Payments: A tumultuous landscape brings new challenges
7. October 2019 | News, Retail Technology, What´s new in Retail

As attackers continue to erode the edges of incumbent profit strongholds, established payments players must become ultra-focused to expand their businesses, concentrating on areas that are likely to be critical in the future and selecting those where they have natural advantages, according to a new report by Boston Consulting Group (BCG).

This 17th annual study by BCG outlines recent developments in the payments market globally and regionally, explores how retail providers can find the green shoots that will have the greatest impact in the 2020s and beyond, and explains why wholesale banks must reckon with digital disruption and find the most impactful areas for investment.

Market outlook

According to analysis in the report, payments revenues globally should rise by a compound annual growth rate (CAGR) of 5.9% from 2019 to 2028. This expansion, fueled partly by a steady rise in cashless transactions, will add $1.0 trillion to the payments revenue pool, raising the total to $2.5 trillion by 2028.
Retail payments revenues will increase by an estimated 6.0% CAGR from 2019 to 2028, modestly outpacing wholesale payments growth (5.6%). E-commerce and other remote transactions, which BCG expects will grow by 11% annually over the next five years, should be a key driver of retail payments growth.

Retail payments: finding the green shoots

The report says that established retail payments players will have to work hard to capture their share of growth amid significant disruption in the payments landscape globally. Some of that disruption comes as regulatory bodies press for reductions in interchange rates. But perhaps the most significant shift reflects the impact of a rapidly expanding fintech presence that is accelerating technological innovation and increasing merchant power.

Source: Boston Consulting Group (BCG)

Tags: contactless payment, mobile payment, payment methods

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