Global non-cash transaction volumes to hit 1.3tn in 2023, Capgemini finds

The Capgemini Research Institute’s 2023 World Payments Report reveals non-cash transaction volumes will reach 1.3 trillion by 2023 globally. As consumers and businesses adopt new digital payment schemes, the report suggests this growth will accelerate to 2.3 trillion by 2027 growing at a rate of 15% annually. At a regional level, digital payments will grow by 19.8% across Asia Pacific, 10.7% in Europe, and 6.5% in North America by 2027.

What were the findings of Capgemini’s report?

The expanding digital payment infrastructure, regulations, and open banking are swiftly changing how clients and businesses make payments. By 2027, new payment methods instant payments, e-money, digital wallets, account-to-account, and QR code payments will make up about 30% of total volume, with traditional non-cash payments checks, direct debits, cards, and credit transfers dropping to around 70% of non-cash transaction volumes.

Treasurers express dissatisfaction with cash management services

Over half of corporate treasurers believe the rising globalisation of trade and ongoing supply chain disruptions have driven demand for efficient cash management services (CMS). Another third said evolving risks (geopolitics, and cybersecurity) made CMS critical, while nearly 30% call out rising inflation causing their growing need for better cash management.

As corporations navigate economic headwinds, current CMS offerings largely underwhelm multinational corporates, despite having more than 27 banking relationships on average to meet treasury needs. Over 70% of enterprise executives said they face issues in dispute negligence, poor credit risk assessment, and delayed or duplicate payment processing.

However, the solution is clear with around two in three (63%) surveyed payment executives citing legacy infrastructure barriers as the biggest hinderance to providing efficient CMS.

Jeroen Hölscher, Global Head of Payments Services at Capgemini
Jeroen Hölscher, Global Head of Payments Services at Capgemini

“The current model of tackling cash management services needs an overhaul. Corporate executives are feeling the pressure from mounting inefficiencies across lengthy cash conversion cycles,” said Jeroen Hölscher, Global Head of Payments Services at Capgemini.

“What’s clear from our new report is that a robust digital foundation is the path forward to optimise the value chain. By simplifying the complexity of operating and IT models, banks and payment firms can boost productivity and performance to manage client treasury needs.”

Clients demanding a retail-like payment experience from banks

New payment solutions and key industry initiatives are fueling the growth of digital payments among enterprises. Expectations are also changing, with 63% of corporate clients are demanding a retail-like payment experience from their banks in 2023 according to the report.

The payments sector has been at the forefront of digitisation, however, it’s coming at a cost with compliance to local, regional and international regulations (including ISO20022 and SWIFT global payments initiatives) leaving limited room for investments in future innovation.

Payment executives cite 80% of traditional payment revenue sources are stressed and service providers must rebalance their focus between retail and commercial payments. Over 50% believe commercial payments offer a better profit potential than retail payments.

Nurturing corporate alliances requires efficient cash management

End-to-end digital transformation in transaction banking requires top-down commitment, cohesive planning, and a unified purpose for structural reforms. Sixty-seven percent of bank executives acknowledged that partnering with corporate clients reduces the threat of disintermediation by FinTechs and PayTechs; and 57% of payments executives said strategic banking partners enjoy increased cross- and up-selling opportunities because of the alliances.

To help nurture strategic cash management relationships with global corporate customers, the new research report offers banks and payment companies a three-layered strategy:

  • Simplify the back office to enable innovation and agility
  • Perform with platforms to boost cash management efficiency
  • Engage with corporate clients as strategic partners, not service providers