China to become the world’s biggest cashless society

2nd January 2020
Joe Bush

The US looks set to lose its top spot as the world’s largest cashless region in 2020 due to emerging Asian markets led by China, and the popularity of payment systems such as Alibaba's Alipay and Tencent's WeChat Pay.

Payments without the use of cash in the US are estimated to grow by 4.7% to 184.4 billion transactions in 2020, while emerging Asian markets are set to jump by 30% to 208.7 billion, according to a report by Capgemini. It added that large credit transfer volumes in India, as well as the government’s promotion of open banking systems, will also spur cashless payments in the region.

The study blamed a ‘reluctance’ by US retailers to invest in new technology as well as ‘inertia’ from regulators. However, the report stated that ‘widespread adoption’ of digital wallets, mobile payments, open banking and retail platforms from America’s Amazon, Sweden’s Klarna to South Korea’s Samsung Pay is fuelling payments without cash around the world.

Open banking

The top five cashless societies in 2017 (the most recent global figures available) were the US which rose five percent to 147.3 billion transactions, Europe up seven percent to 80.4 billion, China up 34.6% to 64.9 billion, Brazil up 7.3% to 31 billion and the UK also up 7.3% to 29.5 billion. India joined the world’s top ten cashless societies for the first time, at number ten, jumping 38.5% to 12.6 billion transactions.

Open banking regulations force high street banks to share customer data with fintechs and other financial institutions, once the account holder has approved the move, allowing customers to see all of their finances – current accounts, credit cards, loans and savings – in one place.

Regulator’s hope this integration will spur innovation and improve competition, by making it easier for customers to compare financial products and switch between them. The European Union approved open banking regulation in January.

But cash is far from dead, even in the most mature societies. The survey points out that over the last decade in 40 of the 42 most developed nations cash in circulation outpaced economic growth, adding that this ‘growing trend became especially noticeable in advanced economies at the start of the 2008 global financial crisis and is likely driven by store-of-value motives rather than payment needs.’

In Europe, cash accounts for 79% of all point of sale transactions in volume and 54% in value, where it is particularly useful for small shop purchases such as groceries.

Featured products

Latest products

Upcoming Events

View all events
Latest global electronics news
© Copyright 2020 Electronic Specifier