| WORLD PAYMENTS MARKET
A Snapshot
The economic crisis did not start to take its toll fully until the latter half of 2008 and it is already clear that world exports declined initially, probably undermining the demand for trade finance. In fact, the payments business has proved resilient, further cementing its position as a mainstay of revenue for many banks. However, the economic crisis and the regulatory responses have further accelerated change in the payments market at a time when non-bank competitors and technological advances are already impacting the landscape. Regulation, competition, industrialisation and technology have acted together as catalysts to transform the ‘what’, ‘who’ and ‘where’ of the global payments business. Regulatory initiatives including those under Single Euro Payments Area (SEPA), Payment Services Directive (PSD), Basel III, Anti-Money Laundering (AML), and Anti-Terrorist Financing (ATF) are prompting banks to look for more cost-effective solutions. Competition and innovation are already transforming the payments landscape into a more complex, expansive and interconnected world. The payments space is also becoming a more volatile and information-driven dimension. Banks need to consider how to capture the value embedded in that dimension, and they will need to consider the gamut of sourcing, partnership and collaborative models to succeed. Growth of non-cash payments The report reflects that payments flows remained strong in emerging markets in 2009. The volume of non-cash payments remained concentrated in developed markets even though the increase in volume was modest. Still, the rate of growth in non-cash payments volumes was faster in developing economies, especially the BRIC (Brazil, Russia, India, China) nations, in which economic activity remained robust relative to more developed nations. Against the backdrop of the aggregate increase in 2008 non-cash payments volumes, there were notable trends in the mix and use of individual instruments. The trends included the following :
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