In the next 10 years, the growth rate of card payments in Russia will be record high, experts from the Boston Consulting Group (BCG) estimate. The company has prepared a report “Global Payment Services Market 2021: Rates for Growth” (available to Lenta.ru).
“The Russian miracle continues its triumphant march! In the next 10 years, according to our forecasts, card payments in Russia will grow at the fastest rates, while the CAGR (compound annual growth rate) will be about 12 percent for the number of transactions and 9 percent for the amount of payments, ”predicted Max Hauser, head of BCG’s digital technology practice in Russia and the CIS.
Back in 2010, Russian per capita card transaction rates were 40 times lower than that of the world leader, Norway, and now it is only one and a half times lower, he explained. In 2010, there were less than 10 card transactions per person in Russia, and by last year the level approached 300 transactions. “We expect that over the next 10 years, card payments in Russia will continue to grow at an outstripping pace, leaving behind the world’s largest economies – the United States, Great Britain, Germany – which will allow Russia to strengthen its global leadership,” Hauser said. Debit cards should show the fastest growth at the instrument level, their number has historically increased the fastest: in 2015-2020, the rate exceeded 35 percent.
As for the payments industry as a whole, it has been hit by the coronavirus much less than expected, according to BCG. The sector was able to quickly respond to the challenges of the pandemic, including with an accelerated conversion of cash payments to non-cash payments. For 2020, market revenue declined by only 2.5 percent on an annualized level and reached one and a half trillion dollars. By 2030, it should be close to three trillion dollars. In 2020-2025, the Asia-Pacific region will lead in terms of revenue growth, according to BCG.
The experts also named global trends that will dominate the payments sector in the coming years. In particular, experts expect deeper integration of payments into various platforms and services, more active participation of banks and more serious consolidation of the sector as a result of mergers and acquisitions. Also, according to experts, digital currencies of central banks (CBDC) should receive development, some should appear within the next 12 months.
At the end of August, BCG said that Russia managed to bypass the United States in digital banking: one of the 13 profitable digital banks in the world, Tinkoff, operates in the country, while in the United States there are no such organizations in principle. In Europe, there are three digital banks, and the world leader is the Asia-Pacific region, where 20 percent of the total number of such organizations operate, and 10 are included in the list of 13 profitable ones.