Payment systems are at the core of a country’s economic activity and its financial sector. Improvements in national payments systems (NPSs) lead to overall savings for the economy and strengthen securities management and transaction processing. These systems underpin financial stability by mitigating risks and supporting liquidity management. Payment services are also a critical enabler of financial inclusion through transaction accounts that allow people to make and receive payments in a secure and cost-efficient way, to safely store value, and to enable access to and usage of broader financial services.
The World Bank has supported national authorities in improving national payments systems, in cooperation with private sector stakeholders, through a broad range of financing, technical assistance, and knowledge instruments, including benchmarking and monitoring through the Global Payment Systems Survey (GPSS). The sixth iteration of the GPSS provides comparative information on cashless transactions; legal, regulatory, and oversight frameworks on payment systems and services; and various characteristics of payment and settlement systems worldwide. Given below are its main findings in six charts:
Cashless transactions are on the rise, reinforced by the COVID-19 pandemic, but gaps persist.
The use of non-cash payment methods is increasing globally, which are seen as safer, more efficient, and more inclusive. From 2017 to 2020, the annual number of cashless transactions per person globally rose from 91 to 135. Overall, this figure doubled in low and middle- income economies (LMICs), while the growth in high-income economies is estimated at 17 percent through the same period. Despite this progress, disparities in access to, and the use of, digital payments remain significant in LMICs.
Chart 1: Cashless transactions per capita by income group
Source: World Bank, Global Payment Systems Survey, 6th Iteration, October 2023
Legal and regulatory frameworks for payments have been strengthened.
A significant element underpinning progress in the development of payment and settlement systems has been the enactment of payment system laws, now found in 81 percent of countries that participated in the survey. This is a significant increase compared to the first GPSS survey in 2007, where this type of law was found in only 46 percent of the responding countries.
Chart 2: Legislation regulating payment systems and related aspects
Source: World Bank, Global Payment Systems Survey, 6th Iteration, October 2023
Transparency and disclosure requirements for remittance service providers have seen significant improvements.
Transparency of remittance transactions is quite important, given their complexity—they usually occur across two countries and almost always involve a currency conversion. According to the GPSS, most jurisdictions have regulations in place that require certain details to be provided to customers during remittance transactions. These include the issuance of receipts detailing the transaction, disclosure of fees, foreign exchange rates, taxes, and information on available recourse mechanisms.
Chart 3: Transparency requirements in remittance services
Source: World Bank, Global Payment Systems Survey, 6th Iteration, October 2023
The deployment of fast payments is gaining pace and is on a similar trajectory to the rapid adoption of Real Time Gross Settlement systems at the turn of the century.
High-income economies lead the implementation of fast payment systems (FPS). The existing systems support mostly credit transfers and a variety of channels. Fast payment instruments aim to replicate the instant settlement feature of cash, which is particularly relevant for countries where cash is still the preferred payment method. An FPS or equivalent service is already operational in 61 percent of respondent countries (compared to 43 percent in GPSS V), while another 27 countries are planning to implement an FPS within the next three years. The World Bank has, more recently, played a leading role in global research and technical assistance to countries on fast payments through Project FASTT.
Chart 4: FPSs already in place and plans for implementation in the near future
Source: World Bank, Global Payment Systems Survey, 6th Iteration, October 2023
Cybersecurity and cyber-resilience are top priority for regulators.
Regulators around the world are recognizing the increasing significance of cybersecurity in the financial sector and the necessity of taking proactive measures to mitigate cyber risks. As a result, 80 percent of the economies worldwide have implemented a national strategy to address cybersecurity and/or cyber-resiliency; 71 percent have developed such strategies at the financial-sector level; and 85 percent at the central-bank level.
Chart 5: Cybersecurity strategy documents
Source: World Bank, Global Payment Systems Survey, 6th Iteration, October 2023
National payment systems are always evolving to improve efficiency and keep the pace of technological innovation.
Most of the surveyed countries are undertaking reforms for the modernization of their NPS. These reforms are primarily driven by the need to respond to technological innovation and to increase the overall efficiency of the NPS. However, for LMICs another crucial motivation for these reforms is the expansion of financial access and inclusion.
Chart 6: Factors that have triggered payment systems reforms
Source: World Bank, Global Payment Systems Survey, 6th Iteration, October 2023
These findings are just a small set of insights from what is covered in the survey report and its accompanying data tables.
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