In 2015 mobile payments are projected to grow at 60.8 percent, putting pressure on payment services providers to modernize their payments processing infrastructure in order to support a range of devices, according to the 10th annual World Payments Report by the Royal Bank of Scotland and Capgemini.
According to the report, released earlier this week, e-payments are expected to decelerate to 15.9 percent annually over the next year.
“This year’s World Payments Report found the majority of traditional payments providers have made the transformation of payments processing a priority in the short-term,” Capgemini Financial Services chief sales and marketing officer Jean Lassignardie said. “However, the pressure is on from both competition and new regulatory initiatives to provide next generation innovations like Square, IZettle, and Swift for tangible customer value. This requires providers to develop a long-term vision for payments processing that can be tactically executed through strategic, agile, short-cycle projects where quick wins are captured while building longer term value-add.”
The report comes as eBay has announced its strategic separation from PayPal, which is expected to be completed by the second half of 2015, in an effort to capture more of the digital payments market, which is expected to increase from $2.5 trillion in 2014 to $4.7 trillion by 2019.
Apple is expected to roll-out its mobile payment app Apple Pay later this month on Oct. 20.
Over half of global non-cash payment growth comes from developing countries despite the fact that they only make up 25.5 percent of the market size at 93 billion transactions, the report said.
While China remains an underdeveloped market for non-cash transactions, its population and growth rate suggest that it could pull ahead of the US and Europe in the next five years. Growth rates for Central Europe, Middle East & Africa followed closely at 23.8 percent.
“Developing markets have continued their growth story, recording an impressive 18.3 percent rise compared with 4.5 percent across more mature markets in 2012,” William Higgins, Managing Director of Payments, RBS, said. “These significant growth levels, and even higher predictions for next year’s World Payments Report, represent a huge opportunity for the industry. China, for instance, is one to watch over the coming years, with the report showing that if growth rates remain at the current high level, it could become the largest market for non-cash transactions within just five years. These soaring growth rates in key markets put pressure on the global payments arena to innovate to meet rapidly increasing consumer demand.”