What's Driving the Growth in E-payments?

Michael Aragona
Michael Aragona Head of Sales, Global Transaction Banking Americas, Mizuho Americas
January 24, 2020

The volume of global, non-cash, electronic payments has grown tremendously over the past few years.

In 2017, research by Capgemini shows that the global volume of non-cash payments reached 539bn transactions. This equates to a growth of 12% over 2016 (Capgemini, 2019).

This came after an impressive rise in global payments volume of just over 10% in 2015 and 11.2% in 2014 (Capgemini and BNP Paribas, 2018 and 2017).

What is driving this growth?

Is this growth occurring mainly in a single region or is this happening across the globe? Are any specific payment types growing faster than others?

In their latest World Payments Report 2019, Capgemini note that emerging markets contributed largely to the growth in non-cash payments globally – particularly Emerging Asia and Central and Eastern Europe, Middle East, and Africa (CEMEA).

More mature markets – including mature Asia Pacific, Europe, and North America – also grew, but at a much lower rate. 

These findings are similar to those published in earlier versions of the World Payments Report in 2017 and 2018. 

Emerging and mature markets

Now we’ve established that the growth in payment volume is occurring worldwide, albeit at different rates between emerging and mature markets. But can we pinpoint the specific reasons why this growth is occurring?  Yes, we can.

Emerging Asia and CEMEA are regions that are growing quickly and embracing new payments infrastructure. However, more mature markets are experiencing slower growth and are often working with legacy payment infrastructures that are costly to replace.

Regulation in some mature markets, such as the EU, drives change and buoys their growth rates. 

However, the slower adoption of new technology in North America – particularly in the area of card technology and specifically in the contactless and mobile payment methodologies – is keeping growth down in the mature markets. 

This makes sense if we consider that upgrades in card technology often require the replacement of payment terminals and the issuance of contactless enabled cards – all of which is considered a cost to business.

Who’s benefitting from growth in e-payments?

This leads us to ask the question as to whether there are specific players within the payments industry contributing to or benefitting from the growth in non-cash electronic payments? Yes, there are.

Innovators who are contributing to and benefitting significantly from the uptick in non-cash electronic payments, include:

  • six big tech companies in particular: Google, Amazon, Facebook, Apple, Alibaba and Tencent
  • well known card companies, such as Visa and Mastercard, and
  • countless other fintech companies.

Big tech continues to account for the largest share of the global e-wallet market. 

These six firms account for the largest share of the global e-wallet market.  In 2016, they held approximately 71% with transaction volume estimated at 41.8bn – or 8.6% of all non-cash transactions processed. 

In 2017, this number continued to grow.

Interestingly, the payment platforms of Alibaba and Tencent – Alipay and WeChat Pay – have approximately 1bn users. This far outstrips the 206m users of Android Pay, Chase Pay, Amazon Pay, Samsung Pay and Apple Pay combined.

This highlights how adoption of a certain technology in a single, large market can greatly affect global statistics.

How consumers benefit from contactless

Big tech aren’t the only players benefitting from continued digital innovation coupled with the acceptance of widespread adoption of contactless technology. Consumers are quick to embrace the more convenient ways of making payments, forcing a notable reduction in the use of cash in many markets.

In terms of overall growth in card usage, debit cards have outstripped credit cards by a large margin.

Many see this trend as resulting from a lack of a mature consumer credit culture in emerging markets and a desire – particularly by younger people – to avoid borrowing to fund purchases. 

However, other drivers could be:

  • the rise in peer-to-peer funds transfers
  • the introduction of instant payments in a growing number of markets
  • and tie-ups between instant payment and telecommunication networks to offer new and innovative payment methods. 

For example, individuals can now send money to any contact in their mobile phonebook, with nothing more than a debit card number. 

The instantaneous nature of digital payments are also satisfying a desire for speed. Small merchants, and especially the rising subset who have forsaken a brick and mortar storefront, have taken advantage of this as a quick and convenient payment method for their customers who are constantly “on the go”.  This can have both positive and negative effects for society, and it will be interesting to see how this trend continues in the future.


Michael Aragona, in addition to serving as Head of Global Transaction Banking Sales for the Americas at Mizuho Bank, Ltd., is the author of Certificate in Principles of Payments (CertPAY) course material. Based in New York, Michael has more than 25 years of transaction banking advisory experience managing international teams of treasury professionals and running his own treasury consultancy business. This article also appears on the London Institute of Banking & Finance website at https://www.libf.ac.uk.

Back to top