The spread of COVID-19 is having a catastrophic impact on society and industry worldwide. Companies and industries, including the financial services sector, have taken immediate action, including a shift to remote working to protect customers and employees.
This must be followed, says McKinsey, by a focus by all those involved with the transactions infrastructure on the stability an security of systems for payments and securities.
As yet, there has been no cause for concern - McKinsey reports payment systems to have been resilient and no major outages of core infrastructure to have occured. It was also noted that global payment systems retain high levels of trust from users.
The coronavirus-driven lockdown, which has seen a shift to remote-working at an unprecedented scale, continues. Globally, it is anticipated that quarterly GDP in the second quarter of 2020 could decrease by up to 40% - similar is predicted for the payment industry's financial outlook.
However, according to McKinsey, the stability of the payment sector will play a vital role in eventually rebooting the global economy. With this in mind, the consulting firm set out how the payments industry should adapt to the "new normal" and proposed several fundamental changes to required in the payments ecosystem.
McKinsey expects revenue growth in global payments to turn negative. It explains: "Instead of growing by 6%, as projected by our 2019 global payments report, activity could drop by as much as 8% to 10% of total revenues, or a reduction of $165bn to $210bn."
This drop, it added, is comparable to the 11% decrease in revenue experienced during the 2008-2009 financial crisis.
In particular, it is revealed that:
In light of this changing environment, and to play the crucial role on kick-starting the economy that McKinsey suggests, payments companies should consider adjusting their portfolio, adapting their operating models and focusing on supporting customers.
The latter, it states, should be delivered so as to both "maintain essential liquidity through the crisis and to accelerate the restart of business".
Read McKinsey's full breakdown of how payments must adapt to the challenges of coronavirus here.
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