The FinTech segment will welcome the news that digital payments are increasingly becoming the dominant payment method worldwide. FinTech has been building up a lot of steam in recent years. Research company Accenture estimates that investments in this field totaled $12.2 billion in 2014, triple the $4 billion total in 2013. With the UK hosting a number of FinTech hubs, including the regional scene supported by Bristol corporate finance, Europe’s FinTech innovation hotspot has a bright future.
While cash remains the leading consumer payment type globally, its share of the consumer payment pie has been eroding as card payments gain in popularity, especially in more developed markets. In fact, 2014 marked the first year in which the volume of digital payment types surpassed that of paper-based payment methods.
The popularity of cash as a consumer payment option has decreased globally as consumers increasingly opt for non-cash methods, including both electronic direct and card products. The share of cash within the total consumer payments market has dropped from 54% in 2000 to 43% in 2014. While non-cash payments are making inroads into cash payments on a global scale, the cash culture does in many emerging markets. In fact, three-quarters of payment volume in Eastern Europe and the Middle East and Africa regions was transacted in cash in 2014. In addition, of the top 10 markets with the greatest cash reliance in 2014, all were emerging markets. Nevertheless, the reliance on cash in these markets is expected to continue to dwindle as consumers there discover digital payment methods.
On a global scale, digital payment volume, which refers to both card and electronic direct payments, continues to outpace paper-based payments, which includes both cash and other paper payments. The advantages of digital payments over paper payments remain convenience and security, as well as the reward incentives often associated with card payments. The reliance on card payments is more pronounced in developed markets.
Cash, which has long been the dominant consumer payment type worldwide, will finally relinquish its title to card payments in 2016. The gap is projected to widen thereafter. Together both types of digital payment types are projected to continue to outpace the growth in paper-based payments in the foreseeable future. This shift from paper to digital payments will be driven by consumers in both developed and emerging markets
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