Trend reversal in payments sector: Despite remarkable global growth in recent years, payments revenues will halve by 2028. The compound annual growth rate (CAGR) is estimated at 5%, equivalent to a revenue pool worth $2.3 trillion. This is significantly lower than the 9% CAGR recorded by the sector in the previous five years, which brought global revenues to 1,800 billion dollars in 2023. This is what emerges from the 22nd edition of the “Global Payments Report” of Boston Consulting Group (BCG).
The global scenario
The North America and Europe they will record the more drastic declineswith a projection for annual revenues of just around +3%. Asia-Pacific remains a growth engine growing at 6% annually, fueled by the growing adoption of digital payments and the rise of middle-class consumers. Latin America and the Middle East and Africa are expected to see higher annual growth rates of 7% and 9% respectively, thanks to the acceleration of digital payments in emerging markets. “The expected slowdown in the growth of the payments sector requires a strategic change of pace for market players. It is essential to focus on cost optimization and profitability, leveraging innovation and technologies such asartificial intelligence and GenAI also to improve operational efficiency. In an environment where margins are thinning, companies must find ways to automate processes, reduce inefficiencies and offer innovative payment solutions that increase value for customers – Explains Ugo Cotroneo, Managing Director and Senior Partner of BCG -. With consumers increasingly demanding and oriented towards digital and instant payments, it also becomes essential to strengthen risk management, compliance and cybersecurity. The increase in the speed and digitalisation of payments, combined with a more pervasive use of AI requires greater attention to operational risks and security”.
The Italian market: between innovation and sustained growth
The payments industry is rapidly transforming in our country, driven by the growing adoption of digital solutions and the progressive acceleration of technological innovations. In 2023, in Italy have been carried out 12 billion cashless transactions (retail, i.e. transactions initiated by consumers, and wholesale, initiated by businesses), 83% of these were carried out by card, which remains the preferred payment method for Italians. Estimates predict that in our country the sector’s revenues will reach 30 billion dollars by 2033. Looking at individual sectors, the retail segment will reach 20 billion dollars in revenues in the next 10 years, while the wholesale segment will reach 10 billion of dollars to 2033. “Italy – states Cotroneo – is at one turning point for the future of paymentsespecially in light of the new European regulations on instant and digital ones. The reduction in the use of cash, in line with EU directives, is accelerating the implementation of safer, faster and more efficient payment solutions. New technologies and instant payments represent key tools for improving processes and reducing transaction execution times, ensuring a tangible competitive advantage”.
The innovations that will redefine the entire payments ecosystem
The BCG report highlights how the growth of digital payments in Italy follows a global trend that sees a progressive reduction in the use of cash. In more mature markets, such as the US, UK and the Nordics, the transition is now almost complete, with less than 10% of consumer transactions still carried out in cash. Even markets that are traditionally more cash-based, such as Germany, recorded a strong decline, with the value of cash transactions in stores falling from 50% in 2010 to around 25% in 2023. This trend is expected to continue, as solutions such as account-to-account payments and digital currencies gain increasing relevance. Among the key innovations that are transforming the sector cannot be missed generative artificial intelligence (GenAI), which allows companies to increase operational efficiency, improve customer experience and strengthen fraud prevention. Even i real-time payment systems they are revolutionizing the way transactions are managed, making it crucial for industry players to adapt to growing adoption of these technologies and enhance their operational infrastructures. The rise of central bank digital currencies (CBDCs) promises to further transform the industry, with programmable payments paving the way for new uses and greater efficiency in financial transactions.
