China among Emerging Countries Leading in Cashless Payments: Report
A non-cash boom is being driven by developing markets, and these emerging markets are becoming increasingly important players in the adoption of cryptocurrencies.
The U.S. continues to dominate in terms of numbers of non-cash transactions reaching 148.5 billion transactions, according to the World Payment Report 2018 jointly compiled by French banking group BNB Paribas and IT consultancy Capgemini. While the report indicated that the growth is shifting to developing markets, with Russia (36.5%), India (33.2%), China (25.8%) and South Africa (15.1%) being the fastest growing markets.
More and more people around the world are going with cashless payments and Chinese are among those leading the trend. The report predicted that the U.S. would lose leadership in non-cash transaction volumes to China by 2021.
China is one of the world’s leading players in mobile or e-payment, which has made it possible for Chinese to buy a pancake at roadside breakfast stalls, order food online, pay credit card bills, and manage stock accounts with just a smartphone. The peer-to-peer payment market has been dominanted by e-payment operators Alipay and WeChat. It remains to be known whether bitcoin, the peer-to-peer digital cash system, could make it into this market considering another big hinder – its crypto-unfriendly government. The fact is China is among the most active markets in bitcoin over-the-counter transactions.
While compared to other major economies on the continent, South Africa has allowed digital currency-based payments, trades and investments to flourish almost unhindered.
Cryptocurrency- and fintech-related developments are coming fast in Sub-Saharan Africa recently, as leading crypto exchange Binance opened a branch in Uganda. In Rwanda, meanwhile, the government has teamed up with a British blockchain firm for a project that will allow for conflict-free tantalum sourcing.
Anirban Bose, CEO of Capgemini’s Financial Services, said it is critical for banks to find ways to tap into cryptocurrencies and other non-cash payment methods if they are to remain relevant.
Speaking of technologies, the report also concluded that distributed ledger technology (DLT) is not capable of meeting financial market demands at present, stating that DLT innovation and projects were often confined to research labs or to the proof-of-concept stage. A lack of interoperability between DLT and banking systems hinders the implementation of scalable solutions.