Payment Methods

New World Payments Report Released By Capgemini, BNP Paribas

Global digital payment volume is slated to hit a new high this year of 426.3 billion transactions. That’s according to Capgemini and BNP Paribas, which recently released new research through the 2016 World Payments Report (WPR).

Paris-headquarterd Capgemini, a consulting and technology firm, has headlined the report for the past 12 years.

This year’s annual growth is projected to top 10 percent for the first time, an increase compared to 8.9 percent growth the previous year (387.3 billion transactions).

The driving force behind the growth in non-cash payments, according to Capgemini, is due in part to strong economic growth in key developing countries, as well as increased security measures and government initiatives to engender electronic payments in certain markets. This all is also a product of increased demand for seamless and secure digital products and services in an efficient time frame.

The report specifically highlighted the growth in the developing markets, which have the highest rate of increased change — 16.7 percent — compared to more mature markets growing at less than half of that — 6 percent. That said, the latter still accounts for 71 percent of the total global transaction volume.

A few firsts were pointed out. China, to start, surpassed the U.K. and South Korea for the first time in payment volumes, moving into the ranking of fourth across the globe. The U.S., Europe and Brazil are still the top three leaders in the space.

While digital payments are increasing, one should not forget what else is in the wallet. Cards still remain the fastest-growing digital payment method since 2010, holding at 11.8 percent. Checks have decreased for years and continue to do so, down 10.8 percent.

As a result, the call for banks to keep pace continues. More banks have begun to recognize the need to buy into the digital-first frame of mind in order to produce digital offerings. The report said 79 percent of bank executives view FinTech businesses as partners with high potential to collaborate.

“While treasurers’ fundamental expectations have not changed over recent years — control, visibility on cash, risk management — corporates increasingly expect banks to digitalize support processes, such as account management, data analytics, compliance tracking and fraud detection and prevention,” said Jean-Francois Denis, deputy global head of cash management for BNP Paribas. “This calls for banks to accelerate their shift towards digitization and foster a more collaborative approach.”

That said, banking revenue remains under intense pressure, especially in light of the emerging FinTech space. The evolution of increased and enhanced customer experience via technology engenders a higher level of customer expectations and benefits.

At the same time, there is a prevailing concern among consumers of privacy and how to stay safe and protected from data breaches.

Last fall, Capgemini released a report, “Privacy Please: Why Retailers Need to Rethink Personalization,” which showed that 93 percent of more than 220,000 consumers surveyed expressed serious doubts over retailers’ abilities to protect consumer data in the event of a cyberattack. Moreover, the study found that retailers themselves acquired a negative connotation related to data security when engaging in certain activities consumers viewed as overtly negative, namely in-store traffic monitoring (84 percent) and facial recognition (81 percent).

“FinTechs, as well as the creation of Innovation Labs in banking, are establishing new precedents for developing superior customer journeys,” said Anirban Bose, head of banking and capital markets for Capgemini. “The key now is in the mix of the partnerships and collaboration that can be done to drive out the most innovative digital services possible at the right ‘moments of truth’ along the customer journey.”

Recently, BNP Paribas Securities Services announced that it would consider letting companies issue mini-bonds on its blockchain technology platform. The mini-bonds are for private company shares. BNP has hooked up with renewable energy crowdfunding companies Lendosphere, Enerfip and Lumo to let private companies issue the mini-bonds through the blockchain technology.

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. In the November 2019 Mobile Order-Ahead Report, PYMNTS talks with Dan Wheeler, Wahlburgers’ SVP, on how the QSR balances security and seamlessness to secure its recently launched WahlClub loyalty program.

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