Global cashless payment volumes are predicted to increase by more than 80 per cent from 2020 to 2025, from about 1 trillion transactions to almost 1.9 trillion, and to almost triple by 2030, according to a study by PwC released this week.
PwC’s survey reveals how, even before the Covid-19 pandemic, cashless payments like sending a text to pay for a bus ticket, or using a QR code to buy groceries are evidence of a steady shift to a digital economy – a shift that might ultimately lead to a global cashless society.
89 per cent of respondents agreed that the shift towards e-commerce would continue to increase, requiring significant investment in online payment solutions. Not only that, but they agreed (97 per cent) that there will be a shift towards more real-time payments.
Underneath the shift to cashless lies a larger, more profound change. Not only are traditional ways of paying for goods and services — including the humble paper check and analogue invoices — set for radical transformation, but the entire infrastructure of payments is being reshaped, with new business models emerging.
Asia-Pacific will grow fastest, with cashless transaction volume growing by 109 per cent until 2025 and then by 76 per cent from 2025 to 2030, followed by Africa (78 per cent, 64 per cent) and Europe (64 per cent, 39 per cent). Latin America comes next (52 per cent, 48 per cent), with the US and Canada growing least rapidly (43 per cent, 35 per cent).
PwC findings reveal the key themes that are influencing the payments industry and highlight the importance of how the industry responds to these trends. As a result, leadership teams of financial services businesses need to understand each of these trends in order to properly plan for their future:
Inclusion and trust
In developing countries, financial inclusion will continue to be driven by mobile devices and access to affordable, convenient payment mechanisms. By 2025, smartphone penetration will likely reach 80% globally.
CBDCs (Central Bank Digital Currencies) are predicted to have the biggest disruptive impact over the next 20 years.
Looking ahead, 86 per cent of our survey respondents agreed or strongly agreed with the prediction that traditional payment providers will collaborate with fintechs and technology providers as a main source of innovation.
Battle of the rails
Senior payment professionals expect important regional developments towards a payment infrastructure in which card and other transactions run on joint account-based payment rails.