For many people, the sight of paper banknotes or coins made of such an old-fashioned material as metal is rare.
There are now many countries around the world, in every continent in both hemispheres, in which everyday transactions are conducted using a digital contactless payment system via smartphones, watches or with bank cards which require a simple touch onto a device which receives payment, with the shopper simply taking away their goods after hearing that familiar ‘beep’ sound.
It is now relatively commonplace for a large number of people to not see cash registers; physical tills containing cash or have to wait whilst a cashier counts out change and hands a series of notes and coins back after a purchase has been made.
You simply click and go.
Whilst it is the case that many regions of the world now operate on this cashless basis, digital payments have still not replaced traditional cash, and there are still large proportions of the global population which do not use contactless or digital payments at all.
Things are changing however, and research produced this week determines that in 10 years, after a compound annual growth rate of 15.6%, the digital payment market globally could reach $500 billion.
The research, conducted by Indian marcontactingute Prudour Ltd, looked at the factors which have driven further moves toward contactless and digital payments that have accelerated the move away from cash in many regions of the world over recent years, including government restrictions imposed on handling certain items or making contact with other people during the lockdowns of 2020 and 2021 in many parts of the world.
Currently, the global digital payments market stands at $117 billion, therefore a step up to $500 billion over ten years would reveal a huge uptake in digital payments, further consigning traditional analogue payment methods to the history books.
In Britain, one of the world’s most advanced societies for digital payments to the extent that the country has a specific division of its national financial markets regulatory authority dedicated to regulating the digital payments industry, leading the way forward and creating huge increases in transaction volume via digital methods is noticeably clear.
Whilst the research by Prudour shows the value of the global payments industry increasing strongly in the next ten years, the actual transaction value today and its projected increase go even further.
In Britain alone, the total transaction value in the Digital Payments segment is projected to reach US$439.30 by the end of 2023.
Total transaction value in the United Kingdom, according to Statistica, is expected to show an annual growth rate of between the end of this year and 2027 of 13.97% resulting in a projected total amount of US$741.30 billion by 2027.
To put that into perspective, digital transaction value in China, one of the world’s largest digital payments markets and the world’s most populous nation, is expected to reach a cumulated transaction value of US$3,639.00 billion by the end of the year.
Given that China’s economy requires the use of electronic payments and that the entire economy and method by which the public interacts with the commercial ecosystem is done via mobile phones, and that it has almost 1 billion smartphone users whom all transact digitally compared to the United Kingdom’s approximately 40 million unique smartphone users according to USwitch, and a free market economy in which the government does not insist on everything being conducted via mobile platforms, the projected transaction volume in the United Kingdom on a per capita basis is actually higher than that of China by the end of this year.
It is, therefore, clear that digital payments are accelerating rapidly in uptake everywhere globally and that the United Kingdom is one of the world’s leaders in moving this forward, along with some other Western European economies.
Given this strong dynamic, choosing a company as your partner on the digital journey is critical, and modern FinTechs are a natural choice.
Monevium is the Trading Name of Advanced Wallet Solutions Limited, a company registered in the UK under company number 10251711 and is regulated by the UK’s Financial Conduct Authority under Firm Reference Number 766038.
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