Non-cash payment increased at a rate of 9% in 2014 to 389.7 billion transactions, up from growth rate of 7.6% in 2013, according to the World Payments Report 2015 from Capgemini and the Royal Bank of Scotland (RBS).
The report, which gave an estimate of the for transactions made in 2014 and showed detailed figures on the previous year’s usage, said the volume of payments made with debit and credit cards and other non-cash methods grew faster than GDP across all geographies in 2013.
According to the report, growth was propelled by a combination of factors including robust growth of non-cash transactions volumes in emerging Asian countries and widespread adoption of mobile technology for payments in mature markets.
Non-cash transactions in Emerging Asia are expected to have grown by 27% in 2014 from 22% in 2013 driven by increasing internet use and the adoption of mobile payments.
In particular, non-cash payment volumes in China are expected to surpass those in Germany, the UK, France, and South Korea, moving it into fourth position globally, behind the US, Eurozone, and Brazil in first, second and third place respectively, the report says.
China posted record non-cash payment growth of 37.7% in 2013. Mobile payments grew by 170% to reach 4.5 billion transactions.
The study says that despite the rise of other competitive payment providers along with new and alternative payment methods including digital wallets and mobile apps, banks are still in a strong position to develop innovations that improve the customer experience.
"Banks can gain competitive advantage by building holistic payments services. Continuous innovation can be built upon immediate payments and Blockchain technologies," authors of the report opined.
RBS director of payments Marion King commented: "Technological innovation has triggered a dramatic increase in digital payments. This shift from physical to digital payments not only providers simpler, faster and secure payments for us all, it has also enabled new and progressive business models to emerge."
Capgemini Financial Services global sales officer Andrew Lees said: "Each year banks face new and greater challenges in innovating to meet consumer demands for more convenient, faster, more secure and more mobile payment methods. Facing this pressure and the need for new regulatory initiatives to support innovations like Immediate Payments, payment services providers must take a long-term approach for payments processing by building a holistic set of offerings that can deliver value on a global scale."
Additionally, the study found that hidden payments, or payments processed through non-bank systems, are now estimated to be as big as around 10% (40.9 billion) of non-cash transactions in 2014 and are expected to grow in the coming years.
The lack of coherent data on hidden payments, which include payments made through closed loop cards and mobile apps, digital wallets, mobile money, and virtual currencies makes it challenging for banks and non-bank payment services providers in determining optimal operating and processing models in such markets, the report added.