World Payments Report 2018: Customer Demand for Digital Payments Booming But Regulatory and Operational Complexities to Innovation Remain


PARIS–(BUSINESS WIRE)–Digital payments are experiencing a boom, driven by developing
markets, according to the World Payments Report 2018 launched
today from
. However, the innovation landscape in payments is
uncertain as BigTech
1 entrants make their
presence felt, and incumbents face technical and regulatory complexity
in the development of new collaborative payments ecosystems between
themselves and FinTechs. The report finds that it will take more than
bank-led initiatives to grow the new payments landscape. The broader
financial services community – including public-sector organizations,
regulators and third parties – must determine their new roles and work
together with large payment users to ensure a smooth, balanced, and
robust payments ecosystem development.

Developing markets are driving non-cash growth

The report forecasts that non-cash transactions will post a compound
annual growth rate (CAGR) of 12.7 percent through to 2021, following
growth of 10.1 percent in 2015-16, which saw the total volume of
non-cash transactions reach 482.6 billion.

This non-cash boom is being driven by developing markets, with Russia
(CAGR of 36.5 percent), India (33.2 percent) and China (25.8 percent) as
notable movers during 2015-16. Mature markets maintained steady growth
of more than 7 percent.

Developing markets are set to show a 21.6 percent CAGR, led by emerging
Asia at 28.8 percent over the next five years. By 2021, developing
markets are expected to account for around half of all non-cash
transactions worldwide, overtaking the mature markets for the first
time, whose current share stands at 66.3 percent.

BigTechs are opening their e-wallets

Disruption of the payments market is accelerating as new technologies
take hold and BigTechs and FinTechs make their presence felt. In
particular, e-wallets are on the rise and present a major market
opportunity for non-traditional payments providers. In 2016, e-wallets
accounted for 8.6 percent of non-cash transactions (a volume of 41.8
billion), of which 71 percent were facilitated by BigTech providers.

Innovation faces complexities

Although disruption is accelerating, and market entrants are
proliferating, there are regulatory and technical complexity challenges
to the development of innovative new payments ecosystems, along with the
expectation of the current level of security. Only 38 percent of bank
executives surveyed for the report said they were ‘planning an anchor
role’ in new payments ecosystems.

“As demand for digital payments is strong, especially in developing
markets, some banks may want to revisit their choice to not seek an
anchor role in the new emerging payments ecosystem,”
said Anirban
Bose, CEO of Capgemini’s Financial Services and member of the Group
Executive Board. “With their significant market share in the payments
industry and implementation of new technologies, banks are in a unique
position to shape the marketplace. They can also create new revenue
streams through innovative, collaborative relationships with FinTechs
and active participation by the broader financial services community.”

Like banks, corporate treasurers should also consider their role in the
new ecosystem as they expect value-added services that are safe,
efficient, reliable and global and could co-design these services with

“Large payments users are also a key constituency in the evolution of
innovation in the payments industry. Without their participation,
payments services providers are missing a vital opportunity to shape new
offerings in transaction banking such as in cash aggregation, cash
forecasting and automated treasury,”
said Bruno Mellado, Head of
International Payments and Receivables at BNP Paribas. “These
offerings could equip corporate treasurers with the means to move beyond
a tactical or operational role and towards a more strategic one for
their companies.”

Indicative of the complexities that surround innovation in the payments
marketplace, many respondents said that adoption of a real-time payments
infrastructure was being inhibited by lack of interoperability between
schemes2 (identified by 74.1 percent of executives) and weak
data and authorization standardization (59.3 percent).

On Distributed Ledger Technology (DLT), 85.9 percent highlighted lack of
interoperability, 83.1 percent lack of regulatory clarity, and 77.1
percent ability to scale, as factors limiting adoption.

The report also shows how key regulatory and industry initiatives
(KRIIs) are threatening to create conflicts as they spread from a
regional to a global level. Conflicting KRIIs pose implementation and
operational challenges that could hinder the transition to new payments
ecosystems. Examples include the Fifth Anti-Money Laundering Directive
(5AMLD) and PSD2 conflict, as well as GDPR and PSD2.

Report methodology

The World Payments Report 2018 is comprised of primary research based on
executive interviews and an online survey. This edition also includes
the introduction of the Payments Open Banking Assessment, which
demonstrates the state of open banking in 16 countries from a payments

About Capgemini

A global leader in consulting, technology services and digital
transformation, Capgemini is at the forefront of innovation to address
the entire breadth of clients’ opportunities in the evolving world of
cloud, digital and platforms. Building on its strong 50-year heritage
and deep industry-specific expertise, Capgemini enables organizations to
realize their business ambitions through an array of services from
strategy to operations. Capgemini is driven by the conviction that the
business value of technology comes from and through people. It is a
multicultural company of 200,000 team members in over 40 countries. The
Group reported 2017 global revenues of EUR 12.8 billion.

Visit us at
People matter, results count

About BNP Paribas and BNP Paribas Cash Management

BNP Paribas is a leading bank in Europe with an international reach. It
has a presence in 73 countries, with more than 196,000 employees,
including around 149,000 in Europe. The Group has key positions in its
three main activities: Domestic Markets and International Financial
Services (whose retail-banking networks and financial services are
covered by Retail Banking & Services) and Corporate & Institutional
Banking, which serves two client franchises: corporate clients and
institutional investors. The Group helps all its clients (individuals,
community associations, entrepreneurs, SMEs, corporates and
institutional clients) to realise their projects through solutions
spanning financing, investment, savings and protection insurance.

For information about BNP Paribas Cash Management, please visit

1 BigTechs are large, multinational technology firms such as
Google, Amazon, Facebook, Apple, Alibaba, Tencent, etc.

2 Globally, there are multiple real-time payment schemes
currently with different criteria pertaining to speed, volume, value,
and settlement, for example, IMPS (India), FAST (Singapore), NPP
(Australia), FPS (UK)

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