Business-Initiated Payments on Rise, says Aite Group

An on-going compound annual growth rate (CAGR) of 7% for global non-cash business-initiated payments is being predicted by Aite Group after it analysed global payment volumes from 2006 through to 2018 estimates in its report entitled ‘Global Business-Initiated Payments: Volume and Trends’.

The Aite Group report, written by senior analyst Nancy Atkinson, assesses actual global payments volume by region from 2006 to 2010 and then estimates volume for 2012, 2014, 2016, and 2018. The key finding is that business-initiated fund transfers, cheques and other non-cash types of payments will continue to grow as they have been over the last decade, mirroring the consumer growth of card, mobile and direct debit payments.

The analysis is based upon data from 20 leading global payments technology providers, Aite group subscribers and interviews with ten senior corporate treasurers, says Atkinson, which discussed corporates likely transaction requirements in the future including electronic e-invoicing, mobile and other such solutions.

A clear majority of business-initiated payments are domestic payments, according to the report, meaning the recipient is located in the same country as the business that originated the payment. Domestic business-initiated transactions are growing at an overall 6.9% CAGR. Emerging economies are leapfrogging developed countries in creating payments infrastructure for the first time, with legacy concerns not inhibiting the growth of mobile money or other such new structures. New payments technology solutions will tend to use cards or cell phone numbers to direct and transport payments, predicts Atkinson.

In Canada and the US, credit transfers respectively covering electronic funds transfers (EFT) and Automated Clearing House (ACH) transactions, are at last replacing outdated paper cheques, although the countries still lag behind Europe and some other regions in this regard. Commercial card payments are also growing in North America, but not as quickly as banks and card networks would like.

European countries vary greatly in their use of payments instruments, says the Aite Group report, with some countries having eliminated paper cheques but others, such as France, still holding on to them. The implementation of the single euro payments area (SEPA) harmonisation project is expected to speed their demise as it means lower-cost credit transfers (SCTs) and direct debits (SDDs), provided there are no further delays.

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