trending
Cashless payments are becoming an increasingly important marker of financial modernisation across emerging market and developing economies, with new data from the Bank for International Settlements showing a sharp rise in digital transaction activity during 2024.
Emerging markets shifting to cashless payments
According to BIS figures, the number of cashless payments per person in these economies rose by 21% last year to 242 transactions annually. While advanced economies still record far higher usage, at 579 cashless payments per capita, their growth rate was a much more modest 6%.
The figures point to a structural shift in how consumers, businesses and governments in developing markets are using payment systems. Rather than following the card-led path seen in many wealthier economies, emerging markets are increasingly being shaped by account-to-account transfers and instant payment infrastructure.
Fast payments become a growth engine
In emerging markets, the rise in cashless activity has been driven largely by credit transfers and fast payments. These systems allow money to move almost instantly between accounts, often at low cost and with limited reliance on traditional card rails.
That distinction matters. In many developing economies, card penetration remains comparatively low, while mobile access has expanded rapidly. Fast payment systems can therefore support everyday use cases such as bill payments, person-to-person transfers, merchant acceptance and small business transactions.
By contrast, advanced economies continue to rely heavily on cards. BIS data shows individuals in advanced markets made an average of 361 card payments a year, compared with just 95 in emerging markets.
The result is not simply a difference in payment preference, but a divergence in market architecture. Emerging economies are building digital payment habits around real-time bank transfers, while advanced economies remain anchored to mature card ecosystems.
Value growth remains more measured
Although payment volumes are rising quickly, the value of cashless payments as a share of GDP increased only slightly in emerging markets, by around 3%. In advanced economies, the figure broadly plateaued.
Credit transfers continue to dominate by value in both groups, accounting for the overwhelming majority of cashless payment value. This reflects their continued use for larger transactions, including salaries, supplier payments and interbank transfers.
Average transaction values in emerging markets have stabilised, suggesting that digital payments are becoming more embedded in regular economic activity rather than being limited to high-value or formal-sector use.
Cash declines, but does not disappear
The BIS data also underlines that cash remains resilient. Consumers are withdrawing money less frequently in many countries, but often in larger amounts. This suggests cash still functions as a safety net, a store of value and, in some communities, a practical means of payment.
For policymakers, the message is clear. Digital payments are expanding quickly, particularly where fast payment infrastructure is accessible, affordable and trusted. However, the transition is not simply about eliminating cash.
It is about building resilient payment systems that widen access, lower friction and support more inclusive economic growth.
Comments