Asian countries will be leading in terms of growth in cashless payments this year, according to the projections of Capgemini Research Institute in the 2019 edition of the World Payments Report, an annual report on the status of the world’s payment ecosystems.

Highlights

Asian countries are expected to grow to US$ 208.7 B in cash transactions. This is followed by North America ($ 184.5 B), Europe ($ 170.4 B), Middle East and Africa ($ 90.2 B), and Latin America ($ 51.1 B).

On 2016-17, the world experienced a growth rate in non-cash transaction volumes of 12%. This rate was recorded to be the highest over the preceding two decades.

Capgemini expects Asia to continue in the upward growth trajectory it is experiencing, with an approximated compound annual growth rate (CAGR) of 30% from 2017 to 2022.

Increasing complexity

Now that developments are fast-paced and with more payment service providers (PSPs) and other institutions entering the mix, the payment landscape is getting real convoluted.

Apart from this increased competition, another source of complexity would be technological uncertainties. The emerging technologies are increasing customer expectations which compel companies to continue investing in development. However, the payment market is still volatile, there’s also some hesitation in putting out cash.

Lastly, regulation is also turning out to be difficult in the current rate of growth in the payment market. There are multiple payment schemes that are existing right now, severely lowering interoperability.

There is also a need to adjust the data protection guidelines since strict compliance with the present regulatory framework can severely hamper innovation.

Rising expectations

As mentioned, a prime source of complication in the cashless payment market would be the increased expectations of the consumers. This is an important matter to delve deeper into since this can also lend some insight on the direction of development the market will take.

Capgemini specified six main expectations customers have from PSPs in the succeeding years:

1. Real-time liquidity management: with real-time payments becoming a trend, optimizing the processing of payments is imperative.
2. Traceability and reach: Another important safeguard that consumers expect from PSPs would the traceability of transactions to preserve transparency. This is quite challenging, especially in the context of cross-border transactions.
3. API-led propositions: by using APIs, the customer experience can be improved through evidence-driven solutions.
4. Managing disparate data and fraud management: With data coming from multiple sources, there is a need for the PSPs to up their game in data handling and in ensuring that information users share would remain safe.
5. End-to-end cash management: The development of tools that will allow real-time data analysis is crucial for cash forecasting, aggregation, supply chain financing, and other working capital requirements.
6. Unified view of multiple bank relationships: Instead of the multiple relationships with banks, a unified payment experience is something that users want for a seamless transaction.

“Collaboration is the key for ecosystem or digital commerce platform models,” said Shirish Wadivkar of the Standard Chartered Bank of Singapore.

Indeed, there is a need to revisit our infrastructure in order to accommodate the open banking system that the market is turning out to be. A collaboration between the industry stakeholders as well as the policymakers is yet another crucial step in order to ensure security and equity.