Digital payments adoption accelerates across emerging markets

Cashless payments are expanding rapidly across emerging market and developing economies (EMDEs), highlighting a structural shift in how individuals and businesses conduct financial transactions. According to the latest retail payments analysis by the Bank for International Settlements (BIS), EMDEs are now outpacing advanced economies in the adoption of digital payment methods, driven by strong growth in real-time and mobile-based systems.

The findings, based on the BIS “Red Book” statistics compiled by the Committee on Payments and Market Infrastructures, show that the average number of cashless transactions per person in EMDEs rose 21% over the past year to 242. In contrast, advanced economies recorded a more modest 6% increase, reaching 579 transactions per capita.

This divergence reflects how emerging markets are leveraging digital infrastructure to overcome traditional barriers such as limited banking access and reliance on physical cash. “Fast payment systems have become a central driver of transaction growth in EMDEs,” the BIS noted, adding that these systems now account for nearly half of all cashless transactions in these regions.

Credit transfers, particularly instant payments, have played a leading role in this transformation. These systems enable near-instant fund transfers, often at low cost, making them suitable for everyday use cases such as peer-to-peer payments, bill settlements, and small business transactions. The increasing accessibility of mobile-based payment solutions, including those designed for basic phones, has further accelerated adoption.

In advanced economies, however, growth continues to be driven primarily by card payments. Individuals in these markets average 361 card transactions annually, compared with just 95 in EMDEs. Other instruments such as direct debits, cheques, and e-money showed limited growth across both groups.

From a value perspective, cashless payments as a share of GDP increased by 3% in EMDEs, while remaining broadly stable in advanced economies. Credit transfers dominate transaction value, accounting for 94% in EMDEs and 86% in advanced markets. Meanwhile, average transaction sizes in EMDEs held steady at approximately $529, whereas they declined in advanced economies, indicating a shift toward smaller, more frequent transactions.

Despite the strong momentum in digital payments, cash continues to play a role. The BIS observed that while the frequency of cash withdrawals has declined globally, the average withdrawal size has increased. Currency in circulation remains stable at around 9% of GDP, suggesting that cash continues to serve as a store of value and fallback option.

The report, which covers jurisdictions representing roughly 59% of the global population and 85% of global GDP, underscores the importance of continued investment in digital payment infrastructure. “Policymakers and market participants should focus on building resilient, inclusive, and efficient payment systems,” the BIS stated.

Overall, the findings point to a growing role for FinTech innovation in driving financial inclusion and economic efficiency. As EMDEs continue to adopt digital payment technologies at scale, they are not only narrowing the financial access gap but also reshaping the global payments landscape.