The Boston Consulting Group recently released its 2023 Global Payments Report, which shows that the payments industry has come a long way over the past decade, mainly as consumers and companies have shifted from cash payments to a rapidly growing range of electronic payments, with travel in particular expanding from transactions to an integrated array of solutions and value-added services. Payments have become more accessible as innovations such as digital wallets,** and mobile money have accelerated financial inclusion in developing economies.
These developments have driven strong revenue growth and attracted more than 5,000 fintech companies into the payments space. However, valuations have fallen sharply over the past two years, the macro environment has become more volatile, and revenue growth is expected to slow over the next five years. There are different ways in which the payments industry can counter this trend and return to its strong historical growth with more avenues for innovation.
The report looks at the opportunities and challenges facing this diverse industry. It begins with a comprehensive market outlook, followed by an in-depth look at four sub-sectors: acquirers, issuers, wholesale transaction banks, and payment infrastructure providers.
The main finding is that from 2017 to 2022, the total income was paid in the form of 8The rate of growth is 3%, and by the end of 2022, the total revenue reached 16 trillion dollars. Revenue growth is expected to slow down to 6. per year by 20272%, and the total revenue will reach 2$2 trillion. Among them, transaction revenue from bank cards and account-to-account payments is expected to grow by 71%。Non-trading income from interest may only grow by 57%。
Total shareholder return has declined significantly. The TSR of the top 20 payment companies has fallen by an average of 20% over the past two years. Acquiring and payment processing saw the largest decline, with TSR down about 40%. There are currently more than 5,000 payments-focused fintech companies around the world, with total revenues of around $100 billion. By 2030, they could control a $520 billion revenue pool, increasing competitive pressure on incumbents.
Digital currencies are moving from concept to reality, with more than 90% of central banks actively trying to use them as a supplement to cash. Technological modernization is intensifying, and Genai is rapidly entering the payment space. Both can change the payment method. In product development alone, genetic AI-powered software coding can increase productivity by up to 20%.
Regulators are stepping up scrutiny of payments, expanding the ruleset, and stepping up enforcement. This will examine the risk management and compliance practices of existing and non-traditional players. While M&A remains an important lever, it is moving away from mega-deals to capacity-led action, with a particular emphasis on alternative payment methods, integrated software**, value-added services, and loyalty.