An analysis of the global payments industry by McKinsey & Company predicts that Covid-19 will result in a loss of revenues of between US$165bn and US$210bn in 2020 — and sets out “ten fundamental changes to the payments ecosystem that will help all of us find a new normal.”
“One thing is clear now: there will be no return to the norms of 2019,” the analysts say. “The impact on the behavior and expectations of customers and businesses — indeed the entire fabric of the economy — will be profound.
“So it is critical not only for the payments ecosystem but also for the economy as a whole to develop, today, the payments solutions that will allow economies to emerge from the current crisis efficiently and define the post-Covid-19 future.”
Projections
“Any projection of industry performance rests on assumptions about overall economic activity,” they explain.
“The outlook largely depends on the spread of the virus, the public health response, and the effectiveness of the fiscal, monetary, and broader public response.
“A relatively optimistic scenario, taking into account these variables, assumes that the virus will be contained after an economic lockdown of two to three months in Europe and the United States.
“Under this scenario, global GDP would decline in 2020 by 1.5%, which we estimate would result in, at most, a decline in payments revenues of around $165bn, some 8% lower than they were in 2019 — instead of the 6% increase against the base of $1.9tn we projected before the crisis.
“A second, more pessimistic, scenario contemplates a muted recovery, with resurgence of the virus in China and continued spread in the United States and Europe, leading to a continued drop in global trade levels
