Payment Instruments: E-payments

By Denise Bedell

Use of Electronic Payments by Non-Banks (relative importance of payment instruments, in value of transactions

(2009, % of total value of all payment transactions))

Electronic payment can refer just to e-commerce - or payments for buying and selling goods or services offered online - or to any type of electronic funds transfer. It includes such payment channels as direct debit, e-money, card payments, and credit transfers.

Credit transfers account for more than 40% of total non-cash payments by value in all BIS Committee on Payment and Settlement Systems (CPSS) countries, except for Singapore—where they represent just 17.1% of payments and where cheques continue to be the most-used non-cash payment instrument (see Payment Instruments: Cheques).

Direct debits are second in terms of relative importance as an electronic payment channel—accounting for 36.8% of non-cash payments by value in Australia in 2009. In Brazil they account for 19.2% of payments, 17.9% in the US and 17.0% in Germany. Direct debits make up less than 10% of payments in other CPSS countries.

Card payments accounted for 11.6% of payments in Saudi Arabia and 5.7% in Singapore and Sweden in 2009. Otherwise they were used for less than 5% of overall payments by value.

Initiatives in Electronic Payments

A number of government and regulatory initiatives—particularly in Europe—are helping to make it easier and more attractive for individuals and businesses to use electronic payments.

The Faster Payments Service (FPS) is a banking initiative in the UK whose intention is to reduce payment times from the traditional three working days down to near-real-time. FPS is aimed at low-value payments of up to £10 thousand, or £100 thousand for standing orders. Launched in mid-2008, FPS handled 47% of UK standing orders and 73% of all single payments by October 2009, and it is managed by Clearing House Automated Payment System (CHAPS)—the UK’s real-time-gross-settlement system.

The Single Euro Payments Area (SEPA) initiative is also helping to drive adoption of the e-payments channel by instituting a single infrastructure and regulatory framework for domestic and cross-border credit transfers and direct debits in the euro-area. The EC set an end-date of December 2011 for SEPA credit transfer migration and a year later for SEPA direct debit migration.

In addition, the European Commission in December released a report, 'Reaping the benefits of electronic invoicing (e-invoicing) for Europe', in which it called for widespread adoption of electronic invoicing within the EU by 2020. The commission's goal of increasing e-invoicing uptake will further push in the region towards greater use of electronic forms of payment, as e-invoicing solutions often are linked with electronic payment channels.

Data is from the Bank for International Settlements' Committee on Payments and Settlement Systems (CPSS) Annual Payments Statistics, March 2011.

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Use of Electronic Payments by Non-Banks (relative importance of payment instruments, in value of transactions

(2009, % of total value of transactions))

*Sum or average excluding those countries for which data are not available. Since the value of these transactions is relatively large, cross-country comparison should be treated with caution; consequently, CPSS figures for credit transfers have not been calculated. The CPSS figures calculated ignore credit transfer data throughout.