The rapid digitization of payment technologies and products has created a tumultuous competitive landscape. Attracted by its burgeon\u00ading growth, new players and investment have poured into the pay\u00adments space. Big technology companies like Ant Financial, Tencent, Facebook, Apple, and Google have entered the market, but so have neobanks with niche offerings. According to Boston Consulting Group\u2019s Fintech Control Tower, more than 27% of cumulative fintech funding globally from 2000 through the first quarter of 2019 has flowed into payments.<\/p>\n
Although BCG does not believe that the traditional incumbent payments ecosystem is in immediate danger, systemic challenges are becoming more acute as the number of competitors attacking different points along the value chain grows. Attackers will continue to erode the edges of incumbent profit strongholds, focusing on high-growth niches. For instance, emerging working-capital lenders and point-of-sale (POS) financing providers have begun to target the payments-\u00adbased lending pool\u2014pursuing a revenue stream that accounts for approx\u00adimately $300 billion in revenue globally. Established players cannot cede ground in strategic areas such as these without weakening their core business over time. To stay relevant and sustain strong revenue growth, payments players must become ultra-focused, concentrating on areas that are likely to be critical in the future and selecting those where they have natural advantages.<\/p>\n
For issuers, this means innovating in lending, co-branding, and customer experience, as well as monetizing the use of data and analytics. Merchant acquirers\u2014particularly bank-owned ones\u2014need to decide quickly whether to build needed capabilities in-house or find a partner that can fill critical gaps and grow with them.<\/p>\n
Wholesale payments players also need to double down on strategic avenues of growth. Promising green-shoot areas include trade finance, supply chain finance, and cross-border payments. In addition, incumbents may be able to unlock significant cost savings and customer value by modernizing their technology platforms, advancing their use of auto\u00admation and data, and transforming their customer service model.<\/p>\n
These are among the findings of BCG\u2019s 17th annual analysis of payments businesses worldwide. Our coverage draws from BCG\u2019s proprietary global payments model, using data from SWIFT, a global pro\u00advider of secure financial messaging services. The first chapter of the report outlines recent developments in the payments market globally and regionally. The second chapter explores how retail providers should respond to ongoing digital disruption, and the third chapter \u00adexplains how wholesale banks can innovate from within and address the capabilities gap that exists between them and digital challengers. Ultimately, our report concludes, payments players that focus strategically on high-\u00advalue opportunities will be best positioned to ride the current wave of growth and to capture an outsize share of its rewards.<\/p>\n","protected":false},"excerpt":{"rendered":"
Lifted by the global shift away from cash, buoyed by the uptake of electronic transactions, and amplified by big tech and fintech innovations, payments revenue worldwide is on track to grow by 5.9% annually through 2028 \u2014 extending an unbroken streak that began in the aftermath of the 2008 recession. However, achieving growth above GDP levels will be challenging for incumbent players. To succeed, they must accelerate digitization, gain scale, and tap the potential of emerging markets.<\/p>\n","protected":false},"featured_media":48301,"template":"","meta":{"pmpro_default_level":"","tdm_status":"","tdm_grid_status":""},"product_brand":[],"product_cat":[2355,2347],"product_tag":[3475,2260],"class_list":["post-75757","product","type-product","status-publish","has-post-thumbnail","product_cat-digital-banking-en","product_cat-study-library","product_tag-2016-2020","product_tag-bcg","pmpro-has-access","first","instock","shipping-taxable","product-type-external"],"yoast_head":"\n