Global Payments Market to Grow 9% Annually until 2026: McKinsey Report

The 2022 McKinsey Global Payments Report, released in October 2022, provides insights into the current trends and future outlook of the global payments market. 

The report projects that the average annual revenue growth of the market will be 9% between 2021 and 2026, with total revenue expected to reach US$3.3 trillion by 2026.

Key Trends Reshaping the Landscape

Embedded finance, technological modernization efforts from banks, and sustainability are some of the top trends that are reshaping the global payments market. 

These trends will play a significant role in driving the growth of the industry.

Payments Revenues Rebound in 2021

The report highlights that the global payments industry was resilient in 2021, despite market turbulence, with payments revenues rebounding strongly and growing 11% to reach a new high of US$2.1 trillion, exceeding expectations.

Embedded Finance to Drive Market Growth

Embedded finance, a rapidly growing trend, is expected to play a key role in the growth of global payments. Non-banks and technology players are already leveraging embedded finance to enhance their role in the commerce experience, increase engagement with end-users, and gather additional customer data. 

Traditional financial services are also being provided with new opportunities to address the demand for embedded finance.

Payments Modernization among Banks

Highlighted in the report is the push for payments modernization among banks and payments firms, with payments infrastructures undergoing full redesigns and banks making fundamental adjustments to their core payment systems. 

We expect global instant payments to continue growing at double-digit rates, faster than the 10% growth rate for cards over the past two years.

Rise of Digital Payments in Emerging Markets

The number of non-cash retail payment transactions globally is increasing, especially in emerging markets where innovations are proliferating. 

In markets with less developed payment infrastructure, non-bank wallets are outperforming traditional banks in digital payment usage.

Other Trends Highlighted in the Report

The report also highlights other important trends, including

• sustainability and the rise of ESG principles, 
• the macroeconomic environment, 
• geopolitical disruptions, and 
• the big capital market reset.

Conclusion

The 2022 McKinsey Global Payments Report provides a comprehensive overview of the current trends and future outlook of the global payments market. 

We expect the market to grow at a rate of 9% annually until 2026, driven by several key trends and forces reshaping the landscape, including embedded finance, technological modernization efforts from banks, and sustainability.