Your Friday fix for global fintech and payments news
This week we are looking at the level of contactless transaction volumes and the dramatic upward curve in different parts of Europe. Contactless transaction volumes have reached a new high in the UK, and there has also been an escalation in volume in the Nordics. On the opposite end of the payments spectrum, South Africa has decided to officially phase out the acceptance of paper cheques from the end of 2020. And lastly, Compass Plus and Consult Hyperion joined forces to bring you a discussion on 90’s technology versus tech developed and launched in the 2010’s and how the latter can help transform a business.
Our weekly round-up brings you a dose of some of the biggest news announcements from the past seven days so you can keep an eye on all that’s shaping our world this week.
- Contactless reaches record level amid lower card spending
- South Africa to stop issuing and accepting cheques from 2021
- Can a payments platform born in the 1990s truly meet your business needs? And, more importantly, for how long?
According to UK Finance, 62% of all debit card transactions were made using contactless technology during August 2020. This represents a 19.3% increase from the same month in 2019 and totalled a spend of £8.2 billion. 45% of all credit card transactions were contactless during the same time.
When compared with July, August’s contactless transactions showed an increase of 7%, which may be due to the easing of the UK lockdown restrictions.
Contactless transaction volume growth has seen an impressive boost in another part of Europe during 2020. According to data from Nets, as reported by Payments, Cards & Mobile, the Nordics contactless payment ratio has grown almost 20%, from 57% in January this year to 75% in October. In both the Nordics and the UK, the contactless limit was raised during the pandemic which will have helped to facilitate the acceleration of the increase of its use.
Security concerns has been noted as one reason that the South African Reserve Bank (SARB), Financial Sector Conduct Authority (FSCA), Payments Association of South Africa (PASA) and the Banking Association South Africa (BASA) have taken the decision to phase out both the issuance and acceptance of paper cheques from the beginning of 2021.
When speaking of informing banking customers of the change, the SARB said: “Banks are expected to extensively communicate with their clients leading up to and beyond the discontinuation of cheques. Furthermore, to educate their clients on alternative electronic payment methods that may be used.”
The COVID-19 pandemic was also noted as a reason for the phasing-out of the paper cheque, with the usage and acceptance noticeably declining throughout.
Over the last decade, the payments industry has changed significantly. Today, financial institutions require their system to be flexible and offer them the ability to bring products and services to the market quickly to be able to effectively compete. However, many continue to operate on card-based platforms that are entering their fourth decade, instead of moving to modern, third generation payments platforms which were built to provide FIs with the means to launch ground-breaking products and solutions suitable for the market today, and in the years to come.
Compass Plus joined forces with Consult Hyperion in an insightful webinar, which brings together experts from each company to explore the differences between payment platforms born in the 1990s and those developed and launched in the 2010s, and how the latter can transform your business, providing a platform that will meet the needs of today's market and tomorrow's unknown.