China surpasses Brazil to rank third among non-cash transactions markets
Within the top-10 markets for non-cash transactions volumes, China climbed to third place with 38.1 billion transactions, surpassing 2014’s number three market Brazil, which fell to fourth place with 29.0 billion transactions (Figure 1.3).
China’s rise was fuelled by its phenomenal growth rate of 63.2%, a result of higher adoption of digital payments initiatives in rural areas and a shift from cash to mobile payments among payment services users. China’s e-commerce market is expected to record a compound annual growth rate (CAGR) of 23% through 2020.
Multiple factors will fuel this growth, including expansion of online retail categories such as fast-moving consumer goods facilitated by upgraded logistics infrastructure, and new rural online shoppers.
The payment channels of the country’s top two e-commerce companies, Alibaba Group’s Alipay and JD.com’s WeChat, have fuelled the phenomenal growth of mobile and online sales. The 2016 introduction of regulations to curb cash deposits through alternate payment instruments by the People’s Bank of China is expected to stabilise the growth in coming years.
Another ranking change occurred in the eighth position as Russia, with 30.0% growth and total transactions of 12.7 billion, overtook Canada, which recorded 12.0 billion transactions on growth of 4.1%. Russia’s climb was due to improved financial literacy and card- acceptance infrastructure.
Asia Pacific markets China, South Korea, Japan, and Australia are all among the top-10 non-cash markets. South Korea grew at 11.9% with total transactions of 21.1 billion, to become the only country in the top 10 — aside from China and Russia — to achieve double-digit growth.
This was due to the growing popularity of cards and FinTech payments offerings. Because of India’s November 2016 demonetization efforts, the market witnessed increased volume of digital payments and expansion of e-payments infrastructure (POS terminals increased from 1.5 million to 2.7 million between December 2016 – March 201710, 40% of which are mPOS terminals).
To increase digital payment adoption, India has announced an aggressive target of 25 billion non-cash transactions for 2017-18, with mobile, government benefits/subsidy transfer, and micro (including tollway and public transport) payments being priorities.
Further growth is expected in South Korea as cashless initiatives such as the T-money card are rolled out for public transportation payments. Australia experienced impressive 9.9% growth in 2015 across all payment instruments as contactless payments volumes grew along with direct-entry payments.
An electronic payment instrument, direct-entry payments comprise direct-debit and direct-credit transactions and are used by businesses to credit employees’ accounts with salary payments and by government departments for regular payments. In recent years, direct credit is also being used to provide widespread access to internet- based (sometimes called ‘Pay Anyone’) and phone- based banking services. Businesses initiating direct credits are known as Credit Users.
The United States remains by far the top non-cash market, with 135.4 billion transactions, almost double that of the Eurozone, at number two, with 70.5 billion transactions.
(Source: http://www.paymentscardsandmobile.com/china-surpasses-brazil-rank-third-among-non-cash-markets-us-still-tops-league/)