Global Payments Revenues Are Predicted to Reach $3.3 Trillion By 2031

According to the latest report by BCG, global payments revenue is likely to rise year-on-year by nearly 9.5% in 2022. The detailed analysis of the payments industry predicts annual revenue growth of 8.3% from 2021 to 2026 and development of 7.6% from 2026 to 2031. The report also predicts the total global payments revenues will reach around $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 losers 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.

The report also elaborates on the four trends that will impact 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 pure revenue growth, payment players must demonstrate solid profitability to attract customers and investors.
• Demand for electronic payments is getting stronger. The sustained cash-to-noncash conversion, the continuous growth of e-commerce, and the increasing integration of payments into retail and corporate customer journeys are predicted to drive payments revenues globally. For example, in card payments, card-not-present spending online is poised to climb by a Compound Annual Growth Rate (CAGR) of 11.0% from 2021 to 2026.
• Central bank digital currencies (CBDCs) will gain momentum.?Central banks are looking into developing and piloting viable CBDCs to complement cash with digital central bank money. Moreover, central banks can use CBDCs to implement monetary policy faster and more granularly by modulating monetary supply in near real-time.
• Payment's businesses face significant financial and nonfinancial risk and increasing scrutiny from authorities.??Payments players should aim to strengthen their risk and compliance activities to continue on their growth paths and install the required safeguards for their businesses. Market participants must address multiple risk dimensions: financial, compliance, cyber, and crypto.

After a solid post-pandemic rebound in 2021 and 2022, all regions are projected to show steady revenue CAGRs over the next five years. Latin America (10.8%) and Europe (10.6%) should lead the way, followed by the Middle East and Africa (9.8%), Asia-Pacific (7.6%), and North America (7.3%).

According to the report, issuer revenues will keep rising at a 6.2% rate annually over the next five years and exceed $1 trillion globally by 2031.?

Through 2026, transaction-related (primary) revenues, mainly from interchange fees, will drive much of this growth (CAGR of 8.4%), followed by non-transaction-related (secondary) revenues (CAGR of 3.9%), including foreign-exchange and annual card fees.?

Two significant shifts may reshape the issuing space. First, new payment methods such as "buy now, pay later" have opened the door for payment players to move beyond a transactional role.?Second, customers increasingly expect richer rewards and a more personalized loyalty experience.

The report also suggests that networks' combined revenues—from both international and domestic schemes—will rise at a CAGR of 8.9%, from $63.8 billion in 2021 to $97.9 billion in 2026.?

While it's a healthy growth rate, lower than the prior five-year CAGR of 10.2%.?

To rejuvenate their slow growth, networks must diversify by developing untapped vertical-specific product propositions, revving the adoption of open banking and A2A payment flows, gaining a first-mover advantage in recent growth frontiers such as digital currencies, and leading the sustainability agenda in payments.

Source: BCG, and Cision