Every year Capgemini and BNP Paribas team up to prepare their World Payments Report for the year, and this year is no different. The new report released by them has revealed some very interesting points about the global financial system and how the world is going to pay for things in the future. We went through the entire report to extract the major outcomes given in it, and here we’re to present before you what we found. Let’s take a look on the major takeaways of World Payments Report 2018:
#1. Digital payments are (and will continue to be) on the rise
The first thing that becomes clear from WPR 2018 is that non-cash payments are on the rise worldwide. The rise is faster in major emerging economies like China and India but slower in more developed economies like Europe and America. In China, digital transactions grew at 25.8% during the last fiscal, while in our own country India they grew at an even faster rate of 33.2% (thanks to NaMo and DeMo). Majority of these transactions in China are done through e-wallet services like Alipay and WeChat Pay. In India too the wallet companies like PayTM, PhonePe and MobiKwik have become forces to reckon with. The global digital transaction volume is estimated to remain around $600 billion for the current financial year, and it’s projected to grow to $876 by the end of 2021.
#2. DLT needs to keep up with the pace
While the world moving towards digital payments is overall a good development for cryptocurrencies, not everything is sunshine and rainbows. According to WPR 2018, the distributed ledger technology is currently not developed enough to meet the high demands of global financial infrastructure. It still has a long way to go and reach that scale which is needed to replace some meaningful part of existing financial infrastructure, and regulatory uncertainty is slowing down the path to reach such a scale. Lack of interoperability is another issue concerning DLT, and financial institutions around the world don’t want to trust this new technology largely because of these two issues as of now.
These findings were based on a survey of financial industry employees conducted by Capgemini and BNP Paribas. A huge number of respondents (as many as 86%) cited lack of interoperability as a major issue for adoption of DLT. Similarly, 83.1% cited the lack of regulatory clarity as a major concern, while 77.8% said that they were skeptical about DLT’s scalability.
Long story short is that digital payments are on the rise, but if crypto payments have to earn their meaningful share in this space then a lot of interoperability and scalability needs to be built into crypto payment ecosystems. Regulatory uncertainty also needs to go away from major economies to pave the way for mass adoption of blockchain based payments. The blockchain technology is here to stay, but we’ll have to see how long it takes for it to gain its true momentum of growth.