The Covid-19 pandemic is helping to accelerate cashless payments, which are set to double and even triple to 1.9 trillion transactions by 2030 from the current 1 trillion, according to a report by PricewaterhouseCoopers (PwC).
It said in a statement yesterday Africa’s sectoral growth volumes were set to trail only the Asia Pacific with growth of up to 78 percent from 64 percent.
The Asia-Pacific region was expected to grow the fastest with cashless transaction volume growing by 109 percent from 2020 to 2025 followed by Africa, 78 percent from 64 percent, and Europe, 64 percent from 39 percent, while Latin America comes next at between 52 percent from 48 percent and the US and Canada will have the least rapid growth to about 43 percent from 35 percent.
Chantal Maritz, strategy and payments transformation lead Africa at PwC, said Covid-19 was a catalyst for change.
“We have seen the rapid deployment of payment services across Africa. Current market conditions have given rise to the need for more financial inclusion, as well as greater innovation and collaboration among financial services players.“
She said as an emerging market, unencumbered by large amounts of legacy technology, South Africa had the potential to develop a modern payments infrastructure and a cutting-edge payment platform that places customers at the core.
In Africa, mobile operators and retailers were taking the lead in equipping customers with cashless means of payment. They were also playing a key role in bringing about financial inclusion and trust in digital payments. In addition, regulators are stepping in to drive financial inclusion. It was also being strengthened by the need of many African migrant workers to send money home via affordable cross-border payments, PwC said.
South Africa had also embarked on its second Central Bank Digital Currencies (CBDC) project to explore the use of both a wholesale CBDC and wholesale settlement tokens for interbank use, it said.
Kurtis Babczenko, a global banking and capital markets leader at PwC, said, “A cashless world is in plain sight. The Covid-19 pandemic reinforced an already growing shift to digital payments and likely drove a three- to five-year acceleration in their use.
The acceleration towards digital payments will create new opportunities for the entire payment ecosystem, including banks. But it will also expose weaknesses for those not prepared to adapt.”
PwC’s survey, Payments 2025 & beyond – Navigating the payments matrix: Charting a course amid evolution, indicated that even before the Covid-19 pandemic, cashless payments – like sending a text to pay for a bus ticket in Turkey, or using a QR code to buy groceries in China – were evidence of a steady shift to a digital economy – a shift that might ultimately lead to a global cashless society.
It revealed that the financial-services industry was in the midst of a significant transformation, accelerated by the Covid-19 pandemic.
It identified that given the key role digitisation plays in the financial lives of more and more of the world’s population, electronic payments were at the epicentre of this transformation.
“As digital money draws a stronger interest, the financial services industry must recognise the entire infrastructure of payments is being reshaped, with new business models emerging,“ PwC noted.