Note ban lifted global e-payments growth: Study

Mumbai: Demonetisation has pushed up world

digital payments

by one percentage point more than expected. Also, India’s high growth rate in e-payments is expected to result in the country overtaking Australia and Canada in

electronic payments

in the next two years, making it the ninth-largest in the world.

According to

Capgemini’s World Payments Report 2018

, global non-cash transactions grew 10.1% in 2016 as against the 9.1% forecast in the previous report. “We could not anticipate the Indian government’s demonetisation programme, which resulted in a 33% growth in non-cash transactions,” the report said. The biggest contributor to this growth came from

debit cards

(up 76.2%), and payments by mobile wallets (up 75.5%). Credit card volumes grew 38% in India. The growth of digital payments in India in 2016 was second only to Russia (up 36.5%). China was the third-highest at nearly 26%.

Although, Australia and Canada are the fastest growing markets among the top 10 markets worldwide, India is still expected to grow faster than these two countries. The report forecasts that non-cash transactions will post a compounded annual growth rate (CAGR) of 12.7% through to 2021.

One area where India is defying global trends is in the use of cheques. While the use of cheques continued to decline with Apac, China, South Korea and Australia seeing a drop of more than 20%, use of cheques in India grew by 10%. “Overall, cheques are becoming a US-only phenomenon, with that country alone contributing to about 73.5% of the global cheque volume” the report said.

While developing markets are driving rapid growth in non-cash transactions, banks are facing multiple barriers to the creation of a new ecosystem for payments.

According to the report, the broader financial services community — including public-sector organisations, regulators and third parties — must determine their new roles and work together with large payment users to ensure a smooth, balanced, and robust payments ecosystem development.

“As demand for digital payments is strong, especially in developing markets, some banks may want to revisit their choice to not seek an anchor role in the new emerging payments ecosystem,” said Anirban Bose, CEO of Capgemini’s Financial Services and member of the group executive board.


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