Tap, Click, and Pay: Embracing the Rise of Digital Payments

The world witnessed a significant surge in digital payments in 2022, marking a continuing shift away from cash transactions, as reported by the Bank for International Settlements (BIS), according to Finextra. The data revealed a substantial increase in the average yearly number of cashless payments per capita, with advanced economies seeing a 10% growth from 426 to 468, and emerging markets and developing economies experiencing an 18% surge from 246 to 291.

Despite the rise in digital transactions, the nominal average transaction value of cashless payments either decreased or stabilized in most countries, even amidst a general increase in price levels. The preferred digital payment methods in 2022 were cards, followed by credit transfers, with cheque payments continuing to decline in popularity.

One notable trend highlighted by BIS is the increasing use of «fast payments,» primarily within domestic payment systems. However, there is an emerging opportunity to strengthen interconnections between these systems to facilitate more efficient cross-border transactions, a key focus for the G20.

Conversely, the demand for banknotes and coins witnessed a global decline, particularly in emerging markets and developing economies. BIS noted a decrease in both average transaction values of cashless payments and the frequency of cash withdrawals.

Despite these shifts, BIS acknowledged that there is still a significant demand for cash, especially among older demographics and individuals seeking better budget control. This highlights the need for a balanced approach to payment options, catering to diverse preferences and needs in the evolving digital landscape.

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