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The 2023 McKinsey Global Payments Report gives information that sheds light on how the global payment industry has developed in recent times. Global payments witnessed a substantial growth in revenue for second time in a row, thanks to the instant payment system, digital wallets and other structural shifts.

According to the lead author Odilon Almeida, “Revenue expansions stretched across geographic regions, with robust performance logged across regions like North America, Latin America, the EMEA economic bloc, and even though the Asia-Pacific territory posted relatively slower however significant growth in comparison to the global averages.”

McKinsey & Company’s Data Analytics wing, a known management consultancy that specializes in consulting and research it has declared that interest rates would be the main driver of worldwide payments revenue maturation by 2022. This is the first time fees are now the main factor driving growth for the sector. Their number crunchers deduced that although in the past fees constituted above 60% of the incomes, in 2017, we saw a moment of reckoning when interest was responsible for more than 55% of income from payments, and is rapidly evolving into the dominant source.

Odilon Almeida (the author of the report, stated that “Much can be attributed for this shift to the continued rise of instant payments and electronic wallets, which are gradually replacing and decreasing cash use in both emerging and developed economies.” These forthcoming modalities enlarging worldwide reach expand the possibilities of making interest revenue from liquid assets that are temporarily stored.”

The report also revealed a booming revenue growth in the payments industry that crosses borders which is primarily driven by the payments segment for customers rather than wholesale transactions. In 2022, consumer cross-border payments grew at a rate nearly threefold of that of the larger payments sector. This was due to booming travel and record wage transfers of diasporas who returned to their home countries.

Odilon almeida wrote, “An element that caught my attention was the clear shift in payments revenue contributions from the wallet of the user into incomes derived from commerce. While the world economy was battling the recession online retail, logistics and healthcare and software services, continued to bring in large volumes of business, which in turn boosted the corporate payment.

McKinsey predicts that the rebalancing of international payments will occur over an estimated five-year period. McKinsey anticipates business streams to contribute 65% or more of total turnover, while users’ payments make up the balance. Odilon Almeida remarked, “The industry is favorably in the near future, as the consultancy’s econometric models forecast an annual increase in revenue of 6% to 8% as they look to 2027. overtaking projected global GDP growth.”

The McKinsey global payments map 2023 conveys an optimistic outlook of the global payments ecosystem, powered by the positive technological advancements that will guide its path over the medium-term. In the words of the master of payments odilon almeida CEO Almeida “Be it the increase in technology absorption and the growth of digital networks, or the rising interest in financial services in emerging regions, each key trend points toward the long-term growth of multi-years for the platforms that facilitate global money movements.”