Ongoing Cash-to-Noncash Conversion Will Spur Growth Despite Macroeconomic Headwinds; Industry Players Must Take Action on Numerous Fronts to Stay Resilient and Competitive, Says New Report from BCG
BOSTON, Oct. 3, 2022 /PRNewswire/ — Despite the combined effects of expansionary monetary policy, geopolitical instability, pandemic-driven supply chain shocks, and a macroeconomic environment characterized by high inflation and rising energy costs, global revenues are likely to rise year-on-year by payments nearly 9.5% in 2022 and ride a positive trajectory for the next decade, according to a new report by Boston Consulting Group (BCG). The report, titled Global Payments 2022: The New Growth Game, is being released today.
BCG’s 20th annual analysis of the payments industry forecasts annual revenue growth of 8.3% from 2021 to 2026, and of 7.6% from 2026 to 2031 (see the exhibit). Among the areas of particular strength will be revenues from revolving credit-card balances, deposit interest, and account fees. The report estimates that total global payments revenues will reach $3.3 trillion by 2031.
“The global payments industry has displayed remarkable resilience throughout the pandemic and current macroeconomic challenges,” said Markus Ampenberger, a BCG partner and coauthor of the report. “Moving forward, winners and lose adaptrs in this space will be determined by players’ ability to adapt to the new normal, diversify, create new business models around data, establish partnerships, and unlock new sources of revenue.”
Four Trends Driving the Global Payments Industry
The report outlines four trends that will shape the outlook for the global payments industry over the next five years:
- The era of outsize market outperformance has ended. Acquirers, networks, and other industry participants have seen their total shareholder returns contract since the second half of 2021. Instead of focusing on pure revenue growth, payments players will have to demonstrate solid profitability to attract both customers and investors.
- Demand for electronic payments is getting stronger. The sustained cash-to-noncash…