The future is digital and is valid in the case of payments. A study shows the fabulous amount that these transactions will reach in just two, three years.
The future means digitalization, and transactions have made great strides in this direction. Digital payments have been preferred especially in the pandemic, a situation that has accelerated the adoption of this type of financial behavior. An Accenture study also shows that the direction is clear.
In 2023, ie in less than three years, digital payments will represent 7 trillion dollars in 2023. And the growth will be huge in the coming years.
Digital payments worth tens of trillions of dollars
The pandemic has accelerated the transition from cash to digital payments. This means, among other things, that banks must also prepare with high-performance infrastructure to support such a thing.
Accenture estimates that nearly $ 420 trillion worth of $ 7 trillion transactions will go from cash to cards and digital payments by 2023 – and will increase to $ 48 trillion by 2030. The rapid transition to digital payments has put additional pressure on banks , three quarters (75%) of the directors of financial institutions interviewed said that the pandemic had accelerated their plans to modernize payment systems.
“COVID-19 has accelerated the transition to digital payments at a rate that banks could not have predicted. The pandemic will permanently change the way consumers buy and pay for products, as they put convenience above all else. Although so far banks’ investments in new payment systems have focused primarily on compliance, in the future the value will be generated by adapting to changes in consumer dynamics and improving the consumer experience, “said Sulabh Agarwal, head of the division. Accenture Payments globally.
The survey also shows that three quarters (75%) of banks believe that the modernization of payments is determined by changes and national regulations of payment infrastructure, which include improving payment systems from bank to bank, new industry standards with ISO20022 and Open Banking.
Some faster, others slower
The transition to digital payments varies by market. Where the digital giants in the field are present, things are clear. The tone is obviously set by the Americans.
The biggest transformation will be in the US, followed closely by the UK, as consumers opt for new payment methods, and non-bank financial institutions take advantage of the opportunity to provide payment services.
In China, digital wallets are rapidly replacing cash payments – 76% of 2019 transactions come from digital wallets, up from just 12% in 2014 – as Chinese consumers have become accustomed to using mobile apps and QR codes to pay at restaurants and stores for many years.
“COVID-19 has made consumers more open to digital financial transactions and this change will increase competition as alternative payment providers struggle for market share. The timing of electronic payments for banks varies greatly depending on the market and depends on the maturity of the transition to digital payments. In mature markets – such as Western Europe, where payments have been largely standardized – we expect to see only marginal changes. The biggest opportunity will be in markets in Southeast Asia and Latin America, where cash consumption dominated and in some regions even increased during the pandemic, ”said Alan McIntyre, who leads Accenture Banking. globally.
Although many of the bank executives surveyed cited revenue growth as a key target for their payment modernization programs, only 13% said their bank’s revenue from payments increased by more than the average market growth rate of 6%. in the last three years and only 16% expect to increase payment revenues more than the average anticipated growth rate of 5% over the next three years.
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