By John Reynolds on Tuesday 6 October 2020
Capgemini’s World Payments Report 2020 reveals a new payments landscape and says that a dampened economy will slow down payment volumes.
Fifty per cent of consumers are using a challenger bank to make some payments, while nearly four-in-ten have discovered a new payment provider during lockdown, as the broad trend of consumers switching from cash to digital payments continues apace, new research shows.
Capgemini’s World Payments Report 2020 reveals a new landscape in the payments industry because of changes in consumer behaviour, increased payments volumes and the impact of Covid-19.
“Covid-19 has accelerated the rate of innovation within the payments space to quickly form the ‘next normal’, requiring payments firms to be digital masters almost overnight," said Anirban Bose, CEO of Capgemini’s Financial Services.
“Now more than ever, payments providers need to deliver differentiated offerings that emphasize speed, convenience, and a superb end-to-end customer experience."
Key findings in the report indicate that customers are continuing to shift away from cash to digital payments. It found that 30 per cent of consumers are using a big tech company for their payment services while 50 per cent are using a challenger bank for some payments.
As of April this year, more than 38 per cent of consumers said they found a new payment provider during lockdown.
The report adds that internet banking and direct account transfers (68 per cent using them) are still the preferred payment method throughout the global health crisis, ahead of contactless cards (64 per cent), then came digital wallets (48 per cent).
Digital wallet users, the report says, are expected to jump from 2.3bn in 2019 to 4bn by 2024.
Capgemini said that payment volumes are predicted to increase, but will slow down because of a dampened global economy.
An annual growth rate of 12 per cent in non-cash transaction is expected in the years 2019 to 2023, a slowdown compared to 14 per cent from 2018 to 2019.
The increase in digital payments has been driven by wider smartphone usage, booming-commerce and digital wallet adoption.
In 2019, Asia-Pacific was the non-cash transaction volume leaders in 2019 with 244bn transactions.