Non-cash payments set to reach 1.96 trillion transactions by 2029 according to Smithers Pira

Despite an established pedigree as the preferred medium of exchange for thousands of years of human history cash, initially coins, but now banknotes, are increasingly under pressure from digital payment methods – credit/debit cards, credit and bank transfers or electronic wallet applications, and even virtual or cryptocurrencies.

These are also eroding demand for cheques the first non-cash payment method to challenge the dominance of physical currency.

Cash is and remains fundamental to the global economy. It will however face increasing challenges and changes in use across the decade 2019–29: Smithers Pira’s latest market report ‘The Future of Cash Cycles to 2029' forecasts non-cash payment growth at 10.5% across 2019–29, reaching a total of 1.22 trillion transactions in 2024 and 1.96 trillion in 2029.

A cashless society cannot be seen yet and is not projectable. The evolution of the world payment landscape will continue to be a mix between physical currency and alternative electronic payment options. It is a core functions of a Central Bank to provide a reliable, sustainable and efficient payment systems, which the general public can use with confidence. Therefore, Central Banks have to support both systems to ensure redundancy: (a) in form of e-payment platform and (b) in form of a cash infrastructure. The future challenge will be to develop and maintain both ecosystems including a cash and cash less infrastructures in a sufficient manner.

Jens Eberhardt, Author of the report

The report provides in-depth analysis on the global payment trends affecting the industry including:

Cash - Despite the increasing availability of e-payment options cash will continue to be an

Important payment option for nearly all consumers across the next 10 years, although in some specific markets such as china, Sweden and Russia demands for cash will decline.

Instant pay- As it has evolved, the emphasis in the digital payment industry is increasingly towards, instant payment with technology leveraged to provide real-time or near-real time

processing of the payment. E-commerce and e-payment - E-commerce amounts currently of 10% of the total retail sales worldwide. It is expected to grow by 2030.

Digitalisation-Biometrics and Security- The Amazon Go stores make use of the newest digitalization technology in CCTV surveillance including cameras with face recognition and sensory recognizing product weight and size.

Initiatives in Financial inclusion -In countries where people cannot access a reliable financial infrastructure they have to use cash in all matters of life. This can only be overcome once the level of financial inclusion is deepened in these developing countries.

Bitcoin and Cryptocurrencies In the year 2008 the break-away of the financial crises and the following worldwide downward-trend at stock exchanges caused a global shock. Possibly it was no coincidence, that in the same year the cryptocurrency Bitcoin based on blockchain technology appeared with the promise for a new, a better money. Bitcoin has gained a good market penetration in some distinct areas of online trade, including trade in so called dark web markets such as Silk Road. It has also seen a spike in demand and value peaking on 17 December 2017 at a price of $19,783 per bitcoin. This was derived from speculation on an unsecured product however. Once the speculation bubble burst it lost value rapidly.

Smithers Pira’s latest market report,’ ‘The Future of Cash Cycles to 2029’ provides comprehensive analysis on the future evolution in the cash and payment market. Based on the current understanding of the payment landscape, it focusses on essential trends affecting currencies as medium for payment and storage including the evolution of electronic alternatives to cash as major payment methods. The future of payments will be analysed for each electronic medium in comparison to cash, describing how payment methods work, what value proposition are addressed to users and who is supporting the value chain. It provides forecasts per payment system over next 10 years for the world regions, and shows drivers vs. technical, economic and regulatory barriers for wider utilisation.

-ENDS-

'The Future of Cash Cycles to 2029' is available for £4,750, $6,500, €5,250 

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