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Predictions for the year ahead

February 14, 2011 by Dominic Hirsch — manager, Retail Banking Research

Hot topic of the year:

Cash cycle management The number of cash payments may not be growing as quickly as other forms of payment, but this arguably makes it all the more important that banks and retailers get their cash cycle management under control. Suppliers of equipment and services are keen to facilitate this process, so we can expect plenty of discussion of cash cycle management at conferences, in newsletters and on websites during 2011.

Statistic of the year:

150 billion card payments worldwide There will be whopping 150 billion card payments made using 8.5 billion payment cards in 2011. This landmark will soon seem like a distant memory, however, when card usage grows in less developed markets – Asia-Pacific, for example, represents more than half of cards but less than 20% of transactions.

Comeback of the year:

ATM deposit in mature markets Automated deposit and recycling terminals continue to be installed in China and other less developed markets, but with a few exceptions, such as the large US banks, deployment of automated deposit in North America and western Europe has been held back during and following the financial crisis. This cannot go on forever, and competitive pressures combined with a desire to reduce costs will reinvigorate the sector.

Breakthrough of the year:

Contactless/NFC in Europe This is the riskiest of the predictions here. There has been plenty of talk, but relatively little action, when it comes to contactless cards and NFC in Europe. Contactless payments will come – it is just a question of when – and with increasing numbers of issuers and retailers coming on board, and perhaps even more significantly, a number of new public and private transport pilots and rollouts, 2011 could be the tipping point.

Disappointment of the year:

Prepaid will still struggle in Europe Despite all the hype, and with occasional notable exceptions such as Italy, prepaid cards have struggled to make inroads in most countries in Europe. Will this change in 2011? Probably not. For most consumers, debit cards attached to basic bank accounts offer the same functionality at lower cost. Other than specific niche segments such as travel, prepaid cards in Europe will continue to struggle.

Reprinted from Banking Automation Bulletin (see www.rbrlondon.com/bulletin for more information)

About Dominic Hirsch

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