World Payments Report 2010 sees continued growth of global payments volumes in 2009 despite financial crisis

The increase in global payment volumes was outlined in the World Payments Report 2010, released by Capgemini, RBS and the European financial marketing association (Efma). This upwards trend has followed a period of overall growth in non cash-payments which accelerated to 9 percent in 2008 from seven percent in 2007. The rate of growth in non-cash payments volumes in 2008 was faster in developing economies, such as China (29 percent), South Africa (25 percent) and Russia (66 percent) than in mature markets, such as North America which had a growth rate of 4 percent.

The World Payments Report 2010 has also examined the latest trends in the global payments landscape including payments volumes and instruments usage as well as key payments-related regulatory initiatives and the consequent strategic challenges and options for banks.

The report has revealed that globally, cards remain the preferred non-cash payment instrument, accounting for more than 40 percent of payments in most markets and 58 percent globally.

In the Eurozone, cash-in-circulation has continued to maintain a steady growth of around 11 percent per year since 2002, representing significant cost for society. Alternative, or non-bank providers, have made significant strides in m-payments, particularly in emerging markets, and e-payments – although both still account for only a small percentage of total worldwide transaction volumes.

Progress towards SEPA continues but challenges remain

The report highlights several key developments that have taken place in 2009 around the Single Euro Payments Area (SEPA) and Payment Services Directive (PSD), revealing nearly all European Economic Area (EEA) Member States have now transposed PSD into national law.

The report also reveals that while SEPA Direct Debits (SDD) were launched in November 2009 for both consumers and corporates, usage at this stage remains very low. At the same time, usage of SEPA Credit Transfers (SCTs) has continued to grow but is still behind expectations. Nearly all stakeholders, including government and industry, now agree that full SEPA migration will continue to lag unless supported by regulation and in June 2010, the European Commission (EC) announced that it was intending to draft binding legislation on migration end-dates.

Global payments industry continues to evolve

Together with post-crisis regulatory initiatives, new technologies and added competition are making the payments landscape increasingly complex.

The report also reveals a new trend whereby many banks are reassessing their payments operating models and architectures, integrating operations to create centralized Payments Hubs focused on cost optimization and revenue growth. This can enable banks to better understand performance and profitability related to each payment instrument, offer customized value-added services to clients and tailor pricing and billing as required while taking an open, flexible and scalable approach, essentially enabling them to achieve more with less.