Since 2022, public-market multiples have fallen sharply across much of the sector. A payments company can now grow at 20% annually, post 50% EBITDA margins, and still trade at only 12 times forward EV/EBITDA.
The Next Five Years Will See Meaningfully Slower Growth
The payments industry is still expanding, but revenue trends point to a secular downshift.
Global payments revenues totaled almost $2.0 trillion in 2025 and will reach nearly $2.6 trillion by 2030. (See Exhibit 1.) Compound annual growth will hover at just 5% over the next five years. This number is 2 percentage points lower than the one recorded over the past six years and well below the nearly 8% rate that the industry enjoyed during much of the past decade.
Investors are raising the performance bar, and payments leaders are finding it harder to deliver the high-single-digit growth that the market desires. Transaction-related revenues will grow by 6% annually through 2030, supported by continued digital adoption, particularly in faster-growing markets, and by inflation. Non-transaction-related revenues will remain the larger pool, but their growth will slow to 5% as the exceptional lift from higher interest rates fades.
Weakening Tailwinds and Shifting Market Forces
Several forces favored the sector in the most recent cycle. Cash and checks shifted to digital payments, e-commerce and cross-border activity grew, and instant-payment systems gained scale. In addition, providers expanded beyond basic processing into services such as routing, authorization optimization, working capital, loyalty, and fraud prevention.
Some of those tailwinds are weakening. Cash-to-noncash conversion has less room to run in mature markets, and competition, overcapacity, and regulation are exerting greater pressure on margins and profitability.
Regional Growth Opportunities and Scale
The slowdown will not be uniform. The largest revenue pools are generally expanding at a more moderate pace, with the smaller Latin America and the Middle East and Africa markets poised to outpace them.
North America is by far the largest revenue pool, at $842 billion in 2025. We expect revenues in the region to grow at roughly 5% annually, supported by continued expansion in both deposit-related revenues and payments, including cards, e-commerce, and payment acceptance.
Both Asia-Pacific ($515 billion) and Europe ($315 billion) will grow at roughly 5% annually, but for different reasons. In Asia-Pacific, digital-payment adoption will continue to expand rapidly, although revenue growth will trail volume growth as lower-monetizing rails gain share. India illustrates this dynamic: the country’s UPI payment system dominates everyday lower-ticket payments, while credit cards continue to expand online. In Europe, transaction-related revenues will drive more of the region’s growth, led by Eastern Europe and supported by greater use of contactless and instant payments and by cross-border activity.
Latin America ($200 billion) and the Middle East and Africa ($98 billion) are smaller but will grow fastest through 2030, at annual rates of 7% and 8%, respectively. Latin America will reach roughly $300 billion as instant-payment rails scale alongside cards in markets such as Brazil and Argentina. The Middle East and Africa will reach around $150 billion, led by cash-to-digital migration, instant transfers, and expanding card and point-of-sale acceptance. Non-transaction-related revenues in both regions should increase at a 7% CAGR.
What the Next Cycle Will Require
Capturing growth in this more uneven market will require pricing power, product velocity, a data advantage, and ease of integration. It will also entail playing a credible role in emerging flows at the intersection of software and payments, including those enabled by AI and digital assets. (See the sidebar “Digital Assets Have Arrived. Payments Needs a Plan.”)
Digital Assets Have Arrived. Payments Needs a Plan.
The Scale of the Opportunity
As of mid-2026, crypto market capitalization stood at roughly $2.3 trillion, with outstanding stablecoins accounting for $260 billion and tokenized real-world assets on public chains claiming another $38 billion. Despite their smaller scale, tokenized assets are already reshaping issuance, custody, servicing, and settlement, and they could represent 9% to 16% of global investable assets by 2035 under a high-growth scenario.
Today, the primary use for stablecoins is in crypto trading, but their presence is growing in real-economy payments where legacy rails are expensive, slow, or fragmented. Cross-border business payments, treasury transfers, platform payouts, remittances, foreign exchange settlement, and tokenized fund operations are the most immediate, high-value use cases.
In tandem with their attention to stablecoins, large banks are increasingly focusing on tokenized deposits, which bring some of the programmability of digital assets to conventional bank deposits. Banks including J.P. Morgan, Citi, HSBC, and DBS have tested or launched them for corporate clients. Their appeal is that they enable funds to stay on the bank’s balance sheet and within the existing regulatory perimeter. Their limitation is that tokenized deposits will not create scalable value until they are capable of moving between banks. Leading banks and central banks are piloting interoperability mechanisms, but this work remains at an early stage.
The Bank’s Strategic Advantage
Corporate clients are largely indifferent to the underlying technology of tokenized money. What matters to them is whether funds settle, reconcile, and post with minimal friction and at low cost. That concern creates advantage for providers that can handle routing, liquidity, compliance, and reporting behind the scenes.
Banks are well positioned to play this role. They bring licenses, compliance infrastructure, and established client relationships that are difficult to replicate. But those relationships are also at risk. If digital assets capture a larger share of cross-border payments and cash management, banks could lose float income, deposits, and fee revenue from some of their highest-margin transaction flows. That risk gives them a strong reason to protect their position as new forms of money movement gain ground. Stablecoins and tokenized money are unlikely to replace bank deposits or existing payment rails outright. As BCG’s 2026 report The Future of Digital Assets argues, legacy and tokenized rails are likely to coexist for years. But that doesn’t mean that today’s market positions will hold.
Capturing the Opportunity
Banks need to protect the client relationship while staying flexible across rails. Three steps can help:
- Quantify exposure. Leaders should know which fee pools are at risk by corridor, how sensitive bank deposits and float are to stablecoin adoption, and what it costs to run legacy and tokenized infrastructure side by side.
- Secure the client interface. Banks must develop robust capabilities across wallets, custody, and on- and off-ramps to maintain primary client access regardless of the dominant monetary format. Institutions that lack these services risk disintermediation and the loss of direct client relationships.
- Pursue a network strategy. Tokenized deposits and bank-issued coins require interoperability to be commercially viable. Active participation in industry consortia and standards development enables banks to shape the emerging settlement stack rather than having to adapt to frameworks that competitors have dictated.
Public Equity Markets Are Reordering the Sector
Investor confidence in payments companies has weakened after repeated growth downgrades, while capital has shifted toward AI. New rails, regulations, and competitors are changing the industry’s economics, too. The result is a widening divide in how public markets value different parts of the sector.
Buy now, pay later (BNPL) providers, digital assets, and card issuers have outperformed the S&P 500 in recent years. Meanwhile, acquirers and processors have posted negative returns, and networks have lagged behind the broader market. (See Exhibit 2.)
The weaker performance of acquirers, processors, and networks points to deeper pressure on established business models. Investors want secular profitable growth that outpaces the market. They pay close attention to share takers versus share donors and are less willing to reward scale unless it comes with product advantage, operating leverage, and a strong position in the higher-value flows surrounding the transaction. A small number of consistent share gainers have faced investor overhangs during the past 12 to 24 months.
Structural Shifts Put Pressure on Traditional Business Models
Several forces are reshaping how payments companies create and capture value:
- Competition is intensifying in core businesses. Acquiring continues to be burdened by excess capacity and legacy infrastructure. In issuing, growth is concentrating among scaled providers and fast-growing fintechs. The largest issuers have the capital to invest in rewards, data, digital experiences, and new monetization models that connect merchants and consumers. At the same time, nimble fintechs have gained significant share in areas such as commercial cards and B2B payments, with many of the strongest players becoming acquisition targets for larger incumbents.
- AI is raising the performance bar. By lowering the cost to serve clients, manage risk, and handle exceptions, AI can improve efficiency while accelerating product development. Agentic commerce could reshape the entire online transaction journey, from discovery and authentication through payment choice.
- Digital assets may create parallel infrastructure. Stablecoins, tokenized deposits, and digital-asset infrastructure continue to attract investment. Over time, they could shift value away from existing banks, networks, and intermediaries. The best opportunities for payments companies may lie in distribution, liquidity, compliance, and the connection of digital assets to real transaction flows.
- Payment sovereignty is fragmenting global models. Domestic schemes, account-to-account systems, regional payment linkages, and policy pressure on global networks are strengthening local alternatives, particularly for simpler domestic flows. More complex flows, such as cross-border commerce, advanced authentication, tokenized transactions, and future agentic workflows, remain harder to substitute. (See the sidebar “Payments Sovereignty Is the New Currency of Trust.”)
Payments Sovereignty Is the New Currency of Trust
The landscape looks different today. With tariffs, sanctions, and export controls once again serving as routine policy tools, access to a payment rail that moves billions of dollars a day can become a weapon in a trade dispute or a target for sanctions almost overnight. In response, governments have activated three main levers: the payment rails themselves, interoperability, and tokenized money.
Payment Rails
As of June 2026, individuals and businesses in 137 countries had access to 24-7 instant payment services. Public authorities play a central role in many of these systems through oversight, rule-setting, operation, or participation requirements, but governance models vary widely across public, private, and hybrid arrangements.
The scale of these networks is staggering. Brazil’s Pix processed nearly 80 billion transactions in 2025; Colombia’s Bre-B handled more than 670 million in its first six months; and India’s UPI processed 23.2 billion transactions in May 2026 alone. Across Africa, 36 instant payment systems were live in 31 countries by mid-2025, processing 64 billion transactions worth nearly $2 trillion in 2024. Meanwhile, Europe’s payment landscape combines established domestic card schemes, local account-to-account wallets, and newer pan-European solutions that range from Cartes Bancaires, Girocard, and Bancomat to wallets such as Bizum, Blik, and Twint. Wero is emerging as a pan-European account-to-account solution built on SEPA Instant Credit Transfer rails.
Interoperability
Domestic rails can strengthen sovereignty at home, but cross-border autonomy necessitates connections between national systems. Governments are therefore racing to build those bridges. In Europe, payment schemes such as Wero are working toward interoperability across national markets. Poland’s Blik has entered Romania and Slovakia. Regulators are also addressing cost and access barriers. The EU has extended caps on certain interregional interchange fees, and Apple has been required to open its tap-to-pay technology to competing wallets in the region. Together, these moves lower costs and expand access for alternative payment providers.
Elsewhere, Brazil has expanded Pix across its border with Argentina. Asian countries are pursuing similar goals. Project Nexus, developed by the Bank for International Settlements and partner central banks, aims to connect the region’s instant payment systems for 1.7 billion people. A separate industry accord among six national schemes similarly frames interoperability as a way to protect payment sovereignty. A more overtly geopolitical version of this dynamic is emerging in BRICS countries in the form of BRICS Pay, which will link members’ payment rails directly with each other, bypassing SWIFT and dollar settlement. A business-to-business rollout of this system has a launch target of the second half of 2026. A parallel effort, mBridge, already settles cross-border transactions in central bank digital currencies among China, Hong Kong, Thailand, the UAE, and Saudi Arabia. Neither system is close to rivaling SWIFT’s reach today, and BRICS members themselves have not uniformly committed to the project. But these efforts underscore how sovereignty and de-dollarization are now explicit design goals rather than side effects.
Tokenized Money
Governments are pursuing three broad responses in this area: banning dollar-linked stablecoins, building a central bank digital currency, and licensing locally denominated stablecoins as a private-sector alternative. Europe is pursuing the second and third approaches. In July 2026, the European Parliament approved the opening of negotiations on legislation for a digital euro, with the European Central Bank framing the project as protection against a payments landscape dominated by non- European card schemes and dollar stablecoins. Separately, a consortium of European banks is building Qivalis, a euro-denominated stablecoin, as a market-led complement to the public project.
China combines the first and second responses. It bans dollar-linked stablecoins and, since January 2026, has allowed commercial banks to pay interest on digital yuan wallets, making its CBDC more akin to a deposit account. China has also built its own messaging alternative to SWIFT. The Cross-Border Interbank Payment System settles renminbi-denominated transactions. It has grown steadily as a channel for trade with sanctioned or sanctions-wary counterparties. These efforts will not displace large international networks and rails overnight, but taken together they point to a more fragmented future marked by a patchwork of regional and national systems connecting countries that share interests and settling transactions in the currencies and over the infrastructure they trust most.
Although payments sovereignty is usually framed as a geopolitical issue, its most tangible consequences are commercial. Consumers and merchants gain greater choice, as markets that once relied primarily on cards or cash now support multiple payment rails and methods simultaneously. Acceptance costs may fall, too, since instant payment rails and potentially CBDCs such as the Digital Euro tend to be cheaper for merchants than traditional cards. Small merchants, in particular, stand to benefit from regulatory moves to cap interchange fees or mandate open access to payment hardware. Real-time systems can improve efficiency because they settle in seconds, carry richer data via common messaging standards, and reduce reconciliation work and working-capital friction.
These benefits introduce new complexity and tradeoffs. Domestic schemes will require deeper interoperability and capabilities to support e-commerce, agentic commerce, cross-border trade, and other activities to fully realize their cost and efficiency advantages. Where a small number of global networks once provided broad reach through relatively few connections, market participants must now navigate a fragmented landscape and manage multiple connections, each of which offers only limited reach. For payment providers, the new test of trust will be whether they can give clients broad reach across this fragmented system without forcing them to manage the fragmentation themselves.
The payments industry has expanded far beyond its original scope of moving money from one account to another. The companies that best position themselves for the next cycle will absorb more of that complexity on behalf of customers and will make commerce seamless for merchants and consumers.
