What's Happening?
Boston Consulting Group (BCG) has released its 23rd annual Global Payments Report, forecasting that global payments revenue will reach $2.4 trillion by 2029. The report highlights a deceleration in growth rates, with annual growth expected to slow to 4.0% through 2029, compared to the 8.8% compound annual growth rate achieved since 2019. Transaction-related revenues are expected to drive most of the expansion, fueled by increased card usage and instant payment adoption. Latin America is projected to lead with double-digit annual transaction-related revenue growth, followed by the Middle East and Africa at 9%. Eastern Europe is expected to grow by roughly 13%, outpacing Western Europe's 4.3% and North America's 5.6%. Non-transaction revenues, which surged during the high-rate era, are anticipated to face sharp deceleration, particularly in Europe.
Why It's Important?
The forecasted growth in global payments revenue signifies a shift in the financial landscape, with transaction-related revenues becoming a key driver. This trend reflects the increasing adoption of digital payment methods and the growing importance of financial technology in global markets. The slowdown in growth rates may impact financial institutions and businesses that rely on non-transaction revenues, prompting them to adapt their strategies to maintain profitability. The regional differences in growth rates highlight the varying levels of digital payment adoption and economic development across the globe, with Latin America and Eastern Europe emerging as significant growth areas.
