Global rise of digital payments

26 Oct 2021

The use of digital payment means continues to soar as consumers seek more ease and convenience when spending money. The Capgemini 2021 World Payment Report showed that 25% of global cashless transactions will consist of instant payments and e-money by 2025. This represents a rise of around 15% over the past year. The report also revealed that cryptocurrency usage and Buy Now Pay Later (BNPL) initiatives will help to boost the exponential growth of digital payments. Pankaj Kakkar, head of the financial services division of Capgemini Canada said the demand for and acceptance of digital transactions that we’re seeing across the globe now is a direct result of the pandemic. The findings also showed almost 45% of consumers use mobile wallets to make payments on a regular basis, an increase from 23% in the 2020 report. "As digital payments and mobile wallets become more the norm than the exception, payment providers must find ways to meet consumer hopes for speed and ease of use," according to Anirban Bose, CEO of Capgemini’s Financial Services and Group Executive Board Member. "To embrace the next generation of payments, banks must build a complimentary partnership ecosystem to keep up with the rate of change." 

 

Heading up the digital payment revolution

The Asia Pacific region is at the helm of the global digital payment revolution, and by 2025 it is expected it will account for over 50% of global non-cash transactions, with a 28% compound annual growth rate (CAGR) from 2020 to 2025. In addition, over half a billion consumers in Europe are shopping online in 2021, with 25.5% of transactions being cross-border. The Capgemini report shows that mobile payments and cross-border e-commerce throughout Europe will push the region to surpass 400 billion transactions in 2025 at a CAGR of 13%. In contrast, in the U.S., non-cash payments volumes are predicted to steady due to flat transaction growth and a slowdown in the adoption of mobile payments.

 

Better for the environment

As well as the countless advantages of digital payments – such as convenience and speed to name just two – cashless payments are also far more sustainable. “[Prior to non-cash methods] When you spend money, you either had a cheque or cash or some kind of paper,” the Capgemini Canada finance head added. Furthermore, according to a Pomleo Pay blog in 2020, the mining of the metal of coins and their transport has resulted in the emission of over 48,000 tonnes of carbon dioxide, and the plastic notes utilised in the UK and Canada are worse for the environment than paper. “It is estimated that globally, 300 billion paper receipts are produced annually, consuming 25 million trees, 18 billion litres of water and 22 million barrels of oil,” says a Mobile Transaction report. Normalising digital payment methods is another step towards making purchases more environmentally friendly.