Report Predicts Cash Usage Rebound
New research predicts the global payments sector is set for a rapid return to growth, with cash usage rebounding this year, though likely not to its full pre-pandemic levels.
The 2021 McKinsey Global Payments Report shows the payments sector experienced its first revenue reduction in 11 years during the upheavals of 2020, but forecasts a quick return to a more typical six to seven percent growth trajectory.
Cash payments worldwide declined by 16 percent last year, with McKinsey anticipating a rebound in 2021 as people become freer to return to their pre-pandemic behaviours, lockdowns lessen, and countries begin their economic recovery. However, the report suggests cash usage may not return to its previous levels, predicting around two-thirds of the decrease may be permanent.
McKinsey highlights the efforts of regulators in countries that have seen the highest reductions in cash usage to enact strategies that will ensure the continued availability of physical money and access to cash as a free and resilient payment system that serves everyone, regardless of age or financial status.
The pandemic accelerated ongoing declines in cash usage and adoption of electronic and e-commerce transaction methods… These trends are expected to outlast the pandemic.
The report also observes that non-cash transactions grew six percent from 2019 to 2020, and cross-border payments are becoming more significant, seeing a growth of 17 percent in 2020 despite the reduction in travel and trade volumes.