At roughly $605 billion of revenue, mainland China is the single-largest contributing country to global payments revenues, surpassing the United States by more than $100 billion and comprising two-thirds of overall APAC revenue (Exhibit 2). A successful mechanism for cross-border payments is essential for global economic growth. Then you will be able to mark statistics as favourites and use personal statistics alerts. Our forecasts assume global GDP growth averaging 5 percent annually from 2018 to 2023, based on projections from the Economist Intelligence Unit. At the same time, the global payments economy has been significantly affected, with an estimated 25% to 30% decrease in cross-border consumer to business payments. In 2015, the payments constituted 20 percent of the entire transactions in the payments industry, generating 50 percent of transaction revenues. “The world is converging on a new global standard—ISO 20022, the de facto global data standard for modern payments. Whilst collecting funds cross-border is the most prominent pain point, sellers working in a cross-border context have both local and overseas pay out requirements. Global revenue reached $1.9 trillion in 2018, reflecting 6 percent growth. Players, stakeholders, and other participants in the global Cross-Border Payment Platform market will be able to gain the upper hand as they use the report as a powerful resource. Trade flows as a percentage of global GDP have remained stable over this period. In, Accenture. Learn more about cookies, Opens in new Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more, Learn what it means for you, and meet the people who create it. Accenture. Overview and forecasts on trending topics, Key figures and rankings about brands and companies, Consumer insights and preferences in various industries, Detailed information about political and social topics, All key figures about regions and countries, Everything you need to know about Consumer Goods, Identify market potentials of the digital future, Technology Market Outlook However, the industry remains confident that the post-pandemic world will still see the cross-border payments sphere continuing its rapid evolution. Please try again later. tab, Travel, Logistics & Transport Infrastructure. Unlocking the power of instant cross-border payments The gpi Instant service works by connecting SWIFT gpi, the high-speed cross-border rails with real-time domestic infrastructure, in this case the UK’s Faster Payments. Enhancing cross-border payments is a G20 priority during the Saudi Arabian Presidency. Global Payments . Nearly half of the 2018 growth stemmed from C2B and B2C cross-border payments, despite the fact that these payments represented only around 25 percent of the revenue, in absolute terms. Growth will be fueled by the continued shift from cash and increased adoption of digital payments solutions. These developments have offset the fact that commercial account-liquidity revenue has been more negatively affected than retail account-liquidity revenue has. Our interview partner Bogdan Dinu is the perfect expert to lead us through the dense jungle of the cross-border payments landscape. The ideal entry-level account for individual users. Moreover, with a five-year historical CAGR in excess of 10 percent, these large-value transactions offer an attractive growth opportunity. Our forecasts assume global GDP growth averaging 5 percent annually from 2018 to 2023, based on projections from the Economist Intelligence Unit. WorldLink by Citigroup, which recently expanded coverage, allows clients to make payments via a single window without having to maintain local currency accounts. Quick Analysis with our professional Research Service: Content Marketing & Information Design for your projects: Industry-specific and extensively researched technical data (partially from exclusive partnerships). Accessed December 02, 2020. https://www.statista.com/statistics/609723/value-of-cross-border-payments-by-type/, Accenture. ", Accenture, Value of cross-border payments worldwide from 2016 to 2022, by type (in trillion U.S. dollars) Statista, https://www.statista.com/statistics/609723/value-of-cross-border-payments-by-type/ (last visited December 02, 2020), Value of cross-border payments worldwide from 2016 to 2022, by type, Number of bank customers in Nigeria 2016-2019, Payments at points of sale by type in Nigeria 2020, Volume of e-payment transactions in Nigeria 2019, by channel, Monthly value of e-payment transactions in Nigeria 2020, E-payments transaction efficiency rate in Nigeria 2020, Distribution of online payment methods in Nigeria 2020, Credit card penetration in Africa 2020, by country, Credit card penetration forecast in Nigeria 2010-2025, Debit card penetration forecast in Nigeria 2010-2025, Distribution of credit and debit cards scheme in Nigeria 2020, Number of mobile money agents in Nigeria 2016-2019, Transaction value of mobile money operations in Nigeria 2016-2019, Transaction volume of mobile money operations in Nigeria 2016-2019, Number of licensed MMOs in Nigeria 2016-2019, Number of check payments issued in Nigeria 2015-2019, Mean value of checks in Nigeria 2016-2019, Monthly value of money transfers per mobile app in Nigeria 2020, Monthly value of NEFT payments in Nigeria 2020, Monthly value of RTGS transfer payments in Nigeria 2020, Share of respondents that have cash reserves in the Euro area 2016, by country, Assessment of development of investments in payments technology Americas 2015-2018, Value of payments revenues globally 2010-2018, with forecasts to 2028, EU countries with the highest revenue in non-MFI payments 2018, by country, Capability of banks and start-ups to offer selected payment technologies 2016, Number of payments per capita in Netherlands 2010-2019, by type of payment service, Payment options offered or being developed by retailers worldwide 2016, Value of cross-border payments revenues globally 2018, by type, Projected growth of payments revenue globally 2018-2023, by type, Value of cross-border payments worldwide 2018, by type, Share of merchants reporting payment data theft globally 2018, Number of institutions offering payment services in the European Union 2010-2018, Non-MFI payment transactions in 28 countries in Europe 2016-2018, Payment transactions involving non-MFIs in EU 2011-2018, Number of one-time bill payments in the U.S. 2016, by method, Monthly value of total Bacs payments in the United Kingdom (UK) 2015-2019, Bacs: value of direct credit payments in the United Kingdom (UK) Q2 2013-Q2 2019, Number of institutions offering payment services in the Eurozone 2010-2018, Contactless payments and NFC in the Benelux, Value of cross-border payments worldwide from 2016 to 2022, by type (in trillion U.S. dollars), Find your information in our database containing over 20,000 reports, Tools and Tutorials explained in our Media Centre. The World Bank’s Payment Systems Development Group (PSDG) has made an attempt to strike the right balance between presenting all relevant issues in a level of depth that is appropriate for the various interested audiences, and making the information and data stemming from the Global Payment Systems Survey available to the overall public as soon as practicable. Although nearly three-fourths of APAC’s growth will come from China, growth rates in India and Indonesia (9 percent CAGR for each) are expected to outpace China’s growth rate of 7 percent. Cross-border Payments on Blockchain Enabling Business-to-Business and Person-to-Person payments across borders on vendor blockchain-based payment rails Business-to-Business Person-to-Person Low-Cost 40–80% reduction in transaction costs (8% of transfer today) Near Real-Time 4-6 seconds average velocity of money (2-3 days today) Secure Key findings were discussed on a January webinar entitled Go Global: A Review of Progress and Pain in Cross-Border Payments (Off-site), where nearly 700 highly engaged stakeholders attended, demonstrating rich interest in this topic. There are three challenges that must be overcome in order to improve the cross-border process: 1. In Western Europe, which accounts for approximately 70 percent of the EMEA payments-revenue pool, the reasons behind the increase in commercial-payments share are twofold. Learn more about how Statista can support your business. collaboration with select social media and trusted analytics partners That figure is slightly above the global nominal GDP growth of 5 percent projected by both World Bank and Economist Intelligence Unit. Then you can access your favorite statistics via the star in the header. While this growth rate is unsustainable over the long term, it is projected to remain fairly high at a 14 percent CAGR for the next five years, well above GDP growth, based on our analysis of historical trends and projected macroeconomic growth in these countries. Chapter 5 allows you to discover your own stories and to narrow the results to a particular segment and revenue type. This growth rate is slightly above the expected global GDP growth rate of 5 percent, the result of a combination of factors. This is in part because of cross-border e-commerce payments, which are the fastest-growing subsegment in cross-border payments. GLOBAL PAYMENTS 2020: TRANSFORMATION AND CONVERGENCE // 2. Potential for Payment Growth. In North America, payments revenues have been growing two to three percentage points faster than GDP has for the past four years because of a combination of interest-margin expansion and rapid transaction growth. Getty. In part two of our three-part series on 2019 B2B payment trends, the focus is on the promising future for cross-border payments. For more on 2019 payment trends, check out our first post on payment automation. Recent research has shown strong revenue growth in the global payments system driven primarily by expanding e-commerce and rising cross-border payments, especially in the Asia-Pacific (APAC) region—suggesting that small and midsize enterprises (SMEs) face a rapidly “electronifying” payments … Asia–Pacific (APAC) payments revenues grew by 6 percent in 2018, in line with GDP growth for the region (but contrary to what one could expect, slower than in North America). The Global Payments Report 2019 revealed revenues from global payments amounted to $1.9 trillion, while transaction fee growth stagnated as a result of competitive … Current account revenues (both consumer and commercial), representing 60 percent of payment revenues in the region, prove to be extremely volatile. Europe continues to lag our estimates, stemming from a slower-than-predicted economic recovery. This result marks a return to growth following a 2 percent decline in 2017. Cross-border revenues were revised upward by approximately $15 billion compared with the 2018 Global Payments Map, incorporating various enhancements, including margin updates for intra–European Union flows and revised C2B and B2C flows and revenue based on new insights. As we note in chapter 2 of the full report (available for download below), a renewed wave of merger activity is blurring the lines among providers serving various stages of the value chain. It confirms 2017’s outlier nature, owing to a one-off regulatory intervention affecting Brazil, the region’s largest payments market. Among other sources, Cross-border payments are a vital revenue stream for banks. Credit and debit cards are the dominant payment type North American merchants accept, but are much less common elsewhere. Cross-border payments are vital to the overall global payments infrastructure. Cross-border revenues were revised upward by approximately $15 billion compared with the 2018 Global Payments Map, incorporating various enhancements, including margin updates for intra–European Union flows and revised C2B and B2C flows and revenue based on new insights. B2B cross-border revenues are expected to grow at a tepid 3 percent CAGR for the next five years. The continued shift away from cash is partly a result of the strong performance of card transactions in combination with payments solutions enabled by genuine innovation (for example, real-time payments and mobile wallets) and regulation (for example, the second Payment Services Directive [PSD2] and open banking). Another important consideration when you’re processing cross-border payments is how money is settled into your account. Current APAC account balances ($20 trillion in our analysis) are an important revenue driver, with China being the “swing factor.” If current account balances have been growing slightly faster than economic growth has in the region as a whole (pointing to additional growth coming from an increasing share of consumers with bank accounts in the region), 2017’s regional revenue “explosion” (21 percent increase) was driven by China. In a new wave of activity, many countries, including Denmark, the United Kingdom, and the United States, have started upgrading (or have launched plans to upgrade) their large-value payments systems, given their systemic importance to financial systems around the world. This revenue source is extremely volatile, given its sensitivity to interbank rates and interest-rate changes that drive sharp margin fluctuations. Account-to-account payments systems at the point of sale are gaining momentum in countries like Denmark, Italy, and Sweden but do not yet add up to a significant volume shift at the aggregate European level. Register in seconds and access exclusive features. We are a payment network enabling the seamless movement of funds across borders. Both debit- and credit-card usage have grown at greater than 35 percent CAGRs over the past six years. Payments-revenue growth in Europe, in contrast with North America, has remained sluggish and below GDP growth, continuing the trend of the past two to three years (Europe comprises roughly 90 percent of the activity in Africa, Europe, and the Middle East [EMEA]). In fact, a recent study reveals that in 2019, cross-border ecommerce represented 24 per cent of total online sales in Europe, as well as a turnover of €108.75 billion. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more. Western Union (NYSE: WU), a global leader in cross-border, cross-currency money movement and payments, announced it has expanded real-time digital payout capabilities into 100 countries reaching billions of bank accounts. Trade flows as a percentage of global GDP have remained stable over this period. There are three underlying drivers behind this somewhat erratic growth trend: Underlying transaction growth remains remarkably strong. The rate of growth in electronic payments transactions has been nearly twice the GDP growth rate, propelled by the e- and m-commerce boom—as well as the continued shift away from cash and checks. Available to download in PNG, PDF, XLS format, Access to this and all other statistics on 80,000 topics from, Share of payments with e-wallet in Nigeria 2020, by leading service, Number of mobile money customers in Nigeria 2016-2019, Value of POS transactions in Nigeria 2015-2019, Popularity of financial products or services in Nigeria 2020. 25 November, 2020. Join an esteemed International Panel of FinTech, Trade, and Global Payment professionals for a lively discussion of the latest industry trends and developments. A key element of SWIFT gpi is its track-and-trace capability that lets you see where a payment is at any given moment. 2 B2B cross-border payments are thriving in today’s interconnected world. New, Everything you need to know about the industry development, Find studies from all around the internet. Something went wrong. The development of real-time low-value payments and alternate payments solutions over the past few years has set the stage for retail-payments disruption. Western Union, a global leader in cross-border, cross-currency money movement and payments, announced it has expanded real-time digital payout … You need a Single Account for unlimited access. Cross-border payments network Ripple (XRP) announced that it had become part of the ISO 20022 Standards Body, becoming its first member focused on distributed ledger technology (DLT). However, this mix has not remained static at a regional level. and over 1 Mio. We strive to provide individuals with disabilities equal access to our website. In some cases, nontraditional players leverage payments to increase customer engagement and either expand existing offerings (for example, mobile wallet GrabPay) or establish a foundation for a broader-based model (for example, Stripe and Square). Are you interested in testing our corporate solutions? Despite the headline-grabbing developments in Chinese retail payments, more than 60 percent of China’s payments revenue is sourced from commercial activity. As a result, net interest income on account balances in Western Europe has been declining for the past six years, falling by nearly 40 percent over this period. Reinvent your business. "Value of cross-border payments worldwide from 2016 to 2022, by type (in trillion U.S. So … The underlying developments are impressive. Join an esteemed International Panel of FinTech, Trade, and Global Payment professionals for a lively discussion of the latest industry trends and developments. The full report provides deeper analysis on more detailed aspects of the payments landscape. Electronic payments transactions have been growing at a staggering rate in the region—upward of 15 percent annually, more than 2.5 times the rate of GDP growth. Whilst collecting funds cross-border is the most prominent pain point, sellers working in a cross-border context have both local and overseas pay out requirements. At the same time, the global payments economy has been significantly affected, with an estimated 25% to 30% decrease in cross-border consumer to business payments. Directly accessible data for 170 industries from 50 countries Increasingly, nonbanks and nontraditional players are entering the fray to capture a share of this opportunity. Same day credit to the end beneficiary of nearly all payments: 50% within 30 minutes; 40% credited within 5 minutes; many in just seconds More than $300 billion carried over gpi every day across 1,100+ country corridors, representing 80% of all SWIFT cross-border payments (and growing!) Global cross-border bank claims continued to expand at an annual pace of 1%. In fact, the survey found that 37% of corporates were planning to spend $100,000 (£77,676) or more on payments technology over the next 12 months. FinTechs are expected to account for 13.3 percent of cross-border B2B transfer value by 2020, totaling $29 trillion, a nearly 6 percent increase from 2017 levels. We use cookies essential for this site to function well. Low volume does not imply lower economic value for providers: the average fee on a large-value transaction is nearly eight times that of an ACH transaction. Chart. The Cross-Border Payments Landscape 5 1. Please email us at: McKinsey Insights - Get our latest thinking on your iPhone, iPad, or Android device. Please do not hesitate to contact me. In addition, the emergence of large ecosystem players, like Alipay and WeChat Pay, has boosted the growth of mobile payments. As a Premium user you get access to the detailed source references and background information about this statistic. October 6, 2017. Dollars). Value of cross-border payments worldwide from 2016 to 2022, by type (in trillion U.S. dollars) [Graph]. New, Figures and insights about the advertising and media world, Industry Outlook The G20 has made enhancing cross-border payments a priority during the 2020 Saudi Arabian Presidency. The industry standard for global payments data. At par with the United States as recently as 2012, China has grown at a CAGR of 10 percent, compared with 6 percent for the United States. As a Premium user you get access to background information and details about the release of this statistic. 2. Join the conversation via #CrossBorderPayments Chart. The demand for fast, efficient and transparent cross-border payments is higher today than ever before. The work spans across the revenue collection and expenditure side, including large scale programs like tax collection, public sector salary payments, public procurement and other Government to Person (G2P) payments. Faster, cheaper, more transparent and more inclusive cross-border payment services would deliver widespread benefits for citizens and economies worldwide, supporting economic growth, international trade, global development and financial inclusion. FXC Intelligence is a financial data company specializing in international payments, ... Our research team, underpinned by our own cross-border payments data, produces new insights and analysis on the sector every week. Corporate solution including all features. This growth trajectory in cross-border payments highlights that shoppers are no longer put off by … Subscribed to {PRACTICE_NAME} email alerts. New Report On Global Cross-Border Payment Platform Market 2020 by Company, Regions, Type and Application, Forecast to 2025 added to Orbisresearch.com store which has 102 pages and available for purchase at US $ 3480. Facebook: number of monthly active users worldwide 2008-2020, Smartphone market share worldwide by vendor 2009-2020, Number of apps available in leading app stores 2020, Research expert covering finance, insurance & real-estate, internet & e-commerce, Profit from additional features with an Employee Account. All in all, despite the size and strong underlying momentum of China’s payments market, it is not easy for nondomestic competitors to play a role in it. Select topics and stay current with our latest insights, Tracking the sources of robust payments growth: McKinsey Global Payments Report, McKinsey Global Payments Report restatement. Cross-border payment challenges Cross-border payments are intrinsically inefficient because there is not one single ubiquitous global payment system. Never miss an insight. "Value of Cross-border Payments Worldwide from 2016 to 2022, by Type (in Trillion U.S. Cross-border payment flows will increase with growth in international trade. Although it remains the slowest growing of the four primary regions, Europe has established a somewhat heartening revenue trend, with consistent growth in the region (in contrast to the contraction experienced in the first half of the decade). In 2017, expanding margins and balance increases contributed to a similar degree to liquidity-revenue gains; in 2018, contracting margins neutralized ongoing balance gains entirely. This feature is limited to our corporate solutions. In fact, we estimate that nearly half of all global debit-card spending now occurs in China alone. This is among the highest shares observed across the 45 countries modeled in McKinsey’s Global Payments Report, which together compose nearly 90 percent of global GDP. facts. Please click "Accept" to help us improve its usefulness with additional cookies. Panel 4: Cross-Border Payments—A Global Roadmap for Improvements The G20 requested that an international task force propose a roadmap of concrete actions to improve cross-border payments. Adyen has extensive global coverage of over 30 currencies. First, retail-card revenues have taken a hit because of interchange caps. Published by Jennifer Rudden, Nov 6, 2020 This statistic presents the value of cross-border payments worldwide from 2016 to 2022, by type. There will, of course, continue to be further differences by region and segment. Cross-Border Payment Platform market is segmented by company, region (country), by Type, and by Application. This article focuses on some of the surprises and key takeaways emerging from McKinsey’s 2019 Global Payments Report (see sidebar, “McKinsey Global Payments Report restatement”). Our mission is to help leaders in multiple sectors develop a deeper understanding of the global economy. Notably, 95 percent of liquidity-revenue growth stems from higher balances—a source more predictable than margin changes, given the volatile interest-rate environment. Global-e eliminates all complexities involved in cross-border selling including fraud, currency fluctuation, distance selling regulation, country restrictions and import processing, to ensure a seamless risk-free merchant experience. The rise of potential global so-called ‘stablecoins’ such as Facebook’s proposed Libra has further increased regulators’ interest in cross-border matters. The estimated 2018 global cross-border-payments revenue was $230 billion, a 4 percent increase from 2017 and slightly below nominal GDP (Exhibit 3). Together they represent the output of Stage 2 of the three-stage process coordinated by the Financial Stability Board (FSB) to develop a global roadmap for enhancing cross-border payments. You can only download this statistic as a Premium user. Following a year of unprecedented, double-digit growth in 2017, global payments returned to its established pattern of steady yet strong performance. our use of cookies, and Credit cards alone will add an additional $160 billion of revenue (23 percent of global growth) over the next five years, as the largest credit-card market—the United States—will continue to deliver stable growth, while emerging markets will contribute increased penetration and usage. A single connection with us allows you to reach new markets and multiple payment options in more than 100 countries. In Latin America, for instance, retail payments have grown in dominance (63 percent share, up from 59 percent in 2013). The Cross-Border Payment Market Research Report is a valuable source of insightful data for business strategists. Real‑time Cross‑border Payments. Our outlook would likely change with a shift in the global macroeconomic climate. Key findings were discussed on a January webinar entitled Go Global: A Review of Progress and Pain in Cross-Border Payments (Off-site), where nearly 700 highly engaged stakeholders attended, demonstrating rich interest in this topic. The estimated 2018 global cross-border-payments revenue was $230 billion, a 4 percent increase from 2017 and slightly below nominal GDP (Exhibit 3). A successful mechanism for cross-border payments is essential for global economic growth. In Asia as well, account-to-account and credit-card fees per transaction are already comparable to those in developed countries and are not expected to undergo major shifts. Enhancing cross-border payments is a G20 priority during the Saudi Arabian Presidency. The value of global cross-border payments … Several long-standing trends were reestablished, offsetting 2017 outliers—notably, Latin America’s return to above-average growth. Looking forward, expected average annual growth in payments revenues over the next five years is 6 percent, with total revenues increasing by $715 billion and surpassing $2.7 trillion by 2023 (Exhibit 4). With nearly 40 percent of Latin America’s revenue growth coming from fee income, the fundamentals appear to point to continued strength. Use minimal essential Global Cross-Border Payment Market Research Report 2019-2025 has complete details about market of industry, analysis and current trends. The real issue is bringing together global ambitions with the realities of operating under local conditions and regulations, and this practical perspective is indispensable. Getty. The industry standard for global payments data. Roughly 45 percent of revenue growth is expected to be derived from account-liquidity revenue—an increase from approximately 40 percent over the past five years. Transaction revenues in China have “only” grown at a 13 percent CAGR from 2013 to 2018 because of lower transaction margins in China (compared with the United States, for example). From the global pandemic to trade wars, the Cross Border Payment Industry has continued to innovate and thrive in 2020. Cross-border payments is a US$22 trillion market 1 and it is a Cross-Border Payment Platform market is segmented by company, region (country), by Type, and by Application. B2B trade and nontrade payments, the largest share of cross-border payments by both volume and revenue, also grew by 4 percent. Sukriti Bansal is a knowledge expert at the McKinsey Knowledge Center in Gurgaon, Philip Bruno is partner in the New York office, Olivier Denecker is a partner at the Brussels Innovation Center, and Marc Niederkorn is a partner in the Luxembourg office. Players, stakeholders, and other participants in the global Cross-Border Payment Platform market will be able to gain the upper hand as they use the report as a powerful resource. However, the industry remains confident that the post-pandemic world will still see the cross-border payments … Asian revenues have been very volatile over recent years: their growth significantly lagged behind GDP growth in 2015 and 2016 before sharply exceeding it in 2017. For example, one analysis estimates that disruptions to cross-border data flows and services trade could result in a negative impact on the European Union of up to 1.3 percent of GDP as well as a potential drop in EU manufacturing exports to the United States of up to 11 percent. The high growth rates make these segments very attractive for new entrants. 1 2020: Transformation ... the cross-border movement of salaries and pensions and a host of other core activities) will become part of the ... the opportunity to link data and analytics to the flow of payments is . As technology offers evermore payment options and globalisation continues, it is little wonder that treasurers are increasingly looking to upgrade their cross-border payment processes. 25 November, 2020. Following a period of tepid growth between 2009 and 2013 (including two years of post-crisis declines), US credit-card balances have resumed an upward trend, increasing by more than 4 percent consistently for the past four years. Changes to cross-border payments have a bearing on the stability of the international monetary system, on financial inclusion, and on the efficiency of trade and financial markets. SWIFT gpi is a first step in solving this longstanding cross-border payments challenge because it covers the interbank portion of the transaction flow. Adyen has extensive global coverage of over 30 currencies. Global Payments Market Overview In an increasingly globalised world, technology has broken down many barriers created by geography. Indeed, a large share of China’s revenues is derived from liquidity, which is somewhat shielded from competition as inaccessible to nonbank service providers—and most likely to foreign bank entrants as well. Global Payments Market Overview In an increasingly globalised world, technology has broken down many barriers created by geography. This and the cross-border-payments solution by TransferWise, an online money-transfer system based on peer-to-peer matching, are examples of solutions that are competing with traditional correspondent banking. International payments have been a crucial element in the growth and sustainability behind today’s global economy. Global Cross-Border Payment Market Research Report 2019-2025 has complete details about market of industry, analysis and current trends. Support the digitization of Government payments as part of cross-cutting work in areas like Social Protection, eGovernment and Public Financial Management reforms. This does not imply an absence of opportunity, however. Flip the odds. Growth has mostly been volume driven, as margins remain under pressure from stiff competition, the emergence of new solutions, and disintermediation from ecosystem players. Please contact us to get started with full access to dossiers, forecasts, studies and international data. McKinsey Global Payments Report revenues (historical and forecast) have been restated based on revisions to payments volumes and transactions by national authorities and transaction pricing in select countries, most notably China (around $100 billion downward); a restatement of cross-border payments revenues (around $15 billion upward); and an expansion of calculated versus estimated real-time gross settlements and real-time large-value payments across all regions (around $3 billion upward). The first is strong growth in account-liquidity revenue at a 7 percent CAGR. Cross-border payments are expected to face some margin erosion as a result of increasing competition from fintech companies. Based on previous sensitivity analyses, we estimate that a change of one-half percentage point in GDP growth would likely lead to a corresponding change of one to one-and-a-half percentage points in payments-revenue growth. Cross-border transactions1 Account-related liquidity2 Domestic transactions3 20% 8% Cross-border transactions4 Account-related liquidity2 Credit cards 100% = $880 $515 $345 $210 Credit cards 2% 3% 5% 6% 8% 15% 4% 1% 6% Payments revenue, 2018, % (100% = $ billion) Exhibit 2 Asia-Paci˘c continues to dominate the global payments revenue pool. i For decades, Western Union already paid out in minutes into 550,000 agent locations in 200 countries and territories. You need at least a Single Account to use this feature. The demand for fast, efficient and transparent cross-border payments is higher today than ever before. Our outlook would likely change with a shift in the global macroeconomic climate. By segment, global payments revenues in 2018 were split close to equally between retail ($1.02 trillion) and corporate ($930 billion)—similar to the distributions of the past few years. In 2018, the estimated account-liquidity-related revenue in China was $410 billion, two-thirds of which was derived from the commercial side. The task force’s co-chairs will unveil this ambitious roadmap, and kick-off a public consultation with users, innovators, regulators, and policymakers to further refine the plan. 1. The real issue is bringing together global ambitions with the realities of operating under local conditions and regulations, and this practical perspective is indispensable. FinTechs are expected to account for 13.3 percent of cross-border B2B transfer value by 2020, totaling $29 trillion, a nearly 6 percent increase from 2017 levels. Mobile payments transactions grew at a 123 percent CAGR in China from 2013 to 2018 and, based on data published by the People’s Bank of China, are estimated to have exceeded 300 billion (or roughly 210 transactions per capita) in 2018. Update, Insights into the world's most important technology markets, Advertising & Media Outlook Global cross-border e-commerce market share 2016-2022 Challenges for logistics providers in last mile delivery 2020 Top challenges with cross-border e-commerce in the supply chain industry 2020 Second, corporate account-to-account payments have exhibited solid revenue growth, driven by both increases in volume and unit pricing as banks seek to counterbalance the loss in liquidity revenue. Please create an employee account to be able to mark statistics as favorites. The industry has developed SWIFT gpi, as the new standard in global payments. Additional growth is also expected from some margin recovery in Europe. But while new initiatives and payments technology innovations have emerged in recent years to move cross-border payments forward, multiple obstacles remain in place and new ones are quickly becoming more apparent. Global Panel of Industry Experts: Webinar Discussion Topics to Include: •Global Regulations […] Posted on August 16, 2019 Cross-border payments are expected to surge over the next few years as the economy becomes increasingly global and interconnected. Tracking payments across 55 networks and market infrastructures Enhancing cross-border payments is a G20 priority during the Saudi Arabian Presidency. On the other hand, in EMEA, commercial payments now account for a majority of the revenue (52 percent, up from 49 percent in 2013). Learn about Our flagship business publication has been defining and informing the senior-management agenda since 1964. The Cross-Border Payments Landscape 5 1. An improving interest-rate environment has enabled net interest margins on current account balances to deliver a small but favorable increase each year. The Cross-Border Payment Market Research Report is a valuable source of insightful data for business strategists. ... FXC Intelligence provides some of the best data and insights on the cross-border payments industry globally. Revenue growth in Latin America is expected to moderate to a more sustainable 7 percent over the next five years—approximately half of its historical growth rate. Enhancing cross-border payments is a G20 priority during the Saudi Arabian Presidency. Another important consideration when you’re processing cross-border payments is how money is settled into your account. Ideally, you want to get paid as quickly as possible in whichever currency you prefer. Despite the encouraging signs in transaction growth and fee revenue (4 percent in 2018), these gains are offset by marginal declines in liquidity revenue. People create and sustain change. More than a mission statement: How the 5Ps embed purpose to deliver value, What’s next for remote work: An analysis of 2,000 tasks, 800 jobs, and nine countries. Although card spending in China is nearly 1.5 times that of the United States, it generates a revenue margin of roughly 1 percent, compared with 3.5 percent in the United States. Based on previous sensitivity analyses, we estimate that a change of one-half percentage point in GDP growth would likely lead to a corresponding change of one to one-and-a-half percentage points in payments-revenue growth. Most transformations fail. So … Full Conference: Cross-Border Payments—A New Beginning. Press enter to select and open the results on a new page. Chart. The Federal Reserve recently conducted a review of the current cross-border payments landscape to better understand developments and ongoing challenges. In our base-case forecasts, we do not anticipate a significant change in average fees per transaction for domestic payments. A paid subscription is required for full access. And reforms may unlock innovation and much needed growth, particularly following the COVID-19 crisis. Digital upends old models. We'll email you when new articles are published on this topic. Transaction-fee growth has been more muted as regulatory and competitive pressures have depressed margins (albeit from a very healthy starting level). You only have access to basic statistics. Please authenticate by going to "My account" → "Administration". For the October 2020 meeting of the G20 finance ministers and central bank governors, the FSB has presented two reports of high significance for the global payments industry. ... underpinned by our own cross-border payments data, produces new insights and analysis on the sector every week. The second factor supporting payments-revenue growth is the increase in electronic payments transactions, especially in emerging countries. Enhancing cross-border payments has become an important global policy agenda, to counter fragmentation and to facilitate continued orderly functioning of the international trade and financial system. They rose by $134 billion during Q4 2018, to stand at $29 trillion at end-2018. Download The 2019 McKinsey Global Payments Report, the report on which this article is based (PDF–1MB). Roadmap for enhancing cross-border payments The FSB laid out a roadmap for tackling inefficiencies in cross-border payments. The G20 has made enhancing cross-border payments a priority during the 2020 Saudi Arabian Presidency. Latin America was the fastest-growing region in revenue terms, at 10 percent, in 2018. As the Head of Product in leading global payments network Thunes , he is set to support the business through its next phase of global expansion. For example, Hyperwallet is a platform targeting B2C cross-border payments that addresses the need for global mass payouts over a variety of payments rails, including wallets, cards, and bank transfers. Electronic payments transactions in Europe are growing consistently, at double European GDP growth rates (from 2013 to 2018, 7.9 percent compound annual growth rate [CAGR] versus 3.5 percent GDP CAGR). This CPMI report provides technical background to the main policy report that it accompanies. The overall expansion was driven mostly by cross-border claims on non-banks, especially non-bank financial institutions (NBFIs), which … dollars)." Global Panel of Industry Experts: Webinar Discussion Topics to Include: •Global Regulations […] The fastest-growing segment in cross-border payments, however, is C2B, fueled by cross-border e-commerce, which we expect to grow at a 7 percent CAGR from 2018 to 2023. This is primarily fueled by the increase in volumes in countries like China and India, which together hold about one-third of global account balances and for which GDP growth is expected to be higher than the global average. Large-value and interbank payments systems—largely domains of corporate activity—are critical parts of any country’s payments infrastructure. B2B Cross-Border Payment Value Worldwide, 2020 & 2022 (trillions) Chart. The Federal Reserve recently conducted a review of the current cross-border payments landscape to better understand developments and ongoing challenges. cross-border payments process and how a combination of forces are influencing its future. The need to modernize these systems cannot be ignored; fortunately, markets have begun to take notice. With more than 60 percent of cross-border payments being sent on SWIFT Global Payments Initiative (SWIFT gpi), cross-border traffic increasing on Ripple, and the value of real-time B2B payment settlement and clearing being demonstrated, real-time cross-border payments are removing inefficiency, costs and lack of transparency that have long hindered cross-border transactions. Statista. By customer segment, retail payments are expected to fuel growth in the Americas, while commercial payments are expected to predominate in APAC and EMEA, extending the current revenue mix in the regions. Among other sources, Cross-border payments are a vital revenue stream for banks. International payments have been a crucial element in the growth and sustainability behind today’s global economy. However, given already-low margins in Europe (after the recent imposition of interchange-fee limits) these new challengers are less likely to affect pricing. Electronic payments transactions have been growing at a staggering rate of 22 percent in emerging countries over the past five years. This statistic is not included in your account. As always, however, the composition and dynamics of payments revenue vary dramatically by region, necessitating a disaggregated geographical assessment. The report estimates that services currently account for more than half (55%) of all global trade flows, equating to US$13.7trn of cross-border transactions in 2019. Unleash their potential. Please use UP and DOWN arrow keys to review autocomplete results. Ideally, you want to get paid as quickly as possible in whichever currency you prefer. Cross-border payments is a US$22 trillion market 1 and it is a After an unusual global payments-revenue growth rate of 11 percent in 2017, largely because of a sudden surge in Chinese liquidity, growth returned to a more typical yet solid 6 percent in 2018 (Exhibit 1). As soon as this statistic is updated, you will immediately be notified via e-mail. If you would like information about this content we will be happy to work with you. This growth has been fueled by the adoption and growth of alternative digital-payments mechanisms (migrations of large pools of cash payments) in a strong push from regulators to reduce cash. Western Union, a global leader in cross-border, cross-currency money movement and payments, announced it has expanded real-time digital payout … (October 6, 2017). Global cross-border e-commerce 2018 Published by Daniela Coppola , Nov 26, 2020 Cross-border e-commerce is seeing explosive growth, driving a race among payment providers and acquirers to equip online sellers with the technology to accept any kind of payment in virtually any region. hereLearn more about cookies, Opens in new If many of the underlying trends (for example, rapid growth in electronic transactions) in the two locations are similar, the European picture is dominated by the further weakening of the interest-rate environment, with negative interbank rates having reappeared in the eurozone. Cross-border payments have grown in size to amount to about $20 trillion in 2019, Cunliffe said this week. From the global pandemic to trade wars, the Cross Border Payment Industry has continued to innovate and thrive in 2020. tab. Compared with other payments instruments, these large-value transactions (settled in real time over systems like CHAPS in the United Kingdom and Fedwire Funds in the United States) are quite low in volume but significantly higher in average value, at roughly $200,000, compared with $3,500 for an automated clearinghouse (ACH) credit transaction and only $60 for a debit-card transaction. cookies, global payments-revenue growth rate of 11 percent in 2017, McKinsey_Website_Accessibility@mckinsey.com. In 2015, the payments constituted 20 percent of the entire transactions in the payments industry, generating 50 percent of transaction revenues. This growth has been fueled by economic factors (especially in emerging economies), an ongoing shift from checks to electronic applications as means of payment for high-value transactions in many countries, and the need for enhanced speed and information that accompanies fund movement in these upgraded systems. Profit from additional features by authenticating your Admin account. In 2018, estimated C2B and B2C cross-border revenues were $37 billion and $18 billion, respectively. Interest income on current accounts is estimated to have provided roughly one-fifth of US payments revenue in 2018, the lowest share among the four primary regions. For instance, account-related-liquidity revenue jumped 38 percent in China in 2017 before slipping by 1 percent in the current cycle. Options in more than 60 percent of Latin America ’ s payments revenue vary by! Change with a five-year historical CAGR in excess of 10 percent, these large-value transactions offer an attractive opportunity. 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