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Global non-cash transaction volumes record highest growth of past decade

According to the World Payments Report, global non-cash transaction volumes grew 11.2% during 2014–2015 to reach 433.1 billion, the highest growth of the past decade, and slightly above last year’s prediction. Two regions fuelled this increase: Emerging Asia with a growth rate of 43.4% and CEMEA (Central Europe, Middle East, and Africa), with 16.4% growth.

Double-digit growth

Expansion in Emerging Asia was due to impressive growth across all geographies as increased adoption of mobile payments and wallets generated a proliferation of card use.

Electronic Bill Presentment and Payment (EBPP) solutions that leverage real-time payments networks and infrastructures boosted credit transfers. CEMEA recorded the highest growth in cards transactions and credit transfers in countries such as Saudi Arabia and Poland. This was particularly true in countries where card network development is immature.

Non-Cash transaction volumes in mature markets witnessed a growth rate of 6.8%, a nominal rise over the 6% recorded in 2014. Within this segment, total non-Eurozone and North America regions saw the highest growth rates of 10.2% and 5.4%, respectively, during 2015. The greatest growth rate increase (although not the highest growth rate) was recorded in North America (United States and Canada) with 5.4% in 2015, compared with 4.4% in 2014.

 Non-Cash Transactions

Number of Worldwide Non-Cash Transactions (Billion), by Region, 2015–2020E

In the United States, increased adoption of mobile payments led to a growth rate of 5.6%. In comparison, Canada’s volume growth slowed during the period from 6.6% in 2014 to 4.1% in 2015 due to several factors, including a reduction in growth rates of debit card and direct debit transactions as contactless technology proliferated.

Contactless payments are becoming the new normal, and the trend is being observed in Europe as well in countries such as France where the circulation of Visa contactless cards doubled from 20.3 million in 2014  to 40 million in 2015. The UK tops the contactless markets in Europe with contactless cards in circulation reaching as high as 106.9 million in 2015.

Developing nations

Emerging markets contributed to 32.1% of the global volume and witnessed a growth rate of 21.6% from 2014–15 while mature markets contributed to 67.9% share with a 6.8% growth rate. Developing markets witnessed phenomenal 21.6% growth in 2014– 15, compared with 16.6% in 2009–10 and volume of share 19.6%. Mature markets enjoyed a share of 80.4% in 2009–10 with a growth rate of 16.6% that dropped to 6.8% in 2014-15.

Emerging Asia recorded the highest increase in transaction share—2.9%—thanks to stellar growth in China and India. At the same time, North America and Europe witnessed a decline in their share of non-cash transaction volumes of 1.8% and 0.7% respectively.

However, the regions account for a majority share of 34.0% and 23.4%, respectively, of total non-cash transaction volumes globally.

Debit cards, credit transfers lead digital instruments

Transaction volumes for all payment instruments except checks grew during 2015. Check use continued to decline throughout the period. Payments by cards grew faster than other instruments, an indication of superior convenience and security, particularly for in-store and online purchases. Cards increased their share of global non-cash transactions by 1.2%.

While debit card market share increased to 70.5% of total card transactions in 2015 (up from 69.9% in 2014) credit card market share dropped from 30.1% in 2014 to 29.5% in 2015.

The total number of debit card transactions reached 202 billion and the share of debit cards increased from 87.9% to 89.6% of the total volume of cards in circulation between 2014 and 2015. Volume growth rates were the highest in Emerging APAC—31.5%—a region where financial inclusion measures such as increased issuance of debit or debit-like and prepaid cards have been rolled out in countries including India, Malaysia, and Thailand. The next strongest growth was 18.1% in CEMEA.

Credit cards transaction volumes grew by 10.8% globally in 2015 to reach a total of 85 billion. Strong growth was recorded in Emerging Asia (76.1%), CEMEA (13.6%), and North America (8.7%), respectively.

During the past 10 years, debit-card-to-credit-card ratio shifted from 59:41 to 90:10 as a result of Basel III and credit policy changes. Credit margin is no longer a key value proposition for payment activity through credit cards.

During the coming years, credit cards transaction volumes are expected to be affected by the interchange fee cap in Europe, rising costs of credit card issuance, and the reluctance of banks to issue credit cards in

an uncertain economic environment. Further, several banks have initiated providing credit from debit card payments, which might further accelerate the decline in market share of credit card transactions.

The growing use of electronic payments methods is contributing to the decline of checks, the use of which fell by 13.4% in 2015.

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