Summary

As the world continues its uneven recovery from the global pandemic, the changes to countries, economies, businesses, and individuals that arose from the first lockdowns in 2020 continue to reveal themselves today. The way people pay has seen major, if not unforeseen, transformation. The pandemic has accelerated the move away from cash towards digital payment solutions. This shift challenges traditional payment revenue models in a number of ways, including through convenient alternatives to card payments via digital wallets, payment network innovations, and simple, transparent substitutes for credit cards via buy now pay later apps.

This report discusses the existing revenue models in the payments market and evaluates the challenges they face from emerging technologies and business models. New solutions have the potential to allow merchants and customers to cut out a key part of the traditional payment loop, bypassing interchange fees, system fees, and service charges - with major consequences for revenues.


Scope

  • Following a decade of strong growth, estimates place current global payment revenues at around $2tn.
  • Two key revenue streams - interchange fees and merchant service charges (MSCs), both specific to card-based transactions - account for around half of payment revenue. Together they will see growth of 25% between 2020 and 2023, when their value will reach $1.2tn.
  • The pandemic has slashed the use of cash across many regions, although in traditionally cash-dependent areas it will continue to dominate over the short term.
  • While payment cards remain the dominant payment mechanism in Europe and North America, the proportion of global transactions accounted for by mobile wallets has increased rapidly. This trend will continue out to 2023, driven by especially strong usage in Asia Pacific and growing adoption in the developed world.




Reasons To Buy

  • Understand the payments value chain in full.
  • Find out where the growth opportunities are in the medium and long term.
  • Gain insight into coming regulatory changes that will affect payments revenues.
  • Find out how mobile payments affect the established elements of the value chain.
  • Learn where emerging technologies such as real-time payments and central bank digital currencies will impact the payments value chain.
  • Understand how buy now pay later services threaten revenue streams in the credit card market.