News

E-payments expected to double by 2010

May 8, 2006

OMAHA, Neb. - A study commissioned by ACI Worldwide found that the annual number of electronic payment transactions, currently about 210 billion worldwide, is expected to double by 2010. The study, conducted by Global Insight Inc. also found that e-payments are growing at an annual rate equal to four times the expected growth in real gross domestic product.

According to a news release, the study is the first econometric approach to forecasting global payments across countries representing 97 percent of the world's GDP. Its findings provide banks, payments processors and retailers with a road map for the next decade.

The study identified several significant findings, confirming the steady move toward the broad use of e-payments.

"Across the world, electronic payments represent a significant growth opportunity for banks, payments processors and retailers," Jeffrey Hale, ACI's chief marketing officer at ACI, said. "In many regions, system capacity will need to double every three to five years or faster to keep pace with the increases in payments volumes. At the same time, payments providers are under pressure to lower their cost of doing business and better manage risk. It's not surprising that many of them are now looking at ways to streamline their payment systems by eliminating redundant capabilities and reusing core functions across multiple payment products and channels."

Findings:

• A compound annual growth rate of 12.9 percent is predicted from 2004 to 2009 for all forms of e-payments globally. GDP during the same period in 79 countries is expected to grow only 3.2 percent.
• Eastern Europe and Asia-Pacific are forecast to lead the world in e-payment transaction growth. Those regions are expected from 2004 to 2009 to respectively increase e-payment transactions 21.6 percent and 19.2 percent. Other regions including the Middle East will increase 15.9 percent, and the North American Free Trade Alliance is expected to grow 12.3 percent. Growth in those regions points to growth within economies that have already established an e-payments infrastructure.
• From 2004 to 2009, forecast volumes for electronic payments are expected to double across the world, with China and India doubling every three and four years, respectively. Conversely, the use of checks as a form of payment is expected to continue its decline. In 2009, only 10 percent of payments are expected to be made by check.

"As companies seek to improve their productivity in addressing electronic payments, we believe they will look for trusted partners who can help them evolve their payment systems to capitalize on the anticipated growth of the next decade," ACI's Hale said.

The study examined e-payment types ranging from ATM transactions to credit and debit card payments, direct debit, bill payments, large-value money transfers and bulk file (ACH) transactions. Multiple sources, including the Bank of International Settlements, industry databases and other published sources, and internal ACI customer and market information, were used for the study. The findings were integrated into a model that related payment transactions to various attributes of economic performance.