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Global Payments 2016 – McKinsey report on the future of the industry
Last month, McKinsey released a new report looking at the fundamental drivers of change in the payments industry across the world. The research team at Iliad always looks to secure and share the latest reports that we think are of interest to our customers.
Below you can find a brief summary of the contents and key findings. If you want to be kept up to speed with all the latest news in the industry you can subscribe to our newsletter here…
Key points and contents
- By 2020, the global payments industry will generate an estimated £2.2 trillion in revenue. McKinsey is predicting an average growth rate of 5% for the next four years.
- This rate is 1% lower than the previous report. They are now suggesting that growth will be less reliant on macro-economic factors such as interest rates. Despite global political uncertainty, McKinsey believes that the payments industry is still well positioned for long-term expansion and stability. Their view is that the underlying fundamentals for growth in payments (transaction volumes and adoption of electronic channels) is still strong.
- There’s no surprise in the fact that McKinsey believes digital innovation will continue to be a primary disruptive element. However, they discuss in great detail three aspects of the industry which they suggest will have major implications for financial institutions’ payment businesses. These are:
- the reinvention of commercial cross-border payments and correspondent banking.
- the ongoing modernisation of national payments infrastructures to match digital-era requirements.
- the continuing shift of retail commerce from bricks-and-mortar to digital platforms.
- In their opinion, payment providers seeking an edge in the coming years will need to come to terms with these developments which are all centred, in some way, around digitisation.
- The report contains:
- detailed regional analysis of revenue growth and margins.
- an exploration of the digital transformation of correspondent banking.
- analysis of the modernisation of the global payment infrastructure.
- an assessment of e-commerce and the impact of mobile.
If you want to read the full report, you can find it below: