Written by: Dominic Broom | Head of Sales and Relationship Management EMEA, Treasury Services, BNY Mellon
The total number of cashless payments has overtaken that of notes and coins in the UK for the first time, according to the Payments Council. The increasing sophistication and ubiquity of smart phones, along with heightened consumer expectations, is driving more consumers towards cashless payments. In addition, retail and wholesale payments are maturing into highly automated and interactive eco-systems which will heighten the use of traditional electronic mass e-payments in the retail sector; ultimately displacing cash and cheque transactions.
It’s not just happening in the UK, numerous economies are moving away from cash or cheque-based transactions in favour of cards, as well as web-based solutions and increasingly, smartphone or tablet-based mobile solutions. So-called advanced economies are shifting to debit card solutions, while developing markets are leapfrogging to mobile payments, electronic currencies and other digital modes of commercial interaction and settlement.
Geographically, there is a clearly discernible growth trend in non-cash payments, driven primarily by emerging markets (even when accounting for the reality that growth is determined from a smaller baseline or starting point) where the demand for such solutions is strong, and the absence of legacy technology and infrastructure both enables, and requires, adoption of these new payment options. For example, India's e-commerce business jumped by more than 80 percent in 2013 and the momentum is likely to continue for at least the next ten years.