EPC: Key findings of World Payments Report 2018

15 November 2018

EPC interviewed Christophe Vergne, Payment and World Payments Report leader at Capgemini Financial services to know more about the trends in the new payments environment.

Capgemini, in conjunction with BNP Paribas recently published the “World Payments Report 2018” (WPR) which provides insightful analysis of the development of the new payment landscape based on executive interviews and online surveys. 

To begin with, can you summarise the key findings of the WPR 2018?

Key findings from the World Payments Report 2018 include:

• Global digital payments volume growth is predicted to accelerate up to an average of 12.7% until 2021, with developing markets, led by emerging Asia, projected to grow at 21.6% compound annual growth rate (CAGR) and overtake mature markets in non-cash transactions by 2021. In 2016, BigTechs and Google, Apple, Facebook, and Amazon (GAFA) reported a 71% share of the e-wallets market, providing some challenge but also an opportunity for collaboration with incumbents.
• Key Regulatory and Industry Initiatives (KRIIs) continue to foster innovation while improving security for consumers. Interpretation and alignment efforts across the industry are slowing down the benefits from new payments ecosystems.
• Creating new payments ecosystems is the way to combine the needs for scale and for innovation. It will take more than bank-led initiatives to grow the new payments’ landscape. The financial services (FS) community ― including public-sector organisations, regulators, and third parties― must determine their new roles and work together and with large users to ensure a smooth, balanced and robust ecosystem development.

What are the main trends in the European payments market in particular as compared to the rest of the world?

Some of the key trends of European payments markets are:

• Overall, Europe remains a fragmented market, both from the demand (comparing non-cash instrument usage in volume and by type of instrument across countries) and from the supply side. Since the Single Euro Payments Area () efforts to harmonise the standards have been in use, instant payments and the revised Payment Services Directive () create other opportunities for heterogeneity of policies, timelines, and finally market fragmentation.
• In terms of volumes, Europe is expected to grow faster than the United States in the coming years as regulatory authorities foster innovation and encourage interoperability. An important factor in Europe is the move towards cashless economies, reflected in the numbers of non-cash transactions per inhabitant in Sweden, Finland, and Denmark paving the way for a European cashless society. Growth remains lower than in emerging markets where payment solutions to a sizeable unbanked population are fuelling double digit growth.
• Europe’s  has emerged as a benchmark for regulators globally to introduce open Application Programming Interface () banking initiatives. Instant Payments were also driven by regulators while countries are at different levels of maturity regarding open banking.

Full interview

World Payments Report 2018

© EPC