Change is the only constant in the payments sector
Trends driving the trillion $ payments industry
There are few sectors that can claim to have changed as dramatically in the last few years as the payments sector. The payments industry has faced unprecedented technological and regulatory change, which has significantly altered the competitive landscape of the industry.
You don’t have to look back too far to a time when “cash was king”. However, in 2017 debit card use overtook cash as the most popular form in the UK for the first time1 and the use of contactless cards increased by 97% in that year alone.2 Meanwhile, the volume of cash purchases in the UK dropped by 15%3 impacted by card use and online payments. Even in Germany (a country historically slower to take up new payments technologies) in 2017, for the first time, less than half of all money spent was in the form of cash (a 5%. decline from the previous year).4
In emerging markets, the lack of credit card infrastructure is driving dramatic shifts in payment technology, with China leading the way with QR code technology. Payment providers in these jurisdictions are providing increasingly sophisticated mobile wallet offerings that link the user’s digital wallet to other financial services.
Wherever you look, the face of the payments sector is changing. Ensuring payments businesses are able to meet future challenges and developments in payment processing remains a key priority for those working in the sector. It is no longer just a case of “cash vs card” or even debating the penetration of contactless technology. The payments space has expanded to encompass eCommerce, wallet services, direct money transfer services using new open banking rules, QR codes, digital cards and online payments as well as tokenisation, with many players offering omni-channel payment platforms and a suite of other product enhancements and value-added services (e.g. dynamic currency conversion).
See our latest Insights publication for our observations on what is driving innovation and consolidation in payments, key trends driving the industry and details of the work we are doing for clients across the payments sector.1.UK Payments Markets 2018 report published by Payments UK.
4.“Payment behaviour in Germany” published by Bundesbank