October 13th, 2014 by Elma Jane
Non-cash payments volumes are expected to increase by nearly 10% percent to reach 366 billion transactions in 2013, fueled by strong growth in developing markets and mobile payments.
Overall, more than half of global non-cash payment growth comes from developing countries despite them only making up one quarter of the market size at 93 billion transactions. China remains a relatively underdeveloped market for non-cash transactions but its population and growth rate suggest in certain conditions that it could soon outstrip the US and Euro-zone within the next five years.
China is one to watch over the coming years, with the report showing that if growth rates remain at the current high level, it could become the largest market for non-cash transactions within just five years. These soaring growth rates in key markets put pressure on the global payments arena to innovate to meet rapidly increasing consumer demand.
Increased use of tablets and smartphones is creating a convergence of e- and m- payments, posing new challenges for Payments Services Providers (PSPs). In 2015, m-payments are projected to grow at 60.8% while e-payments growth is forecast to decelerate to 15.9% annually over the next year, as more people use mobile devices to make payments.
This trend is adding to the pressure on PSPs to modernize their payments processing infrastructures, ideally based around a single integrated payments platform for corporate and retail payments and a central hub.
The growth of the industry coupled with the fast pace of new regulation requires flexibility from PSPs to adapt, initiatives such as real-time payments, pressure on card interchange fees and improved payments governance as examples of cascading regulation.
Posted in Best Practices for Merchants Tagged with: card, card interchange fees, consumer, e-payments, global payments, m-payments, Mobile Devices, Mobile Payments, Non-cash payments, payments platform, payments processing, Payments Services Providers, psps, real-time payments, retail payments, Smartphones, tablets, transactions
September 27th, 2013 by Elma Jane
Mobile Payment Bandwagon
Just this month, September 2013, a number of British retailers announced their partnership with smartphone payment application Zapp, expected to launch summer 2014. Long before that, in November 2012, global coffee chain Starbucks launched a mobile payment system using Square Wallet, allowing customers to pay for their coffees with a simple scan of their smartphone. In China, the mobile payment market tripled in size over the last year, with a growing number of retailers jumping aboard the e-payments trend. Clearly, mobile payments are the new face of commerce…both for consumers and, increasingly, within a B2B setting as well. It may not be long until every type of payment…from mortgages and business loans to utilities bills and income tax…is made through mobiles.
Though it’s a trend that’s now spreading across the globe, the rise of mobile payments can be directly traced back to Africa. It’s an example of how unique conditions give rise to innovative solutions, and how those innovations catch on. Here’s a brief look at the rise of mobile payment technology and at the role Africa has played in its success.
Africa Gets There First – this notion of exchanging funds through a mobile phone really took off in Africa. When M-Pesa was launched by Safaricom in Kenya in 2007, it was a simple solution to issues specific to the region. Kenyans who lived far from banks or couldn’t afford banking fees were given the opportunity to send and receive payments through SMS messages. M-Pesa answered these specific problems, but the concept behind the service has proven to have a far broader reach. After achieving success in Kenya, M-Pesa launched in Tanzania in 2008. Despite getting off to a slow start, the mobile payment services now has 5 million Tanzanian subscribers. It has also launched in South Africa, Afghanistan, India and there’s plans to roll it out in Egypt at some point in 2013.
At the heart of M-Pesa’s success has been efficiency and security. Removing the need to travel to a bank…or even the need to log into online banking…has made the process of transferring funds far easier and faster. Eliminating the need to write a cheque, use cash or enter credit card details has made the process far more secure. Increased efficiency and improved security are qualities that everyone…not just those in the developing world…stands to benefit from.
Thus, though today’s technology has adapted and built upon the M-Pesa model, the world still has Africa…Kenya in particular…to thank for starting the mobile payment revolution.
Posted in Financial Services, Mobile Payments, Smartphone Tagged with: banking, broader, credit card, e-payments, efficiency, fees, global, innovations, innovative, messages, mobile, payment, retailers, Security, services, smartphone, sms, solution, travel
