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Non-cash transaction volumes maintained upward momentum as consumers and businesses adopted digital payment schemes.
The World Payment Report 2023 estimates suggest that from 2022 to 2027, non-cash transaction volume growth will continue accelerating at a 15% CAGR due to expanding digital payments infrastructure and a proliferation of new payment instruments.
World Payments Report: Europe
Non-cash volumes compound annual growth of 10.7% is expected from 2022 to 2027 thanks to expansion of instant payments, Open Banking regulatory (PSD3) enhancements, and an EU Digital Identity Wallet 2023 pilot initiative.
While Eurosystem launched the Target Instant Payment Settlement System (TIPS) in November 2018, its adoption was tepid, with Single Euro Payments Area instant credit transfers (SCT Inst) accounting for just 14% of all SEPA credit transfers during H1 2023.
The European Union proposed amendments to the 2012 SEPA regulation in 2022 to eliminate adoption barriers and streamline instant payment (IP) system use.
Moreover, the European Payment Initiative (EPI) is piloting an IP scheme in 2023 after acquiring iDeal, and Belgium-based Payconiq.
The EPI pilot will include digital wallets and an Open Banking instant payment system in Germany and France.
The European Central Bank (ECB) backed payment-integration initiative said the EPI scheme might eventually have buy now, pay later (BNPL) and digital identity features.
In parallel, the Immediate Cross-Border Payments (IXB) initiative from EBA Clearing, SWIFT, and The Clearing House in the United States is aiming to enable instant processing of USD and EUR currency exchanges in 2023 to strengthen the US and European digital payment adoption rate.
World Payments Report: North America
As the region catches up to the instant payment revolution, non-cash payment volumes are projected to rise at a 6.5% CAGR (2022–2027).
The US Federal Reserve’s FedNow Service went live on July 20, 2023.
FedNow aims to create a European-style real-time payments network and will function in addition to the RTP Network by The Clearing House, which has been operational since 2017.
Noteworthy is the fact that RTP and FedNow only supports push payments: this means payment types like recurring payments, subscription payments, and P2P payments that require pull capabilities are not supported by FedNow.
The new instant payment service will need further investments to build new capabilities and propel the US market to double-digit growth.
In parallel, the US Consumer Financial Protection Bureau is developing an Open Banking framework and rules that it expects to finalize by 2024.
Canada’s Real-Time Rail is slated to go live in 2023, and Canada has also announced Open Banking launch plans for 2023. The two initiatives will bolster non-cash volume growth in Canada.
World Payments Report: Asia Pacific
The region lacked domestic digital payment infrastructures and had heterogeneous payment rails across key markets – unlike in Europe, where SEPA instilled standardisation.
But during the last decade, government-backed (or led) development of instant and real-time payment infrastructure across critical jurisdictions (including India, China, Singapore, Australia, and Thailand) has been driving adoption of digital payments.
As a result, APAC is now on track to comprise more than 50% of global non-cash payment volumes and will likely register an accelerated 19.8% compound annual growth rate for 2022–2027.
To further improve domestic and cross border digital payments’ convenience, efficiency, cost, and acceptance, APAC markets are also building bilateral and multilateral payment infrastructures.
For instance, in 2021, Thailand’s PromptPay and Singapore’s PayNow real-time payment infrastructure were linked.
In 2021, Singapore also connected its real-time payment infrastructure with Malaysia’s DuitNow. Singapore and India (UPI) also aim to join real-time payment infrastructures.
Moreover, Singapore, Indonesia, Malaysia, the Philippines, and Thailand have all announced plans to integrate regional QR payment systems.
World Payments Report: Middle East
A growth trajectory similar to that being realised in APAC is unfolding here.
The region has been heavily cash reliant despite high mobile penetration.
However, regulatory reforms and maturing digital payment infrastructure are poised to boost non-cash volumes CAGR by 14.1% in 2022–2027.
Open Banking reforms are already underway in the region. Bahrain, Saudi Arabia, the UAE, and Jordan are beginning to embrace open banking frameworks.
In parallel, several Middle East markets are also launching instant payment schemes: Saudi Arabia launched SARIE in 2021, and the UAE is set to launch its instant payment platform in 2023.
The region is also working to integrate payment rails through initiatives such as the Arab Monetary Fund-owned Buna payments platform and AFAQ, a regional payments system provided by the Gulf Payments Company in cooperation with Saudi Central Bank.
World Payments Report: Africa
The continent is catching up to its neighbours in terms of non-cash transaction volume.
Studies say 18 African nations are developing domestic instant payment systems. Moreover, three development projects aim to build regional instant payment platforms.
Such initiatives will likely boost non-cash payment capacity in the region.
World Payments Report: Latin America
The region has been consistently developing instant payment infrastructure.
Non-cash volumes in the region are trending toward 15.7% compound annual growth from 2022 to 2027.
Ten Latin American countries are pursuing or launching instant payment schemes led by Pix, created by Banco Central do Brazil (BCB) in 2020.
Since its launch, Pix has solidified its position as a preferred Brazilian payment option; BCB aims to expand Pix’s reach for instant cross border payments among a bloc of countries by 2025.
The dynamic payments sector has been at the forefront of innovation, with a reputation for adapting quickly to challenges and changes.
Regulations and industry initiatives have kept pace with changing times to ensure resilience, transparency, security, fair competition, and quick-to-market innovations.
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