In this release at the Capgemini site we have the notification and discussion summary of the latest world payments report from Capgemini, the Paris-based global consulting firm offering services in digital transformation, technology, and engineering. The report’s findings echo (and to some extent confirm) what we and many other industry participants have been pointing out for the past year-plus: that the acceleration of digital financial operations is underway, and the way payments are done is and will continue to undergo rapid change. We have been informing members about the need for corporate banks especially to undergo a modernization initiative or risk being left to history books. The Capgemini report can be downloaded at their site as well, for those interested in reviewing the full report.
‘Payments are entering a new experience-driven era (Payments 4.X), ushered in by an accelerated transformation timeline due to COVID-19 and the growing digital appetite of customers, according to the World Payments Report 2021 published today by Capgemini. Led by APAC, the demand for digital payment options is greater than ever before, along with the expectations for fast transaction settlements, instant payments, e-money, failsafe security, and wow-factor customer experience…
The report found that nearly 45% of consumers frequently use mobile wallets to make payments (>20 transactions a year) up from 23% in the 2020 poll. Furthering this trend, global B2B non-cash transactions will increase to reach nearly 200 billion transactions by 2025, according to Capgemini estimates…
“As digital payments and mobile wallets become more the norm than the exception, payment providers must find ways to meet consumer hopes for speed and ease of use,” said Anirban Bose, CEO of Capgemini’s Financial Services and Group Executive Board Member. “To embrace the next generation of payments, banks must build a complimentary partnership ecosystem to keep up with the rate of change.”
The report sources are comprehensive, covering 44 payments markets and thousands of respondents. Those readers who subscribe to the CEP service will be reasonably informed about these trends since many of our research topics are directly intertwined with findings in this report. We would recommend linking out to the Capgemini site and downloading the report for more detail. Some of the headlines include the following:
‘As spending rebounds, next-gen payments will drive non-cash transaction growth. The report found that with spending expected to rebound in 2021, non-cash transactions will rise, with instant payments, e-money, and next-gen payment methods − Buy Now Pay Later (BNPL), invisible, biometric, and cryptocurrency − driving the non-cash transaction growth
With customer expectations increasing, legacy payments infrastructure is being stretched. As digital adoption continues to accelerate, increased volumes and instant processing requirements are stretching legacy payments infrastructure. About 55% of the surveyed executives said their technology investment priorities were payments infrastructure modernization (real-time payment system implementation, API integration, ISO 20022 migration, cloud transformation). Providers need to prioritize digital capabilities to remain competitive.
Regulators strive for balance between innovation and safety. Payments service providers have been the beneficiaries of a new balanced approach to key regulatory and industry initiatives (KRIIs) to promote and facilitate a payments-friendly environment
Payment firms need to future proof with Payments 4.X. With spend predicted to increase and non-traditional payment methods poised for growth, future-proofing firms will embrace the elements of Payments 4.X, including data, shared infrastructure, platform capabilities and embedded finance to deliver superior customer experience. ‘
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group