Global E-payments & M-payments To Almost Double To $1.6T By 2013: Study

15 Sep, 2011

The number of global e-payments (online payments for e-commerce activities) is expected to grow from 17.9 to 30.3 billion transactions between 2010 and 2013, while m-payments are expected to grow from 4.6 to 15.3 billion transactions in the same period, according to a joint report by jointly by Capgemini, The Royal Bank of Scotland (RBS) and The European Financial Marketing Association. Global e-payments and m-payments collectively accounted for an estimated 22.5 billion transactions valued at €886 billion or around 8 per cent of total non cash transactions in 2010, as per the report.

Payments made with instruments other than notes and coins, like using credit transfers, direct debits, credit or debit cards or cheques are grouped under non-cash payments.

Although it did not give separate data on e-payment and m-payments for India, the study said in general, e-payments are currently more viable in developed countries, which have the Internet infrastructure and penetration, that emerging markets lack. "M-payments are gaining most traction in emerging markets, where they represent a cost-effective and secure medium for various types and sizes of cashless payment transactions, and provide access to financial services to the unbanked," the report said.

Mainstream payments cards (credit, debit, prepaid) dominate e-payments, but alternative (non-bank) providers are gaining traction. Non-bank providers accounted for about 6.5 per cent of the total in 2010 and are likely to account for nearly 9 per cent or 2.7 billion transactions in 2013.

The aggregate value of global e-payments was €824 billion in 2010 and is expected to reach €1.4 trillion in 2013. The average value of each non-bank e-payments transaction is nearly €45, far higher than for m-payments.

The number of m-payments transactions totaled 4.6 billion in 2010, and is expected to grow 48.8 per cent a year through 2013 to 15.3 billion. Non-bank providers handled about 6 per cent of m-payments (272 million transactions) in 2010 and are expected to handle 1.2 billion or 8 per cent of all m-payments in 2013.

The value of global m-payments reached €62 billion in 2010, and is expected to grow aggressively at a sustained annual rate of 52.3 per cent from 2009 to 2013, putting global m-payments at €223 billion. This growth is likely to be led by workers' remittances and retail purchases using mobile phones, the report said.

India Within BRIC:

Meanwhile, the report pointed out the number of non cash transactions in India was the lowest among the group of top emerging markets clubbed under BRIC- Brazil, Russia, India and China. India had just 2.1 billion non cash transactions compared to 15 billion such transactions in Brazil, 5.4 billion in China and 2.8 billion in Russia. India also lagged behind in the growth rate of such transactions in the past decade with compounded annual growth rate (CAGR) of 10.4 per cent between 2001 and 2009 compared to 25.5 per cent in Russia and 20.8 per cent in China. Brazil's growth was marginally below at 9.3 per cent.

"India is currently ranked as the 11th largest non-cash payments market after Russia, and has established the National Payments Corporation of India (NPCI) to spearhead the development of cheap and efficient electronic payment instruments (mobile payments, cards) and develop appropriate infrastructures," said Christophe Vergne, Leader of the Cards and Payments Center of Excellence, Financial Services Global Business Unit, Capgemini.