Summary of Development
A new report on the recovery of the payments industry suggests the global payments industry demonstrated its resilience again in 2021, more than recouping the revenue erosion experienced in 2020, which was the sector’s first decline since the 2008–09 financial crisis. McKinsey’s Payments Practice now says the five-year revenue outlook exceeds pre-pandemic expectations, topping $3 trillion by 2026. The factors fuelling this expected growth have shifted in unexpected ways.
Payments industry revenues rebounded strongly in 2021, growing at an 11% rate—more robust than we forecast last year and reaching a new high of $2.1 trillion globally. Growth was strong across all regions, with both Asia–Pacific (APAC) and Europe, the Middle East, and Africa (EMEA) registering double-digit gains. Fee-based revenue continues to increase at a faster rate than net interest income and comprises more than half of the total (although this trend may soon reverse, as we will discuss).
Looking forward, a confluence of events is reshaping the payments landscape.
After more than a decade of low inflation and interest rates, many central banks—particularly in Europe and North America—have shifted their policies, leading to rapidly rising interest rates. Geopolitical factors, capital market resets, commerce expectations, technology advancements, and societal responsibilities are creating more pronounced sector and regional dynamics as well. This rapidly evolving landscape will create new opportunities for incumbents and disruptors alike to win customers, develop new solutions, and claim market share, reshaping the competitive chessboard.
Payments revenues recovered rapidly from 2020’s nominal contraction: Global revenue growth exceeded expectations by not only recouping 2020’s pandemic-driven 5% decline but also registering a new high of $2.1 trillion. Including 2021’s 11% increase, revenue growth over the past two years has averaged 3% – below the long-term trend but well above the outcome feared by many.
Link: https://www.paymentscardsandmobile.com/payments-industry-continues-strong-post-pandemic-recovery-statistics/
https://www.mckinsey.com/industries/financial-services/our-insights/the-chessboard-rearranged-rethinking-the-next-moves-in-global-payments