Capgemini has just released the 2017 edition of its annual World Payments Report, created in collaboration with BNP Paribas. The latest edition of Capgemini’s WPR offers in-depth analysis of the global payments landscape, as well as a comprehensive review of key regulatory and industry initiatives (KRIIs), such as the EU’s PSD2.

For this 2017 edition of the World Payments Report, world renowned IT consultancy Capgemini has once again partnered with global leader in bank transaction and cash management BNP Paribas. According to the report, global non-cash transaction volumes grew by an unprecedented 11.2% in 2015 - the highest in the past decade - to total USD 443.1 billion. This growth was driven primarily by the emerging Asia region, with a growth rate of 43.4%, and by Central Europe, the Middle East and Africa - referred to herein as CEMEA, which grew by 16.4%.

In the following four sections key findings from the new World Payments Report have been summarised, beginning first with a cursory assessment of global non-cash transaction markets and trends, followed by a review of key regulations and industry initiative (KRIIs), an examination of Europe’s revised payments services directive (PSD2), and finally ending with an assessment of the complex regulatory landscape of the Asia Pacific (APAC) region.

Non-cash markets & trends

The previously mentioned 11.2% volume growth in global non-cash transaction between 2014-15 was largely fuelled by developing markets, which grew by 21.6% in 2015. In contrast, mature markets grew by a mere 0.8% to total 6.8%, compared to 6% in the previous years. China replaced Brazil as the number three market for non-cash transaction volumes, having climbed to 38.1 billion transactions over the period. The figure below offers a visualisation of the 10 markets with the largest volume of non-cash transactions.

Check usage continues to fall around the globe, and debit and credit transfers were the top digital instruments used in 2015, with debit cards accounting for the highest share (46.7%) of non-cash transactions, followed by credit cards (19.5%). Although global adoption of digital payments is on the rise, cash remains an integral part of the global economy, especially for low-volume transactions. With the exception of a few outliers, cash in circulation, or CIC, has remained stable or even increased over the last half decade.

Key regulations and industry initiatives (KRIIs)

Recent years have seen regulatory measures and industry initiatives take on a more transformative approach. Capgemini asserts that relevant and well implemented KRIIs can be well suited in the short term to meeting the primary objectives of regulators, such as standardisation, competition, innovation, risk reduction and transparency.

PSD2 - The Road ahead

The Revised Payments Services Directive, or PSD2 was introduced by European financial regulators with the aim of fostering a more efficient an integrated payments market in the EU. It is expected that these regulations will help to drive more innovative offers by allowing new players to take part in the market. It is likewise expected to create and ensure improved transparency and trust through the implementation of more secure authentication methods that aim to protect consumers against payment fraud - a continually growing threat around the globe. PSD2 is set to transpose to national laws by January 2018, and is thus unsurprisingly a subject on many minds in the payments world.

APAC payments regulation

Regulatory measures related to payments and treasury management in the Asia-Pacific region are generally designed to make both markets and institutions resilient to stress and / or to protect local currencies. For these reasons, the APAC region is often a challenge for non-local competitors. Likewise, the regulatory environment across the region is quite diverse, and although markets such as South Korea, Japan, Singapore and Hong Kong benefit from fairly stable systems, others have experienced an unprecedented growth of activity - particularly in China and certain Southeast Asian countries such as Malaysia.