Off the heels of its 20th annual World Payments Report, Jeroen Hölscher, Global Head of Payments Services at Capgemini, spoke to Payment Expert in the first of a two-parter in greater detail on some of the key findings from the report.
Hölscher revealed how the Asia-Pacific (APAC) region has grown exponentially in regards to its use of digital and mobile payments, and emerging markets in general. He also shared his thoughts on the dangers of Europe potentially being left behind in this wave of payment innovation.
Payment Expert: Firstly Jeroen, what were some of your biggest takeaways from Capgemini’s World Payments Report 2025?
Jeroen Hölscher: In this year’s report we focused on the growth in instant payments and slow decline of cash. Non-cash transactions are surging, forecasted to grow at a CAGR of 15% during 2023-2028.
While the Latin America market will see the fastest growth during this period, APAC will remain the leading region in terms of volume. Concurrently, various regulations and industry initiatives are being introduced to foster innovation, collaboration, and competition.
To succeed, payment firms and banks face three critical imperatives for success:
- Prepare for the payment transition: Open Finance, a key driver of innovation, unlocks a world of possibilities. Instant payments, on the other hand, redefines customer expectations for speed and convenience. Embrace both to build synergies and justify investment into these initiatives.
- Elevate the transformation journey: Change is inevitable, and agility is essential. Cloud-based, composable platforms offer the flexibility and scalability needed to address capability gaps and help institutions adapt to the current environment.
- Unlock new value streams: Fragmentation slows progress. By breaking down silos and combining the power of Open Finance and instant payments, financial institutions and adaptive cross-product, multi-rail value propositions that enhance the customer experience.
This proactive approach will ensure that payment service providers (PSPs) and banks are well-equipped to navigate the changing landscape and deliver a more connected, efficient, and secure payments ecosystem than ever before.
Can you reveal more as to how the Asia-Pacific region is leading the way in non-cash transaction volume? What is the region doing differently to others?
The APAC region is at the forefront of growth in non-cash transactions. By 2028, APAC will comprise 50% of global non-cash transaction volumes, underscoring the region’s continued shift towards digital payments.
As a highly diverse market, while the factors driving this shift are numerous and complex, there are three standout factors fuelling growth in non-cash transactions volume in APAC:
- Strong government backing toward digital payments have played a pivotal role in bringing millions of individuals into the formal financial system, particularly in regions where cash-based transactions were previously prevalent. (Examples include India and Indonesia)
- Strong growth of digital wallets as a payment method across e-commerce and in-store payments. A key driver for this behaviour has been the extensive use of QR-codes across major markets in APAC (India, Indonesia, Vietnam, Singapore, Hong Kong, etc.).
- Several local instant payment schemes now exist in APAC markets, such as Fast Payment System (FPS) in Hong Kong, PayNow in Singapore, DuitNow in Malaysia, PromptPay in Thailand, and Unified Payments Interface (UPI) in India.
APAC also stands at the forefront of instant cross-border QR-code payment linkages. For instance, India’s UPI users can seamlessly make instant cross-border QR-code payments in Malaysia, Indonesia, the UAE, and France. Similarly, Malaysia’s DuitNow users can execute instant payments from Indonesia, Singapore, Thailand, and China.
These capabilities significantly reduce friction for consumers and businesses alike, reinforcing APAC’s pivotal role in accelerating instant payment adoption. As we move forward, the momentum generated by these initiatives will not only enhance financial inclusivity, but also set a global benchmark for payment innovation.
Are emerging markets leading the way when it comes to payment innovation and adoption? What other countries or regions have best exemplified this?
Emerging markets, especially in the APAC region, are leading payment innovation and adoption. With large populations and historically weak domestic digital payment infrastructures, these markets face a diverse array of payment rails, unlike Europe, where the Single Euro Payments Area (SEPA) has standardised processes.
Moreover, low penetration of traditional digital payment instruments, such as credit cards, has heightened the demand for seamless digital payment solutions. This allows these economies to transition away from dependence on cash and embrace the future of finance.
Over the past decade, government-led development of instant and real-time payment infrastructure in key APAC jurisdictions, including India, China, Singapore, Australia, and Thailand, has significantly driven the adoption of digital payments.
Among other emerging countries, look at the LatAm market, where ten countries are pursuing or launching instant payment schemes, led by PIX, created by Banco Central do Brasil (BCB) in 2020. Since its launch, Pix has solidified its position as a preferred Brazilian payment option.
The African continent is catching up as well. Studies say 18 African nations are developing domestic instant payment systems. Moreover, three development projects aim to build regional instant payment platforms. Such initiatives will likely boost non-cash payment capacity in the region.
In the same breath, is Europe in danger of being left behind? What are some of the ongoing challenges for European banks/companies in adopting newer payment innovations and how can they overcome this?
The European payments landscape is heavily regulated. Every year in our World Payments Reports, we track how regulations are evolving, and Europe leads the way. These regulations have helped the region drive competition and transparency, set the foundation for innovation, boosted standardisation, and reduced risks.
However, despite the regulations, the market remains heavily fragmented with multiple domestic payment systems and processes co-existing with the regional payment systems like SEPA.
Each system adopted different designs and implementation approaches that retained local specificity. Banks and corporates must navigate a maze of these complex and fragmented payment systems to achieve finality.
It is important to understand that the circumstances here extend beyond infrastructure: customer preferences vary greatly and dictate the approaches taken.
In Germany and the Netherlands, users tend to favour bank transfers (such as iDeal in the Netherlands), while in France, customers prefer local card schemes. Mobile wallets, such as the unicorn Satispay in Italy or Bizum in Spain, are gaining popularity and adoption.
The recent launch of Wero, a wallet for account-to-account (A2A) payments, reflects the push towards greater digital payment integration. Coupled with SEPA Instant regulations to ensure reach and usage, and the PSD3/FIDA framework aiming to extend insights beyond transaction data, Europe is positioning itself for a more interconnected payment landscape.
Banks are actively exploring several initiatives and adapting to evolving customer behaviour, but their efforts and investments are somewhat divided. This often leads to delays in embracing innovation.
We believe that banks and payment service providers should prioritise migrating to ISO20022 and invest in building a cloud-powered digital foundation. This approach would enhance the scalability and composability of payment capabilities.
Ultimately, business agility will be crucial for embracing these changes.