely competitive element of the payments value chain, due to its proximity to clients and strategic value for PSPs; and demonstrates tangible opportunity to realise customer-centric innovation.
New and legacy players are delivering a multitude of innovative services – with four ‘Innovation Value Hotspots’ offering an opportunity to target their future investment areas:
- Acceptance and Capture
- Security and Fraud
- Value-Added Services
The changing landscape requires that all stakeholders, including PSPs, learn three lessons:
- The increasing fragmentation of the value chain is providing acquisition players with an opportunity to differentiate.
- Banks need to continue to align their products with customer needs and increase their market positioning from payments provider to a purchasing and selling facilitator.
- While consumers need to balance security and convenience, corporates should focus on standards-driven collaboration with service providers.
Cards continue to take market share from other payments instruments, and e- and m-payments channels continue to build volumes. PSPs must recognise, however, that with new payments instruments and the entry of new non-bank, less regulated participants, markets such as e- and m-payments and prepaid cards, and regions such as MEA, are becoming less transparent.
Despite unprecedented upheaval in the payments industry, generated by regulatory change, advances in technology, and economic volatility, PSPs continue to innovate.
Three factors are driving change within the payments industry and accelerating the growth of non-cash payments: client behaviour, regulation, and technology.
As the C2B sector evolves towards ‘any form’, ‘anywhere’, and ‘any time’ payments and B2B from bi-lateral to multi-lateral models, payments acquisition is becoming an area of intense activity.
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