Instead of growing by six percent, as projected by the consultancy's 2019 global payments report, activity could drop by as much as eight to 10% of total revenues, or a reduction of $165 billion to $210 billion — comparable to the 10 to 11% revenue reduction in the wake of the global financial crisis in 2008-09.

Expecting a decline in revenues, investors have already driven the share prices of payments companies into a steep decline, substantially beyond the actual profit impact expected.

McKinsey’s Global Payments Map simulations suggest that the net interest-margin component, the source of about 60% of overall payments revenues, explains only about 20% of the decline. The transaction component, the source of around 40% of revenues and the driver of the growth of payments revenues over the past few years, would be responsible for about 80% of the fall-off.

One-quarter of the total decline in revenues in the analysis is driven by cross-border payments, led by a 25 to 30% drop in cross-border C2B transactions. Cross-border business-to-business transactions have also been affected as supply chains and freight traffic are hit by the pandemic.

However, the biggest shock is likely to be felt in retail payments and merchant-services businesses. Mastercard, American Express, PayPal and Visa have already warned of slowing revenue growth due to the outbreak.

McKinsey estimates that classic point-of-sale (POS) payments volumes could drop by as much as 30 to 40% in the short term, though online sales will be less affected. Sales at restaurants and hotels and for recreation, culture, and travel have virtually collapsed. In 2018, these categories represented over 30% of EU household expenditures and an even higher percentage of POS transactions.

The gig economy—and fintech wallets based on it — is also suffering. McKinsey suggests that flows are down by 20 to 30% for some leading wallets in Asia, despite a growing number of users. Offline merchant payments and ride hailing are most affected, while online payments and food delivery are holding up.

Some payment methods are also likely to suffer more than others. Despite attempts to sterilize banknotes, the use of cash and other paper payment methods is declining, with cash withdrawals at ATM showing drastic declines. In the UK, cash usage dropped by half within days of the UK Government's imposition of a freeze on freedom of movement.

Contactless payments, on the other hand, are rising strongly, despite the overall contraction, as the perceived hygienic security is higher and banks around the world raise limits for tap-to-pay transactions at the checkout.

"One thing is clear now: there will be no return to the norms of 2019," states McKinsey. "The impact on the behavior and expectations of customers and businesses— indeed the entire fabric of the economy — will be profound."