Payments sector revenues set to continue growing

Despite the health crisis, revenues in the payments sector saw only a slight decline between 2019 and 2020. Growth is set to continue: according to the Boston Consulting Group's latest Global Payments report, the sector's global revenues could double from $1,500 billion today to $2,900 billion in 2030.

Payments: a sector little affected by the health crisis

The Covid-19 pandemic has had a very moderate impact on payments sector revenues, with a 2.5% drop between 2019 and 2020. Very quickly, the sector was able to face up to the crisis, which points to substantial growth in the years ahead.

According to the Boston Consulting Group's latest annual Global Payments report, this growth is expected to reach 7.3% over the next 5 years. Between 2025 and 2030, it will then reach a rate of 6.4%, leading to a doubling of revenues in the payments sector: currently at $1,500 billion, they could reach $2,900 billion by 2030.

" The payments industry has demonstrated its ability to transform, adapt and support individuals and businesses since the onset of the crisis. The resilience of payment players has contributed to the rebound of the global economy," said Yann Sénant, Global Head of Payments and Managing Partner at The Boston Consulting Group, in a recent press release.

In his view, " traditional players will be forced to rethink their positioning, their offerings and their operating methods ", due to the many innovations being brought to the market by new players.

Banks and fintechs: essential partnerships for payments

Currently, the payments sector is dominated by Asia, and China in particular, where mobile transactions, thanks in particular to players such as WeChat and AliPay, have boomed: in 2016, they accounted for $7,000 billion, rising to $37,000 billion by 2020. This growth has not escaped the notice of investors: Asia has secured 44% of global funds raised by fintechs in Q1 2021.

Several American and European players stand out, such as Swedish fintech Klarna, Europe's best-valued company with a valuation of $45 billion, tripling in one year, or giants Square and Stripe, valued at $115 billion and $95 billion respectively.

According to the Boston Consulting Group's report, banks are likely to embrace a collaborative approach with new market players. The report's authors predict " a strong commitment and reinvestment by traditional banks in the payments business ", through partnerships aimed at " combining their distribution power with the efficiency, speed and cutting-edge technological capabilities of players frequently drawn from the tech world ".

This strategy was recently adopted by La Banque Postale, which teamed up with fintech Alma in May to roll out its fractional payment offering. BNP Paribas, for its part, has decided to opt for a buyout rather than a partnership with Floa Bank, which is impossible with the market leaders given their valuations.