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Cash was responsible for less than one in every seven pounds spent in Britain last year, according to a new report from trade body UK Finance, which noted a drop on that measure by 1.7 percent over the year before. The study forecasts that, nine years from now, cash will support a mere six percent of UK payments. Debit cards are now used for just under half of all payments in the country, with contactless functionality now ubiquitous.
The report also projects continued growth in the uptake of payments by account via the Faster Payments infrastructure. The United Kingdom has long been a world leader in the Open Banking made possible by such technical innovations, with NatWest revealing this week that it recently processed its billionth pound on the bank's Payit app, launched in June 2020. That total was reached through five million transactions, suggesting an average transfer amount of £200 ($241). Early next year, the bank will be focusing on the potential of Payit's Variable Recurring Payments (VRP) feature to supplant direct-debit and card-on-file functionality through its superior security offering.
An interview with Stripe's co-founder John Collison in Nikkei Asia notes that e-commerce spend in Southeast Asia is expected to multiply by 2.6 times by the middle of this decade. The digital payments opportunity is not lost on Chinese tech leader Jack Ma, whose Ant Group is backing among others Indonesian startup Dana, which has just raised a further $250 million for its e-wallet and financing ambitions.
In neighbouring Malaysia meanwhile, Apple Pay has entered the market, its second in the region. Apple cannot be accused of being over-hasty, as it is now six years since it launched in the wallet's maiden market of Singapore: characteristically, the high-profile app is being launched on the back of partnerships with leading issuers AmBank, Maybank and StanChart; Visa and Mastercard cards are currently supported, with Amex to come. Many popular retailers and e-commerce platforms in Malaysia will be highlighting the method at their checkouts or points-of-sale.
"I find that the culture in America, for whatever reason, in the technology industry often underestimates the size of some of these global regions and global markets," Mr Collison says. It seems more likely that the runaway popularity of the QR Code in the region blindsided the West's assumptions about the digital value chain. However, there remains much room for savvy players armed with the best market intelligence.
Other stories of interest this week...
India: Signs of central bank pondering interchange/MDR caps
UK: Klarna adds purchase history feature via permissioned email
US: Amex to offer fintechs credit cards via WebBank
US: Whole Foods expands use of Amazon One paytech
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