Global payments revenue growth to slow to 5% annually through 2028, McKinsey forecasts

Global payments revenue growth set to decelerate, McKinsey forecasts

Global payments revenue growth is poised to slow materially over the coming years, according to McKinsey's 2024 Global Payments Report, presented at Sibos 2024 in Beijing on 21 October 2024. The firm projects annual revenue growth of approximately 5% in the period ahead — down from 7% per year recorded across 2018–2023 — with total global payment revenues nonetheless forecast to reach $3.1 trillion by 2028, an increase of roughly $700 billion on current levels.

The findings mark a significant shift in the trajectory of one of financial services' most consistently expanding segments, and point to structural forces rather than cyclical weakness as the primary driver of the moderation.

Four headwinds behind the slowdown

McKinsey identifies four factors bearing down on revenue growth rates:

• Declining interest rates, which compress the float income financial institutions earn on funds held within the payments system — a dynamic made more acute by the elevated rate environment that characterised much of the 2018–2023 period now unwinding
• The proliferation of instant payments, which reduces settlement float and compresses margins on payment corridors where value had previously accumulated
• Further fragmentation of the value chain, as new entrants and specialist providers capture portions of the revenue pool historically concentrated among incumbent banks and networks
• The expanding cost of fraud, which forces providers to absorb growing operational and remediation expenses that erode net revenue

It is worth noting that the declining interest rates and fraud cost characterisations above reflect McKinsey's reported framing of these headwinds, as conveyed via the Treasury Today press release summarising the report; the full underlying McKinsey report text was not directly accessed for this article.

Commercial payments gain ground on consumer

One of the more structurally significant trends documented by McKinsey is the sustained redistribution of revenue between market segments. Over the five years from 2018 to 2023, the payment sector witnessed a steady and significant revenue shift from consumer to commercial in every market examined — a pattern that, if it continues, has meaningful implications for where investment and product development will be concentrated in the years ahead.

McKinsey's analysis suggests the global payments industry can still add roughly $700 billion in revenue by 2028 — but at a notably slower pace than the previous five years, as structural forces reshape the competitive and margin landscape.

Instant payments regulation as a European accelerant

The proliferation of instant payments — one of McKinsey's four cited headwinds — is particularly relevant for European market participants. The EU adopted instant payments legislation in 2024, creating mandatory requirements for payment service providers across the eurozone. Note: the specific regulation number has not been independently verified against EUR-Lex or the Official Journal of the European Union ahead of publication; readers should refer to the EU's official sources to confirm the precise legislative reference. In regulatory terms, mandated instant payment rails tend to compress margins on time-sensitive transfers, reinforcing the dynamic McKinsey flags at a global level.

Why it matters

The deceleration from 7% to approximately 5% annual growth may appear modest in percentage terms, but across a revenue pool already measured in the trillions of dollars it represents a meaningful reduction in incremental value creation for the industry.

For payments companies, infrastructure providers and their investors, the McKinsey analysis implies several practical considerations:

• Revenue pools that grew reliably on the back of rising interest rates and expanding digital transaction volumes will face a less supportive environment
• The commercial payments segment — where the shift has already been running for at least five years — may offer more durable growth than consumer-facing corridors
• Fraud cost management moves from a compliance obligation to a direct margin consideration at scale

McKinsey's headline number — $3.1 trillion in total global payment revenues by 2028 — remains substantial, and the consultancy's framing is constructive: the additional $700 billion represents an opportunity the sector can unlock, not merely a ceiling it will approach. Whether incumbents or challengers capture the larger share of that increment is the strategic question the next several years will answer.