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Finance

Global payments industry bounced back to new high - McKinsey

Cash usage, which crashed 15% in the pandemic-hit 2020, did not re-emerge as physical stores reopened in 2021, with just a 1% uptick

The global payments industry bounced back last year to wipe out the pandemic-related lull from the year before and reach a new high.

Payments across credit and debit cards, online payments and other flows reached US$2.1 trillion, McKinsey said in a report released overnight.

This represented growth of 11%, which was more robust than forecast after 2020 saw the first decline since 2009.

Growth of 13% in the Asia-Pacific region accounted for 57% of revenue growth, with China dominating at 88% of that total but with the use of instant payments in India and Thailand close to doubling, while mature economies such as Australia and Singapore grew at around 50%.

Europe, the Middle East, and Africa (EMEA) registered double-digit gains, while Latin America and North America grew roughly 7%.

Fee-based revenue continues to increase at a faster rate than net interest income and comprises more than half of the total.

McKinsey now forecasts total payments to exceed US$3tn by 2026.

Cash usage, which crashed 15% in the pandemic-hit 2020, did not re-emerge as physical stores reopened in 2021, with just a 1% uptick.

Within Europe, Greece and the Czech Republic had the sharpest reductions in cash usage from 2019 to 2021, at 15 percentage points and 12 percentage points respectively.

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