Cards lead cashless payments growth – just ahead of ATM cash withdrawals

Cashless Payments Worldwide by Type [click to enlarge]

There were 417 billion cashless payments made in 60 countries worldwide in 2014, according to a study by RBR, Global Payment Cards Data and Forecasts to 2020. More than half of all cashless payments are made by card, with the figures showing that cards accounted for 55% of the 417 billion cashless payments made worldwide in 2014, up from 48% in 2010. The number of card payments rose more quickly than any other cashless payment instrument, at 12% a year since 2010. Use of cards for low-value payments is growing – a trend supported by the rollout of contactless cards and POS terminals.

Credit transfers, generally used for higher value transactions such as salaries, grew by 8% year, with greater use in Asia Pacific than any other region (41%) – in China they account for 67% of cashless payments.

Direct debits have seen their global share decline slightly since 2010, despite increasing by 3% per year. They are typically used by consumers for regular payments, such as rent, utility bills and taxes. Direct debits’ highest share is in Western Europe (23%).

Cheques are the least common form of cashless payments and they are becoming increasingly rare in all regions, with usage falling by 10% per year between 2010 and 2014. Even in the US, France and India, where cheques are still used regularly they are declining. Cheques’ highest regional share of cashless payments is in North America (12%), while in central and Eastern Europe their share is “negligible” according to RBR.

According to the study, there is “limited scope for cards to displace credit transfers, but a greater potential to replace cheques and to a lesser extent direct debits, as it is relatively common for these instruments to be used for consumer-to-business transactions”.

Despite the strong growth of 7.6% per year seen in the volume of cashless payments since 2010, RBR’s research shows that there is evidence that cash is proving resilient on a global level; ATM cash withdrawals have been rising almost as quickly over the same period, at 7.1%.

Credit transfers tend to be used for high-value payments and therefore account for by far the highest share of value (85%). In contrast, cards account for just 2% of the value because of their typical use for comparatively low-value purchases. Direct debits and cheques account for 7% and 6% respectively of the cashless payment value.

Credit transfers account for more than 75% of the cashless payment value in all regions except North America, where they represent just 38%, as cheques are also frequently used for high-value payments, accounting for a similar proportion of value.

There has also clearly been a rise in consumer trust in electronic payments as a result of their enhanced convenience and security. Cards, in particular, are increasingly being used in sectors which would have been the preserve of cash in the past.

Demand for cash remains strong in some regions, however, and even in those where consumers have been quicker to embrace other payment methods, there has been a reluctance to completely abandon cash.