The World Payments Report reported that global non cash transaction volumes grew 11.2% during 2014-15 to reach 433.1 billion, the highest growth of the past decade, and slightly above last year’s prediction.
Developing nations increased global non-cash transaction share, with two regions in particular fuelling this growth.
Asian countries experienced impressive growth in non-cash transactions across all regions due to an increased adoption of mobile payments and wallets such as Tencent’s WeChat Pay and Alibaba’s Alipay, with a growth rate of 43.4%. This was particularly driven by China’s phenomenal 63.2% growth in non-cash transactions, a result of higher adoption of digital payments initiative in rural areas and a shift from cash to mobile payments among payment service users.
The second highest growth of 16.4% was recorded in CEMEA (Central Europe, Middle East and Africa), recording the highest growth in card transactions and credit transfers in countries such as Saudi Arabia and Poland.
In Australia, contactless payments account for about 70 to 80% of MasterCard and Visa payments.
Debit cards and credit transfers were the leading digital instruments in 2015, while check usage continues to decline globally.
Transaction volumes for all payment methods except cheques increased. Payments by card grew faster than other instruments, an indication of superior convenience and security.
Globally, debit card market share increased to 70.5% while credit card market share dropped from 30.1% in 2014 to 26.5% in 2015.
In Australia, almost 70% of credit card transactions are contactless, and there has been notable growth in volumes of credit card, but also of scheme debit card transactions.
Despite the increased adoption of digital payments, cash continues to be in the mainstream, especially for low value transactions.
Cash is the main method of payment for smaller purchases such as food, personal care supplies, general merchandise and gifts. It is also used in peer to peer transfers despite the increasing popularity of money transfer apps such as Venmo and PayPal.
Key factors contributing to the persistency of cash include the anonymity associated with cash transactions, lack of a modern payments infrastructure, and limited or no access to the banking system in developing markets.
In Australia, cash in circulation remains steady at around 4-5% of GDP.
The World Payments Report can be accessed here.