Payment systems review: Innovation pulses through the lifeblood of commerce
Competition, consolidation and innovation are pushing forward development in payment and collection systems. By Jack & Wolfi Large
Payments and collections are the lifeblood of commerce and of banks’ cash management business. The launch of the Single Euro Payments Area (SEPA) and new technologies are creating new opportunities and threats and new players in the business, and raising fundamental questions about the future. Some payment systems are evolving slowly, others are changing rapidly and fundamentally. The one consistent theme is the ever-increasing level of competition and innovation.
By transactions, cash still dominates the global payments market with well over 60% of transactions, even in the developed countries. But, by value, non-cash payment systems, particularly in the developed countries, already take well over 50%. The usage of non-cash payment systems still varies considerably by country; for example, direct debits represent more than 40% of payments in Germany compared to less than 10% in the US, cheques around 40% in the US compared to less than 1% in Germany, and payments by card more than 60% in Canada compared to around 15% in Germany.