The pandemic prompted the first decline in global payments revenues in 11 years, though less than expected, and a quick rebound is on the cards.
The payments industry showed its resilience to drastic economic changes as payments revenue in 2020 only suffered a 5 percent dip year-on-year to $1.9 trillion, revealed a new report by management consulting firm McKinsey.
APAC dominated the global payments landscape, with approximately $900 billion in revenue, and the region’s revenue is expected to grow in the 9-11 percent range in 2021. McKinsey expects global payments revenues to quickly return to its long-term 6 to 7 percent growth trajectory, recouping 2020’s declines in 2021 and reaching roughly $2.5 trillion by 2025.
APAC countries led the way in real-time payments; India registered 25.6 billion transactions in 2020 (over 70 percent growth from 2019), followed by China and South Korea, the «Global Payments Report» 2021 said.
CBDC Potential
The report also looked at the potential challenges and opportunities Central Bank Digital Currencies (CBDCs), bring for various financial players, as well as the steps each can take to both prepare for and influence the ongoing conversation.
McKinsey said about 80 percent of central banks globally are conducting research on CBDCs, and about 10 percent are in a pilot phase.
It also noted the potential benefits of mitigated KYC risk and reduced compliance cost related to transaction monitoring and reporting, enhanced technical underwriting capabilities, and streamlined distribution of targeted subsidies, as seen from China's CBDC pilot.
