The U.S. is set to lose its top rank as the world’s largest cashless society to emerging Asian markets by 2020.
Cashless payments are estimated to grow 4.7 percent to reach a total of $184 billion in transactions next year, according to a recent study by Capgemini. This compares to emerging Asian markets which are projected to surge 30 percent in 2020 to reach $208.7 billion.
China is undoubtedly a dominant contributor to the trend due to the popularity and still increasing market penetration of payment systems like Alibaba’s Alipay and Tencent’s WeChat Pay. India is also a key contributor with large credit transform volumes alongside government promotion of open banking systems.
The study attributes the lag and dethroning of the U.S. to «reluctance» by retailers to invest in new technology and «inertia» from regulators to promote cashless payments.
Cash Not Dead
Elsewhere, «widespread adoption» of digital wallets, mobile payments, open banking and retail platform continues to grow with systems ranging from America’s Amazon, Sweden’s Klarna to South Korea’s Samsung Pay. The cashless payment market has grown significantly since 2017 when the U.S. and China totaled $147.3 billion and $64.9 billion, respectively.
Still, the extinction of cash is far from reach, especially in the most mature societies. According to the Capgemini study, cash in circulation outpaced economic growth in 40 out of the 42 most developed nations in the last decade. The trend became especially noticeable in mature economies at the start of the 2008 global financial crisis, the study added, «likely driven by store-of-value motives rather than payment needs».
In Europe, for example, cash payments account for 79 percent of all point of sale transactions and 54 percent by value.
