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The world of transaction banking and payments will be transformed over next decade

Boston Consulting Group's annual Global Payments report, which in its 14th edition has become the industry standard, showed that the world of transaction banking and payments is being transformed, by three forces:

  • technological advances
  • shifting customer expectations and behaviors
  • regulatory changes. 

BCG believe that these forces “are, in turn, triggering a competitive rebalancing among incumbent banks, digital giants, fintech startups, card networks, consumers, and merchants.”

Then in typical BCG speak, they instruct the world what to do: “With nearly $2 trillion in revenues at stake by 2025, it is imperative that market players understand what’s fueling growth, and take action to ensure that they achieve or maintain market-leading positions.”

The interactive version of the report, see here, shows how regions and segments of the market are expected to evolve from 2015 through 2025. BCG believe that, “Change will take place at dramatically different speeds in mature and emerging markets.”

Diverging growth

Within 10 years, Asia-Pacific is expected to surpass N America in terms of total transaction value and revenues. Western Europe will fall behind while Latin America will gain:

Source & Copyright©2016 - BCG 

Retail payments

Not surprisingly BCG predict retail payments are going digital, what is surprising is the level of detail they provide in each of the regions, e.g.:

Source & Copyright©2016 - BCG 

Wholesale and cross-border payments

Here BCG find that:

  • North America stands out among mature markets for its relatively steady revenue growth, but they conclude that above-average growth is becoming increasingly difficult and requires forging a trusted advisor relationship and simplifying the role of the Treasurer
  • cross border payment grounds will vary by region with the highest coming from Asia-Pacific.

CTMfile take: As always, this report is a tour de force, examining how the forces underlying this evolution will vary depending on macroeconomic factors and the competitive and regulatory environments. The last chapter of the interactive report, allows readers to examine regions, segments, and revenue types in more detail and learn about the developments that are expected over the next decade. Worth a click or two.

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