• Reports
• 26.10.2023 02:48 pm

McKinsey’s latest Global Payments Report  shares 2022 data from our proprietary market intelligence, as well as our perspective on the future of the payments industry. Here’s a brief overview of the highlights: 

2022 market intelligence 

·       Global payments revenue grew by 11 percent in 2022, which is the second year in a row of double-digit growth. 

·       For the first time in several years, interest-based revenue contributed nearly half of revenue growth. 

·       Cash usage declined by nearly four percentage points globally in 2022. Over the past five years, the growth rate for electronic transactions has been nearly triple the overall growth in payments revenue. 

The future of the industry  

The payments industry’s 2022 revenue and valuation growth are consistent with optimism about the future. Our analysis indicates: 

·       The five-year outlook is strong, with likely revenue growth of 6 to 8 percent.  

·       Future revenue growth will likely be stimulated by instant-payments innovations and the rise in digital wallets in certain geographies. 

·       The market remains on pace to exceed $3 trillion in payments revenue by 2027. 

A new era on the horizon 

The payments industry has been through three distinct eras, dominated, in turn, by paper, plastic, and account-based transactions. But in the present decade, we see signs of a fourth era starting; we call it the Decoupled Era. 

The Decoupled Era will likely be characterized by payments becoming increasingly disconnected from accounts and other fixed repositories of value. Users will have an even greater voice as they seek convenience, affordability, and security. The Decoupled Era is shaping up to be further reliant on technology—with the winning technologies yet to be determined but contenders include platform as a service (PaaS) models and generative AI. 

Banking has already made great strides with “traditional” AI in marketing and customer operations. McKinsey Global Institute estimates that generative AI could further increase productivity in banking by 2.8 to 4.7 percent, equivalent to $200 billion to $340 billion in annual revenues.