A snapshot on global payments industry
McKinsey Global Payments Report 2022
McKinsey’s Global Payment Report 2022 (published in September 2023) highlights the changes that have taken place in the payments industry over the years. The report is based on analysis of more than 25 payment products in 47 countries, accounting for 90% of global GDP.
Here is a summary of the report.
Payments revenue grew at 11% in 2022, reaching an all time high of $2.2 trillion. It is expected that this would reach $3 trillion by 2027.
Asia-Pacific region accounted for 47% of global payments revenue.
About half of the revenue growth came from rising interest rates.
Commercial payments accounts for about 53% of revenues and consumer payments constitute 47%.
Cross-border payment flows reached a peak of $150 trillion.
Cash usage declined by 4% globally in last one year, and it has declined about 20% in last five years. In India, the cash usage fell by 7% in 2022.
Revenue growth is expected to be around 6-8% annually for the next few years.
Payments are increasing getting disconnected from accounts.
India specific
Cash usage fell by 7%.
The volume of India’s digital payments has grown ten-fold in the last five years.
India’s UPI’s share of digital transactions role from 8% in 2017 to nearly 75% in 2022.
India’s revenue from payment services crossed $65 billion. It is now in fourth position, behind China, US and Brazil.
The following diagram highlights the evolution of payments over the years.
