Boston Consulting Group Reports Slowing Global Payments Revenue Growth Due to Agentic AI and Real-Time Payments

What's Happening?

The Boston Consulting Group (BCG) has released its 23rd annual 'Global Payments Report', projecting that global payments revenue will reach $2.4 trillion by 2029. However, the annual growth rate is expected to slow to four percent over the next five years, a decrease from the 8.8 percent growth seen since 2019. This slowdown is attributed to a foundational reset in the industry driven by new technologies such as agentic AI and real-time payments. The report highlights that while traditional growth levers are losing momentum, new drivers like agentic systems and fintech innovations are emerging. Real-time account-to-account (A2A) payments are rapidly growing, with global volumes rising by 40 percent in 2024, now accounting for about a quarter of all digital retail payments worldwide.

Why It's Important?

The findings of the BCG report are significant as they indicate a shift in the global payments landscape, with potential impacts on various stakeholders including financial institutions, fintech companies, and consumers. The slowing growth rate suggests that traditional revenue streams are diminishing, prompting industry players to adapt to new technologies to maintain competitiveness. The rise of agentic AI and real-time payments could reshape consumer behavior, with 81 percent of US consumers expected to use AI tools for shopping. This shift could influence over $1 trillion in e-commerce spending, highlighting the need for businesses to integrate these technologies into their operations to capture market share.

What's Next?

As the industry adapts to these changes, companies that align with the emerging trends of agentic AI and real-time payments are likely to lead the next decade. The report suggests that the next winners in the payments sector will be those that not only adopt new technologies quickly but also integrate them deeply into their business models and customer value propositions. The continued growth of payments-focused fintechs and the role of digital currencies, such as stablecoins, will also play a crucial role in shaping the future of the industry.

Beyond the Headlines

The report underscores the complexity and growth potential in the payments industry, emphasizing the importance of strategic adaptation to technological advancements. The integration of agentic AI and real-time payments could lead to more personalized and efficient consumer experiences, potentially transforming the way transactions are conducted globally. This evolution may also raise ethical and regulatory considerations as the industry navigates the balance between innovation and consumer protection.