Needham, MA, August 22, 2000 — As part of its launch of a new service focused on Global Payments, TowerGroup–the Needham, MA-based research and advisory firm specializing on information technology and financial services–has released highlights from new research on trends in the global payments industry:

• Global non-cash payment volumes in developed countries now exceed 170 billion payments annually, reflecting a CAGR (compound annual growth rate) of 5.4% over the past 6 years. TowerGroup expects this growth trend to continue, with 200 billion non-cash payments expected in 2003.
• TowerGroup global payment volume projections for developed countries call for electronic payments to finally surpass paper-based transactions in 2000. Further, TowerGroup projections reflect a CAGR in excess of 11% for electronic payments, and the beginning of a slow decline in US check volume.
• The displacement of paper-based transactions by payments initiated, cleared, and settled electronically is due largely to the development of electronic commerce in both retail and wholesale sectors of the global economy, which is driving increased demand for payment capabilities that are more automated and integrated with purchasing processes.
• Over the last five years, the banking industry worldwide has spent over US$50 billion on information technology for basic processing of payments made via multiple mechanisms: paper, electronic, and cards. The industry currently spends approximately US$10.8 billion worldwide annually on information technology for payments processing, which represents approximately 12 percent of the industry’s total current annual IT spending.
• New technology based payment products have been introduced that will continue the transition to electronic payments. These new technologies include web-enabled mobile devices and "e-checks" that will spur the growth of "electronic money" type transactions over the next several years. TowerGroup projects that nearly 1 billion electronic money transactions will occur by 2003.