At the end of January, 17 of the 19 central banks in the eurozone ceased printing the 500 euro note; the remaining two countries, Germany and Austria, are set to bid a final farewell to the violet banknote at the end of April. It is not only the notes that are dying a death at the moment, though: coins, too, are increasingly being banished from day-to-day life. Finland, Ireland, the Netherlands, Belgium and Italy, for instance, have already done away with one and two-cent pieces. While on the one hand money printing presses are increasingly falling prey to rust, on the other the range of contactless payment options is widening rapidly. PayPal, Google Pay and even Apple Pay: the list of providers of digital wallets is getting ever longer.
Although mobile payment in everyday life is still rather on the fringes here – a survey conducted by the Zurich University of Applied Sciences (ZHAW) and the University of St. Gallen (HSG) revealed that mobile payment by app accounts for less than two per cent of payments in Switzerland – globally the digital trend is increasing exponentially. This is particularly true for China. According to the government-run China Internet Network Information Centre (CNNIC), 72 per cent of the some 800 million internet users there are already using smartphones for payments in the retail sector – more than in any other country. In terms of transaction volume per user, though, the Middle Kingdom is still left standing at the equivalent of 514 euros a year on average. The undisputed trailblazer for spending is the USA. Estimates indicate that users abroad accounted for annual turnover of 1,838 euros each in 2018. In Europe, Britons lead the way with 1,638 euros. View more information on investment solutions on the topic “Digital payment: the breakthrough is close”.
According to a study by Allied Market Research, the mobile payment market can look forward to high rates of increase. Led by the Asia Pacific region, experts are predicting a growth rate for transaction volumes of 33.9 per cent p.a. on average from 2017 to 2023. The number of users is also set to rise sharply: figures from the data portal Statista suggest that the billion mark will be passed this year. In 2022 there are expected to be more than 1.5 billion mobile payment users across the world, corresponding to a growth rate of 120 per cent compared with 2016. Over this period the penetration rate will rise from 13.2 to 28.5 per cent.
The growth figures indicate that electronic payment has long since become unstoppable. The reasons for the rapid penetration are many and varied: it is convenient, secure and, thanks to NFC wireless technology, also extremely fast. According to calculations by market research company GfK, the contactless payment process takes only eleven seconds, a card with PIN 23 seconds and cash up to 83 seconds. Security, too, has high priority. With Google Pay, for instance, in every purchase the number of the stored card is replaced by an individually generated code that is valid only once. This means that the card data cannot be intercepted and misused. In addition, multiple cards with a contactless function can be stored in a virtual exchange on the smartphone, significantly enhancing the flexibility of payment.
GET MORE information on investment solutions on the topic “Digital payment: the breakthrough is close”.