Dive Brief:

• The global payments industry generated $2.6 trillion in revenue last year, with North America accounting for about $700 billion, second only to Asia-Pacific, which accounted for about $1 trillion, according to a report this month from consulting firm McKinsey.
• Global payments revenue rose every year from 2020 to 2025, but the rate of increase has slowed, growing just 3% between 2024 and 2025, following an average 11% gain in the prior years, the Sept. 25 report said.
• As a result, revenue from payments – including card fees and interest income – has swelled since 2022 to become about 40% of banking revenue annually, the report said. The industry kicked in 41% of banking revenue last year, down slightly from 42% a year earlier.

Dive Insight:

The rate of revenue growth for the payments industry will generally slow in coming years, McKinsey predicted. The results from McKinsey’s forecast echo a similar outlook from a rival, Boston Consulting Group, put forward earlier this month.

By 2030, McKinsey expects global payments industry revenue to climb to $3.2 trillion, with North American contributing about $900 billion to the 4% annual growth rate over intervening years. 

BCG similarly projected transaction revenue will climb to $1.03 trillion by 2030, from $770 billion last year, with the rate of growth expected to decline to 6% between 2025 and 2030, down from 8% between 2019 and 2025. 

How much the payments industry revenue growth rate slows will vary by region of the world as countries diverge in the types of payments systems they’re adopting and different types of payment methods thrive, or decline, in different parts of the world. 

While card networks continue to dominate in the U.S. and Canada, as well as Western Europe, India and Brazil have shifted their populations to account-to-account systems and much of Africa has adopted phone-based systems, the report noted. China has gravitated to a mix of cards and A2A transactions. Meanwhile, stablecoins are gathering momentum in some places (Africa and China), more than others (the U.S. and the U.K.)

The revenue growth rate is expected to sink the most in Europe, Africa and the Middle East, decreasing from a 14% annual average clip during the past five years, to a 3% rate from last year through 2030, according to McKinsey. North America will experience the second-biggest slowdown, from 9% to 5%, while the Asia-Pacific region decreases from 5% to 4%. Latin America is expected to grow at the fastest rate, 7%, the report predicted.

The contracting revenue will pressure companies in the payments arena to find new avenues of growth. In any case the slower growth is expected to put pressure on profit margins.

“One clear result is that institutions relying primarily on transaction-clearing volume face increasing margin pressure,” the McKinsey report said.

Four factors have bolstered payments income over the past decade, but those forces are now ebbing, McKinsey said. They included the conversion of cash payments to higher-yielding alternatives; payments volume outpacing gross domestic product expansion; rising interest rates that pushed up interest income; and the sale of related services driven by software. Now, those elements are giving way as competition rises.

“These drivers are now leveling off, and low-cost alternative payment networks are compressing transaction margins,” the McKinsey report said.

The rise of autonomous payments as part of agentic commerce could be another blow to the payments industry, potentially undercutting card fee revenue, McKinsey said. 

At the same time, the new technology offers payments companies a path to increased operational efficiencies, by decreasing administrative work expenses and increasing software engineering productivity, the consulting firm said.