Global non-cash payments volumes are expected to increase by nearly nine per cent in 2014, as massive emerging markets such as China and India begin to go electronic and mobile money takes off in developed countries, according to the latest annual World Payments Report from Capgemini and Royal Bank of Scotland.
Overall, non-cash volumes are projected to increase at 8.9%, to reach a record high of 389.7 billion transactions, up from 2013’s 7.6% growth rate.
Much of this comes from what the report calls "emerging Asia" - India, China and other countries in the region - where the growth rate is expected to hit 27%, driven by increasing internet use and the rise of mobile payments.
In 2013 China posted record non-cash payment growth of 37.7% as regulators accelerated the opening of the domestic payments card market to overseas competition and point of sale terminals were rolled out across the country.
In 2014 the momentum continued, with mobile payments volume growing by 170% to reach 4.5 billion, moving China into fourth place in the global league table, behind the US, Eurozone, and Brazil.
Meanwhile, the report highlights the growth of "hidden payments" which are processed through non-bank systems and are now estimated to account for 10% of non-cash transactions. These payments - made through closed loop cards and mobile apps, digital wallets, and virtual currencies - pose regulatory problems, the report argues, and risks on data privacy, and money laundering.
Despite the rise of a host of new rivals - from small fintech startups to Silicon Valley behemoths - the report claims that banks are still in a strong position on the electronic payments market because they can "provide holistic solutions across all instruments and channels".
Marion King, director of payments, RBS, says: "As the digital economy transforms innovation in technology, it in turn gives customers greater choice and convenience in how they pay and conduct business."