The rise (and rise) of digital payments

The modern global payments story is one of volume.

In 2023, the number of non-cash transactions reached 1.3 trillion globally, according to Capgemini. By 2027, it’s forecast to reach 2.3 trillion. That same year, modern payment methods such as account-to-account, digital wallets, QR-code payments and more are predicted to make up 30 per cent of all transactions. That’s a transformational shift.

Consumers have led the way on the adoption of modern payment methods, and businesses are exploring new and innovative ways to receive and make payments, seeing it as a potential differentiator and opportunity. Organisations that act now to modernise their systems and make the most of these trends will find themselves well ahead of the pack.

At ANZ, we expect growth in payment volumes to continue, and we’re well placed to help our customers take advantage of this trend, wherever they operate globally In fact, we’ve just been named the best bank for payments in the  world, as part of Global Finance Magazine’s 24th annual Best Treasury & Cash Management Banks awards.

We’re grateful for the support that secured us this recognition, and we’re inspired to continue operating at an award-winning level. Payments and cash management is something the bank has been proudly investing in for some time. In the year to October, ANZ facilitated the movement of $A164 trillion in payments and capital flows, and cleared or provided payment services to more than 90 per cent of the world’s global systemically important banks, or G-SIBs. This places ANZ at a critical and valuable point in the payments ecosystem.

When we speak to our customers, it’s clear the payments space is changing rapidly, and right across different geographies; bringing down old barriers and opening up new, ground-breaking paths for the exchange of funds. While there’s still a long way to go, it’s clear the revolution is happening now.

Efficiency

The evolving world of payments allows businesses to not only create efficiencies in their organisations, but also design completely new customer propositions and experiences.

For treasurers, the potential for near-real-time digital payments provides additional effective and safe ways to manage working capital, as well as changing the way their businesses work over the medium term - for their staff, their customers, and their customers.

With these modern payment methods comes an extremely valuable modern commodity: data. The rich data that come with modern payment streams can help businesses move toward zero-reconciliation solutions, which help to create further efficiencies.

Data will continue to multiply as payments become cheaper and more accessible globally. Growing mobile payments options are a key driver, particularly in the Asia Pacific region. According to Euromonitor, the highest percentage of paperless transactions in 2023 came from the Asia Pacific, accounting for more than half of the global total.

Digital payments in south-east Asia alone are expected total around $US1.5 trillion by 2030. Another report suggests by 2025, payments revenue in the Asia Pacific business-to-business market could reach $US1.4 trillion.

In many markets in Asia, it’s not uncommon for payments to be made using QR code; in others, account-to-account payments are commonplace. At ANZ, we expect to see usage of different variations of real-time and account payments grow, especially as we see examples like PayTo in Australia really take off.

Nuanced

Whichever methods used, it is clear payments are moving toward a fast, near-real-time future around the world, even if nuanced differences remain between geographies.

What’s also clear is businesses will need to evolve with this change. And the reality is many large companies are already building this into their payment processes, or at the least planning for it in their payments architecture, to ensure they don't find themselves late to the party.

ANZ is proud of its role as a leader in payments globally and its position as a leading technology bank. Our network makes uniquely positions us to provide access to our specialist clearing services, and relationship networks, in many markets all around the world.

When we work with payment technology, we do so with institutional customers in mind. A big part of ANZ’s role as an institutional bank is helping our customers prepare for the digital-payment future – through investing in their systems, updating their processes and security, and adapting to a 24/7, always-on environment.

Our Global Finance Magazine award showcases our strength with processing payments. It takes scale to bring innovative solutions to customers, and to process high volumes of payments safely, securely, and quickly. At ANZ, we have that scope, and that is an important differentiator for us around the world.

Lisa Vasic is Managing Director, Transaction Banking & Nigel Dobson is Banking Services Portfolio Lead at ANZ