First and foremost, the report expresses doubts that deadline for the migration to Sepa in the eurozone will be met by the February 1 2014 deadline.
On the innovation front, the report underlines the growing importance of “payments acquisitions” as a result of “the need to address new and changing customer demands, the convergence of channels, and the entry into the space of nonbank players.”
Noncash payments have grown by a resilient 6.4% on average in North America and 4.2% in Europe in the last two years. However, this is mild in comparison to that seen in emerging Asia—which saw growth of 22.1%. Overall developed markets saw noncash payments grow just 6.2% while emerging markets as a whole averaged 18.7% growth. Nonetheless, the report forecasts that it will take developing markets at least 10 years to overtake mature markets in volume terms.
Industry estimates suggest mobile and electronic payments will grow respectively by 58.5% and 18.1% annually through 2014, reaching a total of 28.9 billion and 34.3 billion transactions, respectively. Increased penetration of smart phones and the Internet, thanks to technology advances and innovative product launches, have made this an important area of business for banks and nonbanks, but the reports warns on excessive optimism on global m-payments volumes.
At the same time, new instruments in the payment industry have created opportunities but also increased opacity in the global payments markets, with potential overlap between e- and m-payments.
Teresa Connors, head of client engagement, transaction services market engagement, RBS International Banking, specifies that: “In the WPR we define m-payments as a form of payment where the mobile phone is used as a payment method—not just as an alternative channel to send the payment instruction—and the payment information flow takes place in real-time.”
The meteoric rise in mobile payments has created a potential “black hole” in statistical data due to inconsistent reporting and lack of a common definition of this payment type, and this means that it is difficult to make strategic decisions. As a result, Connors adds, “the estimates on the size of the mobile payments [market], on a volume gap basis, could be as wide as 50%.”
The number of mobile payment users worldwide is expected to surpass 212 million in 2012, a 32% increase from 2011, the global m-payments value reached $256 billion in 2012. It is expected to grow three-fold by 2014 to a total of $796 billion.
For corporates, the report suggests that there is “no real appetite” at the moment to make mobile payments at the commercial rather than consumer level, but the accent is rather on the convergence of payments mechanisms, on the impact of new regulations like Sepa. They are focused not so much on the technical side of innovation, but on “on-time” and “cheap” payments delivery.