Cash still has a bright future ahead of it, and so does the bank card
Between 2013 and 2014, the number of dematerialized transactions (that is, all payments that are not made with cash) increased by 8.9%, reaching 387.3 billion, according to the 2016 World Payments Report produced by Capgemini and BNP Paribas, and published on September 22.
In these so-called “dematerialized” payments, we find in particular payments made by bank card, check, transfer, but also NFC payments, online applications and mobile phones. The study therefore aims to assess, worldwide, the level of adoption of digital payment solutions compared to traditional means of payment.
For the year 2015, the authors of the study estimate that the volume of dematerialized transactions will have increased by 10.1%, to reach 426.3 billion. It should be noted that the data presented in the report correspond to the year 2014, and the forecasts presented are for the year 2015.
First surprise of the study, in a context of digitization of payments (with contactless payment), card payment is not dead. Indeed, it was card payments that experienced the strongest growth in 2014 (+ 11.8%). The latter now represent nearly half of recorded transactions (45.7%). What place does this leave for digital payment solutions, such as mobile payment?
Cash remains a popular means of payment
The share of dematerialized payments in total recorded transactions has been steadily increasing in recent years, according to the study’s authors. With 402 dematerialized transactions recorded per capita, the United States is an example in the adoption of dematerialized payment solutions, just ahead of Finland with its 400 transactions per capita.
Despite the development of these virtual payment solutions, the authors of the report note that the culture of cash payment is still strong in some European countries. In the euro zone, the ratio of cash in circulation / GDP thus increased by 4.4% between 2013 and 2014. Sweden is an exception in the panel of countries studied, with a ratio down by 5.8%. between 2013 and 2014. This mechanically slows down the adoption of digital payment solutions.
In addition, the amount of cash in circulation globally has increased slightly over the past 5 years, according to the report’s authors. Guaranteeing the anonymity of the payer, and without associated costs, cash still has a bright future ahead of it.
Professionals behind on mobile payment
Another finding of the study, from the customers’ point of view, the adoption of mobile, including for carrying out online payment transactions, has been rather rapid. A third of retail banking customers say they already make a mobile payment at least once a week, according to a survey presented in the report.
By comparison, 90% of executives working on these payment issues in their company believe that mobile adoption in their sector is slow. Main brakes mentioned by these finance professionals: the lack of “use-case” in business (69%), security (50%), and the difficulty in managing transactions centrally.
Direct result of these brakes: the use of mobile in corporate payments is now limited to the approval of payments, receipt of alerts, and monitoring of operations.
Strong expectations vis-à-vis banks
Despite their reluctance to use the mobile to make payments, professionals nevertheless have high expectations of their banks in terms of digitization. 53.6% of them expect centralized management of their accounts, half of them process automation, and 35.7% of solutions allowing them to better know their customers through data.
To best meet the expectations of their customers, banks are counting in particular on more extensive collaboration with FinTechs. 78.6% of banking professionals indeed consider Fintechs primarily as partners, if we are to believe the results of the study.