latest World Payments Report is that cards-based spending is
growing rapidly around the world – though cash remains very
popular. The report, which covers the payments industry up to the
end of 2006 and has just been published by consultancy Capgemini,
Royal Bank of Scotland and the European Financial Management &
Marketing Association (EFMA), states:
• In both mature and developing countries, cards are the
predominant growth driver in the non-cash payments market. The
total number of non-cash payments worldwide reached 233 billion in
2006. There were 7.9 billion cards in circulation worldwide, and
142 billion purchases worth €5.8 trillion ($8.5 trillion) were
conducted using cards. Volumes grew at a sustained 10 percent
annual rate during 2001–2006.
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• With 95 billion non-cash transactions, the US accounted for 41
percent of worldwide volumes in 2006, with annual growth of 5
percent since 2001. The eurozone, a comparable trading bloc,
accounted for 22 percent of the market, with 51 billion
transactions, after posting annual growth of 7 percent in volumes
between 2001-2006.
• Mature economies accounted for more than 80 percent of
worldwide non-cash payments volumes, and should keep their dominant
position at least until 2013. China, which accounted for 7 percent
of the global market in 2006, grew 46 percent annually from
2001–2006. Other emerging countries with strong non-cash
fundamentals include Brazil, India and Russia – with non-cash CAGRs
of 9 percent, 13 percent and 32 percent, respectively.
• But cash remains popular. European cash-in-circulation has
increased 11 percent each year since the euro was introduced in
2002; cash dominates in India and China, where it is the chosen
means of payment for more than 80 percent of spending; and cash
accounted for 35 percent of US consumer spending in 2006, down from
43 percent in 2001.
• There remains a huge opportunity to replace cash but the
process is hampered by the shortage of equally functional and
convenient non-cash alternatives, especially for P2P
(person-to-person) payments.
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By GlobalDataThe report also warns that while Europe’s SEPA initiative is
“certainly moving forward” given the launch of the SEPA Credit
Transfer (SCT) facility in early 2008 and the proposed launch of
the SEPA Direct Debit Core by November 2009, the project still
faces an uphill struggle. Notably, SEPA Credit Transfer volumes
remain relatively low – the European Banking Association reported
12 million SCT-compliant transactions for the period up to the end
of May 2008, a “significant achievement”, says Capgemini, but a
small figure (0.075 percent) when compared to the 16 billion credit
transfers conducted in the region in 2006.
More than 4,250 banks declared themselves to be SEPA-compliant
in time for the SCT launch on 28 January 2008, and by June that
number had climbed to 4,349. At the same time, 16 clearing and
settlement mechanisms from 13 countries announced they were now
able to participate in the scheme.
