Digital Payment Industry Overview
The global digital payment market size is expected to reach USD 361.30 billion by 2030, expanding at a CAGR of 20.5% over the forecast period, according to a new report by Grand View Research, Inc. The market growth can be attributed to the growing volume of cashless transactions worldwide. According to PwC, a consulting company, the global volume of cashless payments is expected to increase by more than 80% between 2020 and 2025, to nearly 1.9 trillion by 2025 from nearly 1 trillion transactions in 2020. The rising demand for digital payments has encouraged several smartwatch providers to introduce enhanced smartwatches capable of making contactless payments.
Digital Payment Market Segmentation
Grand View Research has segmented the global digital payment market report based on solution, mode of payment, deployment, enterprise size, deployment, end use, and region:
Based on the Solution Insights, the market is segmented into application program interface, payment gateway, payment processing, payment security & fraud management, transaction risk management and others
The payment processing segment dominated the market in 2021 and accounted for more than 25.5% share of the global revenue.
The increasing preference for online shopping across the globe is prompting retailers to adopt payment processing solutions to provide customers with seamless checkout experiences.
Players providing payment processing solutions focus on mergers and acquisitions and partnerships to strengthen their market presence. For instance, in October 2021, PXP Financial Inc., a payment processing service provider, announced its partnership with Shift4, a payment processing solution provider.
Through this partnership, the former company expanded its capabilities in the U.S. market. The payment gateway segment is anticipated to grow at the fastest CAGR over the forecast period.
Payment gateway solutions are in demand among merchants as they enable convenient payment.
Furthermore, payment gateways are used for in-store payments to allow customers to make payments via smartphones and the internet. Thus, the growing adoption of payment gateways among the in-store retail shops drive the segment growth.
Based on the Mode of Payment Insights, the market is segmented into bank cards, digital currencies, digital wallets, net banking, point of sales and others
The point of sales segment dominated the market in 2021 and accounted for more than 52% share of the global revenue.
Point of sale systems are used by retail stores for processing transactions. These systems offer benefits, such as fast checkout options, customized customer experience, and multiple payment options.
Retailers worldwide adopt cloud-based points of sales systems to increase their efficiency and improve service effectiveness.
The net banking segment is expected to register a significant growth rate over the forecast period.
The benefits offered by net banking, including improved time efficiency, ease of banking, and activity tracking, are among the major factors driving the segment growth.
As a result, various countries across the world are witnessing an increase in net banking users. According to the statistics provided by eMarketer, approximately 80% of U.S. internet users accessed their bank accounts digitally in 2020.
Based on the Deployment Insights, the market is segmented into cloud and on-premise
The on-premise segment dominated the market in 2021 and accounted for more than 65.0% share of the global revenue.
The on-premise deployment of digital payment provides organizations with complete control over applications and systems, which can be easily managed by the organization’s IT staff.
Moreover, the increased frequency of financial frauds amid the COVID-19 pandemic is also one of the major factors driving the demand for on-premise solutions among organizations.
According to the statistics provided by Merchant Savvy, a merchant service provider, global payment fraud increased from USD 9.84 billion in 2011 to USD 32.39 billion in 2020; it is projected to reach USD 40.62 billion by 2027, a 25% increase from 2020.
The cloud segment is anticipated to grow at the highest CAGR over the forecast period. The continued rollout of smart city projects, coupled with the rising number of unmanned retail stores, is one of the major factors driving the growth of the segment.
Furthermore, efforts taken by payment companies to integrate artificial intelligence features in their payment system are expected to accentuate the segment growth.
Based on the Enterprise Size Insights, the market is segmented into large enterprises and small & medium enterprises
The large enterprise size segment dominated the market in 2021 and accounted for more than 59.0% share of the global revenue.
Large retail stores increasingly demand digital payment solutions to enable their customers to conduct payments by maintaining social distancing. Digital payment methods, such as smart banking cards, point of sales solutions, and e-wallets, are used by retailers to reduce checkout time.
Retailers are also focusing on providing innovative payment solutions for customers. For instance, in October 2020, Klarna a financial service provider, announced its partnership with Afterpay, a payment solution provider, to provide Buy Now Pay Later services for online customers.
The small & medium enterprises segment is anticipated to grow at the fastest CAGR over the forecast period.
Small & medium enterprises are shifting from paper-based invoicing to digital invoicing as paper-based billing systems are expensive, prone to errors, and inefficient.
Payment solution providers are focusing on partnerships with small & medium enterprises to support their digitalization journeys.
Based on the End-use Insights, the market is segmented into BFSI, healthcare, IT & telecom, media & entertainment, retail & e-commerce, transportation and others
The Banking, Financial Services and Insurance (BFSI) segment dominated the market in 2021 and accounted for more than 23.0% share of the global revenue.
The rising demand for digital remittance for cross-border and domestic transactions is encouraging banks to adopt digital payment solutions.
Moreover, banks are also enhancing their offerings to compete with digital payment solutions providers, such as Google, Amazon, and Facebook. For instance, in June 2019, the Bank of America introduced a digital debit card to offer improved convenience to its clients.
The retail & e-commerce segment is anticipated to register the fastest growth over the forecast period.
The growing use of mobile-based payment solutions among customers for retail payments is one of the major factors driving the segment growth.
At the same time, the rising number of unmanned retail stores worldwide is also driving the market growth.
According to a study conducted by Televisory, a financial service provider, China’s unmanned retail industry reached USD 503.25 million in 2020.
Digital Payment Regional Outlook
North America
Europe
Asia Pacific
Latin America
Middle East & Africa (MEA)
Key Companies Profile & Market Share Insights
The competitive landscape of the market is highly fragmented. Market players are focused on strategies, such as partnerships, joint ventures, product innovation, research & development, and geographical expansion to strengthen their market positions. Merchants adopt on-premise digital payment solutions due to security-related benefits, such as improved security levels and thereby increased level of customer satisfaction. Market players are focused on enhancing their product offerings to better cater to the changing needs of users and stay competitive.
Some of the prominent players in the global digital payment market are:
Aliant Payments
Aurus Inc.
Adyen
Financial Software & Systems Pvt. Ltd.
PayPal Holdings Inc.
Novatti Group Pty Ltd.
ACI Worldwide, Inc.
Global Payments Inc.
Wirecard
net
Total System Services, Inc.
Market Industry Development
October 2020: Aliant Payments announced that the CryptoBucks cryptocurrency payment mobile app powered by Aliant Payments has added XRP an open-source independent digital asset to its platform.
July 2020: ParkMobile, a parking solution provider, announced its partnership with EasyPark, a facilities service provider. Through this partnership, the former company provided contactless payments facility throughout Vancouver city.
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About Grand View Research
Grand View Research, U.S.-based market research and consulting company, provides syndicated as well as customized research reports and consulting services. Registered in California and headquartered in San Francisco, the company comprises over 425 analysts and consultants, adding more than 1200 market research reports to its vast database each year. These reports offer in-depth analysis on 46 industries across 25 major countries worldwide. With the help of an interactive market intelligence platform, Grand View Research Helps Fortune 500 companies and renowned academic institutes understand the global and regional business environment and gauge the opportunities that lie ahead.