Recently NACHA - The Electronic Payments Association in the USA - were delighted to announce the results of a survey with Credit Research Foundation, credit and account receivables professionals, that predicts that in the USA ACH transactions will surpass checks as the leading form of payment received from business customers by 2020. Cheques have been in long term decline around the word, e.g. In USA down to 50% from 63% in 2014, in UK they are declining at 15%/year. Cash is declining in the developed countries too, but what will be the end state?
UK shows the future
The UK Clearings payment statistics report for May 2017 reported that:
- Direct credits fell by 1% at 2.1bn
- direct debits +4% at 4.2bn
- Faster Payments Service: Single immediate payments +20% at 0.96bn
- cheques: fell by 15% at 0.32 bn
- debit cards are growing at 14% (predicted to pass cash next year, see)
- cash: 47% of all transactions at Point of Sale.
For corporate treasurers this raises key questions can they stop accepting:
It is clear that the answers will vary depending on the dynamics of each industry and market segment, e.g. airlines had no problem in stopping accepting cash for in-flight payments, but UK Payments could not get rid of cheques because there were too many market segments that still used them.
Payment systems future
The NACHA / CRF survey found that most credit professional believed that checks were still essential for some segments. It is this combination of the old and the new that is going to dominate.
The massive growth in Real-time Payment Systems, sometimes called Instant Payments or Faster Payments, is set to continue as RTPs bring many new dimensions to payments as Edgar, Dunn & Co. showed in their thought provoking report:
Source & Copyright©2017 - Edgar, Dunn & Co.
But it will be combined, as the UK is showing, with the old systems. Cash and cheques will never die completely.
CTMfile take: The API driven future of payment systems will still need to include cash and cheques. ACHs bulk payment services will still grow in their niche, Real-Time Payments systems will not take over completely.
Real-time revolution: not just payments, also about data services
A webinar on the SEPA Instant Payments initiative hosted by D+H and Finextra discussed the revolution currently transforming the payments industry, in particular through real-time payments
NACHA reveals same-day ACH payments will be available in USA by Sept 2016
Survey shows that payroll and B2B services will be the top offerings initially and also that most banks will offer the same-day services to all clients
UK payment systems pave way for competition
The Payment Systems Regulator has confirmed its decision to go ahead with reforms to the UK payment systems to promote competition
UK Immediate Payments still growing at 20%/year even after 8 years
Fundamental changes in payment behaviour occurring in the UK