Major banks must adapt to changes in the payments industry if they are to reverse revenue and profit declines, according to a recent report from The Boston Consulting Group (BCG).

In recent years, traditionally strong payments businesses have shown severe weakness, according to the report. Although some businesses are beginning to recover, banks must decide if current business and operating models are suited for shifting industry dynamics.

Global payments revenues, which can make up one-third to one-half of banks’ total revenues, fell at a compound annual rate of 7 percent from the end of 2008 through 2010, according to the report.

"The size of the prize is too large not to take action," said Niclas Storz, a BCG partner and a coauthor of the report. "We estimate that by 2020, the global payments market will be worth $782 trillion in noncash transaction values and $492 billion in transaction revenues."