Transformation of Digital Payments Challenges Traditional Banks

New technologies, players and consumer expectations are changing the payments marketplace more than ever. As the payments ecosystem transforms, organizations must reassess their role, and collaborate value-added solutions for the future.

Digital payments worldwide are predicted to reach 726 billion transactions by 2020, an increase of 10.9% CAGR, according to the World Payments Report 2017 (WPR) released by Capgemini and BNP Paribas. Emerging markets will lead this growth, with advanced technologies such as connected homes, contactless bank cards, wearable devices and augmented reality adding fuel to cashless transaction growth.

In the period from 2014 to 2015, non-cash transaction volumes grew 11.2% to reach 433.1 billion, the highest growth in a decade. Developing markets realized a 21.6% increase, while mature markets increased by only 6.8%. Of special note, emerging Asia had a growth rate of 43.4%, with Central Europe, Middle East and Africa (CEMEA) having a growth rate of 16.4%.

Contactless payments are also becoming more commonplace, with this form of payment becoming the norm in many European countries. France saw the circulation of contactless cards double from 2014 to 2015, with the number of contactless cards in circulation in the U.K. reaching 106.9 million in 2015.

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