Author: Will Awang
The payments industry in 2025 is at a turning point. What was once a pursuit of universal efficiency has now evolved into competition among various market systems, each with its own unique philosophy, capabilities, and limitations. Some systems focus on control and interoperability through central infrastructure, while others prioritize decentralization, programmability, and private rails. There are also systems embedding payment functions into platforms, devices, and networks traditionally unrelated to finance.
The way money moves is becoming as critical as the amount of money itself. Whether it’s payroll in Southeast Asia, B2B Settlement in Europe, or retail checkout in Latin America, today’s design choices are shaping the payments landscape for the next decade, determining who will lead, who will follow, and who will fall behind.
The global financial system is influenced by non-financial factors such as tariffs, data governance rules, energy constraints, and national security priorities. The increasing fragmentation in payments reflects the broader financial system’s evolution into a regional mosaic of different standards, timelines, currencies, and trust anchors.
Against this backdrop, payments remain the most valuable segment of financial services, generating $2.5 trillion in revenue (0.125% take rate) from $20 trillion in value flows, supporting 3.6 trillion transactions globally.
This brings Stablecoin/tokenized money payments and finance into the global payments map. From a Fintech perspective, the questions of who will integrate, how to integrate these fragmented systems caused by geopolitics and other factors, and how to leverage their own strengths to adapt to the next era of payments are issues all market players must consider.
The “2025 McKinsey Global Payments Report” provides an in-depth analysis of the rise of diversified payment rails, the impact of digital assets, and the transformative power of artificial intelligence, offering a roadmap for success in the rapidly evolving global payments ecosystem. The report highlights the key elements needed to stay competitive in a fast-changing environment. It is based on McKinsey’s “Global Payments Map,” which covers data from 50 countries and more than 20 payment methods, representing 95% of global GDP. The report is divided into three main sections:
- Foundational forecasts for industry growth through 2029, with detailed analysis of how economic fluctuations and policy changes lead to significant differentiation in profit margins and revenue structures. The focus is on whether new revenue streams can emerge from integrating multiple payment rails, a key driver of payment development.
- The main forces reshaping the payments landscape, including AI-native operations and affiliate monetization, emerging models of programmable payment Liquidity, and regulated digital currencies. The focus is on how these new forces will change existing models.
- Key areas for payment operators to focus on during transformation, emphasizing agility, architecture, and trust. The focus is on how to capture value.
I. Payment Revenue in the New Economic Era
From 2019 to 2024, global payments revenue grew at an average annual rate of 7%. Driven by rising Interest Rates, Interest income accounted for 46% of total revenue in 2024. That year, growth slowed to 4%, significantly lower than 12% in 2023. Reasons for the slowdown include: Interest Rates peaking, a weakening macroeconomy, structural expansion of low-yield payment methods, and ongoing Trading Fee compression.
By region, Latin America grew 11%, EMEA and North America rose 8% and 5% respectively, while APAC declined 1%. Despite this, payments remain the most valuable sub-sector in finance, with an average return on equity of 18.9% in 2024, and some institutions exceeding 100%.
However, as Interest Rates peak and fall in many countries and deposit behavior changes, net Interest income is expected to rise only about 2% annually (through 2029) if there are no major shocks. Meanwhile, consumers are increasingly favoring account-to-account transfers and digital wallets, which are low-cost methods, so transactional revenue growth will also slow. Ongoing pricing pressure (especially in card-based ecosystems), stricter regulation, and the rise of platform-based payment experiences are squeezing the Trading Fee model. Therefore, we forecast industry revenue growth to average 4% annually through 2029, possibly dropping to 3% if global disruptions occur, or reaching 6% if productivity accelerates. At 4%, the total market size will reach $3.0 trillion by 2029.
1.1 Global Payment Trends
Overall, global payments revenue is split almost evenly between consumer and commercial segments, but regional compositions differ significantly.
- North America leans toward consumer payments, as credit cards are both the main payment tool and a Borrowing instrument, reflecting a mature consumer credit market and strong card loyalty programs.
- APAC leans toward commercial, with 25% of revenue from commercial account NII, highlighting deep corporate banking relationships and fast-growing economies’ reliance on deposit Interest.
- EMEA is the most diverse: 20% of revenue comes from commercial account NII related to trade and treasury activities, and 20% from consumer account NII, benefiting from Europe’s high savings base.
- Latin America is similar to North America, also consumer-focused, with consumer credit card revenue accounting for 32% of total revenue, reflecting the importance of revolving credit and consumer reliance on installment payments.
1.2 Payment Development Trends Under Revenue Structure
Global cash usage continues to decline, dropping from 50% of all payments in 2023 to 46%. Account-to-account (A2A) payments are increasingly popular, especially transactions via digital wallets, now accounting for about 30% of global point-of-sale (POS) volume, with markets like India, Brazil, and Nigeria leading.
As transaction volume shifts to low-yield rails like Real Time payments, monetization becomes more difficult; this is especially pronounced in markets with strict regulation of interchange and processing fees. We expect new economic and fee models to emerge in the A2A space, possibly following India’s example—banks have begun charging payment aggregators merchant transaction fees for UPI.
In B2B payments, digitalization is widespread but mainly focused on bank transfers and Real Time payments, which are low-profit channels. To capture value, businesses (especially software-centric companies) are investing in value-added services, including invoice automation, reconciliation, and working capital tools; these services are especially important for SMEs and industries like healthcare that still rely on manual processes.
Finally, new technology continues to bring both opportunities and threats. From tokenization of money and digital currencies to AI-based anti-fraud and Liquidity management, innovation has improved security, efficiency, and reach. However, adoption is uneven. Regulatory uncertainty, infrastructure gaps, and inconsistent technical standards mean progress is often isolated and local.
II. Three Forces Reshaping Global Payments
Three structural forces may fundamentally change how money moves between individuals, businesses, and intermediaries:
- Increasing fragmentation and regionalization of payment systems;
- Large-scale adoption of digital assets in payment scenarios;
- The transformative potential of artificial intelligence.
2.1 Fragmentation and Regionalization of the Payments Landscape
The global payments ecosystem is entering an unprecedentedly complex phase, driven by the high interconnection of goods, services, and people. Over the past 30 years, globalization ensured smooth cross-border money flows. However, geopolitical events have prompted some countries and regions to reduce reliance on global standards and systems. For example, sanctions against Russia excluded it from international card organizations, leading it to rely on MIR cards for domestic transactions and co-branding with China UnionPay for international needs. Some countries and regions are pushing for “payment sovereignty” to drop dependence on global intermediaries; the European Central Bank is actively promoting large-scale systems centered on Europe.
Meanwhile, technological advances are accelerating the growth of local and regional payment systems. Building Real Time payment infrastructure is especially critical, creating excellent user experiences (notably Brazil’s Pix, Spain’s Bizum, India’s UPI). Increasing interoperability among domestic Real Time payment systems is providing new paths for cross-border payments beyond traditional standards. Pix’s internationalization in Latin America and India’s NPCI expansion into the Middle East and Southeast Asia are prominent, fast-growing examples. At the same time, the rapid adoption of Stablecoin is creating a new channel distinct from traditional payment rails.
These geopolitical and technological changes are reshaping the payments map, driving greater regionalization and diversity. Returning to the fully globalized payments system of five years ago is unlikely, as the forces driving fragmentation are already in motion. However, many alternative payment systems face obstacles in expansion: poor user experience, unclear value propositions, governance flaws, and lack of supporting legislation in key markets; in some cases, legacy systems have shown enough resilience to bypass or defeat new solutions.
Therefore, the payments landscape is evolving toward two even more fragmented outcomes: one is a “multi-rail + global Secret Key” diverse ecosystem; the other is a “deepening localization + decline of global standards” divided world.
Scenario A: Multi-Rail Ecosystem with “Global Secret Key”
In a more optimistic scenario, geopolitical tensions stabilize or ease, payment standards remain strong, and serve as a “global Secret Key” for various payment scenarios and customer types. The scope of services can be broad or narrow—from online shopping to a range of value-added services; the depth of services can be deep or shallow—from industry-specific cross-border financial solutions to simple remittances for the masses.
In this environment, participants must tackle multiple challenges: monitoring and regulating money flows across multiple rails, dealing with huge economic differences between use cases and systems, and achieving technical integration between systems. This may give rise to a group of “integrators” and “aggregators” capable of seamlessly stitching together multiple payment systems. In this scenario, payment systems are more fragmented than today, but can foster innovation and specialization, allowing diverse solutions to coexist and meet niche market needs.
Scenario B: Upgraded Fragmentation, Global Standards Eroded
If global trade and commerce continue to face major challenges and geopolitical tensions intensify, countries may increasingly rely on local and regional alliances, gradually detaching from global flows of goods, services, and people. This scenario arises when the world fails to build a framework for “global systems” and “local systems” to coexist. Payments will inevitably become more regionalized.
Countries and regions will prioritize resilience and self-sufficiency, leading to more bilateral agreements, intermediary currencies, and alternative payment systems, moving further away from global standards. Over time, regional systems and payment tools will dominate use cases, fundamentally reshaping the financial landscape. International connectivity will become more difficult, deeply impacting payment tech stacks, especially for institutions operating across multiple countries and globally. This may accelerate the adoption of Stablecoin and tokenized money.
Although international connectivity is smoother in the first scenario, both mean the previously unified global payments map will become more fragmented and complex, with solutions increasingly localized. For businesses and financial institutions, adapting to this new reality requires flexibility, innovation, and a deep understanding of the forces driving money flows.
2.2 Accelerated Adoption of Stablecoin and Tokenized Money
Stablecoin and tokenized money are becoming increasingly important components of the financial system, though they have not yet crossed the threshold of widespread adoption. The industry is expanding rapidly—Stablecoin Issued Amount has doubled since early 2024—but their share of the global daily payment volume, which reaches trillions of dollars, remains limited: current daily volume is about $30 billion.
Multiple signals indicate Stablecoin is approaching a “breakthrough” moment. The primary factor is increasingly clear regulatory rules: the US (recently passed GENIUS Act), EU, UK, Hong Kong, and Japan have all introduced or improved regulatory frameworks, clarifying licensing, reserve management, anti-money laundering, and customer due diligence requirements. Whether cross-regional frameworks can align will determine if cross-border Stablecoin business can succeed; clearer rules lower entry barriers, especially benefiting traditional financial institutions and boosting market confidence in Stablecoin.
Technical infrastructure is also rapidly improving: by moving transaction processing from Mainnet to more scalable Layer 2s and adopting more efficient Consensus protocols, throughput continues to rise; user-facing digital wallets and bank-grade custody solutions are increasingly reliable and accessible; advanced on-chain analytics tools enhance security and Compliance.
More compelling drivers come from real-world use cases. While Stablecoin was initially popular only in niche areas like crypto asset Trade Settlement, its potential is now recognized in broader scenarios: tokenized deposits allow customers to earn Interest intra-day and keep funds Available at all times; Stablecoin can provide “24/7” Real Time Settlement, replacing traditional correspondent banking networks; in regions with volatile local currencies, Stablecoin pegged to major global currencies can help consumers hedge Fluctuation. Institutional use cases are emerging, such as B2B treasury management, supply chain finance, and repo agreements. Additionally, Stablecoin’s “programmable” features can enable new scenarios, including solving custody challenges and restricting government benefits to specific spending categories.
Over the past 18 months, numerous high-profile announcements, partnerships, and acquisitions show the industry is fully committed to capturing the value of tokenized Assets. However, widespread adoption also brings risks that must be carefully managed. Although major market regulation is becoming clearer, the world still lacks a unified, coherent regulatory framework, which could cause uncertainty or market disruption. If an issuer’s reserves are insufficient, Stablecoin may lose its peg, causing a collapse in trust; if a leading Stablecoin fails, the shock could spread to the broader financial system.
Moreover, for Stablecoin to truly go mainstream, end users must shift from seeing it as just a Fiat Swap bridge to being willing to hold it long-term. If most customers keep funds in Stablecoin, traditional banks’ deposit funding sources and revenue models will be upended.
The rise of Stablecoin is also in sync with the “multi-rail payments” trend—for example, merchant acquirers now support card, A2A transfers, and Stablecoin in unified solutions. Leading companies have taken major steps: PayPal now accepts multiple digital asset payments; Coinbase has launched debit cards linked to Stablecoin, with credit card products coming soon. Other service providers wanting to meet customer Stablecoin needs must decide whether to build capabilities in-house or partner with aggregators and integrators.
III. Paths Forward for Payment Participants
As the global payments map is reconfigured into a “mosaic” of diverse rails, digital Assets, and intelligent affiliate agents, industry participants face many possible paths.
This chapter breaks down the key choices facing payment institutions, merchants, platform providers, and solution experts, exploring how each niche can position itself, innovate continuously, and capture value in an increasingly “decentralized, programmable, Real Time” environment.
3.1 Payment Providers: Competing for Brand and Trust
As affiliate agents begin to dominate more consumer journeys, traditional competition based on “product differentiation + user experience” may lose effectiveness. Convenience and personalization will become basic requirements, and the main battleground will shift to “brand trust and relationships”—whoever controls the interaction interface (direct or embedded) will be able to influence consumer decisions in a sticky, hard-to-replace way.
At the same time, new rails, Stablecoin, and programmable money will rewrite the economic model of consumer payments. Intelligent agents optimizing “when and how to pay” for consumers may squeeze interchange revenue and Interest spreads, putting pressure on local/regional players and challenging the dominance of global giants. Large institutions and solution experts that have long profited from “Settlement, credit, and Liquidity inefficiency” must reinvent their value proposition to avoid being disintermediated by smaller players and customers.
The ultimate winners will be those who build intelligent, embedded, secure, and emotionally resonant experiences around “agent-driven journeys”: not only anticipating needs and translating complex technology into intuitive experiences, but also providing explainability and aligning deeply with brand trust commitments.
Countries’ focus on “payment sovereignty” and local solutions will benefit local/regional players and limit global players. Local institutions can become “trust anchors” for domestic ecosystems (Real Time payments, identification layers, Central Bank digital currency platforms), driving interoperability, connecting networks, and complying with local policies; regional players (like Europe’s Wero, Brazil’s Pix) can lead economic blocs by setting cross-border payment, digital identification, and data governance rules. Global players may shift to more flexible, open architectures to accommodate jurisdictional differences; in some markets, they may consider partnering with emerging regional companies to fill gaps in brand recognition and trust.
3.2 Merchants: Using Payment Methods to Retain Customers
With rising consumer expectations, merchants must provide seamless, scalable experiences covering diverse payment methods, channels, and Compliance requirements. Affiliate agents increasingly control demand, forcing merchants to acquire customers in new ways and meet new standards in “payment orchestration, smart checkout, and personalized offers.”
Merchant payment service providers must upgrade from “supporting acquiring” to “providing autonomous payment infrastructure”: smart routing, Real Time Settlement, Auto Compliance, and dynamic currency optimization will become default features. The biggest opportunity is to build an “empowered commerce layer” that helps merchants acquire, convert, and retain customers across channels and regions. This layer includes acquiring services and drives deeper integration of merchant SaaS and payments. First movers can turn the complexity of “regional rails + tokenized money” into a competitive advantage through programmable APIs and embedded services.
3.3 Platform Providers: Empowering the Ecosystem
Large multi-product platforms spanning the value chain and multiple payment rails have a natural advantage in upgrading with AI and programmable money, helping traditional clients like banks accelerate innovation. Their business breadth allows them to orchestrate complete end-customer journeys and serve as the “control layer” for affiliate agents and programmable finance. Rich data resources further fuel large-scale decision-making and personalization.
However, many platforms are “broad but shallow,” lagging experts in specific functions. Blindly adding all-in-one new features may widen the gap with specialists, pushing customers to seek “best-of-breed” solutions elsewhere.
Therefore, platforms must clarify strategic priorities, decide where to invest resources, and effectively deploy new technology for different customer groups (banks, merchants, enterprises, individuals). With R&D and developer ecosystems, large platforms can maintain innovation leadership in specific service areas.
3.4 Solution Experts: Unlocking Niche Value
Specialist participants—such as cross-border payment experts, single-rail acquirers, and payables/receivables automation providers—face both opportunities and risks. Fragmentation in payment systems creates many edge cases and niche segments, ideal for “point solutions” to thrive; however, the rise of agent-driven workflows and programmable money may commoditize functions lacking unique intelligence, depth, or leverage.
Thus, experts must focus on complex, high-value use cases and deeply embed their capabilities into platforms and agent ecosystems; they must adapt to regional differences while retaining the ability to orchestrate larger workflows across rails and segments.
Examples of specific paths:
Transform cross-border payment systems into “embedded engines,” allowing platforms or agents to dynamically route based on Real Time Trading Fee rates, forex Fluctuation, and Settlement timing, and deeply integrate with programmable wallets for optimal cash movement across currencies and rails.
Upgrade KYC/KYB rules engines into “programmable trust layers,” enabling agent systems to Auto-adjust onboarding processes based on transaction type, jurisdiction, and customer profile for intelligent and differentiated onboarding.
IV. Six Strategies to Thrive in the Next Era of Payments
Facing the “intelligent, programmable, interconnected” new era of payments, participants can adopt six core strategies to capture new value.
Design for “Intelligent Simplicity”
As consumers and businesses increasingly rely on agents and automation, trust and adoption hinge on “keeping complexity internal, delivering simplicity to customers.” Products must embed simplicity, transparency, and personalization at their core, allowing users to maintain full control of funds with effortless operation.
Treat Interoperability as Infrastructure
Cross-border, multi-rail transactions will be the norm for the foreseeable future. The ability to bridge different asset types, jurisdictions, and Compliance regimes in Real Time is no longer a differentiator, but an “entry ticket.” Participants must build resilient infrastructure natively supporting these needs.
Push Intelligence to the Edge
Decisions must be made at the moment of transaction, within the agent, and inside programmable contracts. Routing logic, fraud detection, and Liquidity management should be directly embedded in software agents, APIs, and workflows, not reliant on centralized batch processing or manual approval.
Make Compliance Programmable
With increasingly fragmented regulation, those who can “code local Compliance” will scale. Modular policy engines and regional logic will replace manual processes and hard-coded rulebooks, enabling “one-click adaptation” to global Compliance.
Integrate with the Ecosystem, Not Compete Against It
In a modular, programmable world, victory belongs to those who are “used as a foundation” by others—whether for intelligence, trust, Liquidity, or connectivity. Independent moats will erode; roles embedded in larger ecosystems will endure.
Build Trust “Upstream”
As AI and automation become transaction initiators, companies must design transparency, explainability, and error tracing into systems, so users and regulators can always know “what happened and why,” winning trust “before the transaction.”
V. Conclusion
The payments industry is not just adapting to new technology or market changes—it is fundamentally reshaping its infrastructure in response to geopolitical forces, emerging digital paradigms, and the accelerating pace of artificial intelligence. In this fragmented yet interconnected future, the key to success is a commitment to seamless interoperability across diverse payment rails and a proactive embrace of complexity.
In the coming years, those who can turn challenges into opportunities and carve new paths in a world where agility, innovation, and trust are the most valuable assets will reap substantial rewards.
