During the projected period, the worldwide payment processing solutions market is estimated to rise at a CAGR of 10.2 percent, from USD 74.4 billion in 2020 to USD 120.7 billion in 2025. Several reasons have contributed to the expansion of the payment processing solutions industry, including increased eCommerce sales and increased internet penetration, global use of contactless payments, and changing customer expectations.
Impact of COVID-19 on Payment Processing Solutions
Several major payment processing companies are creating new products to meet the increased demand for contactless transactions during the COVID-19 pandemic. AliPay, for example, established a post-COVID-19 effort that uses mini-programs to enable contactless payments in third-party apps. Furthermore, despite many shops’ logistical difficulties, eCommerce sales have surged globally since the lockdown, particularly for grocery and health products. Since the COVID-19 epidemic, for example, online retail order volumes have increased by almost 200 percent on several products in the United Kingdom.
Market Trends in Payment Processing
Increased eCommerce sales, as well as increased internet penetration, are driving factors.
Internet connectivity has spread to every corner of the globe, resulting in a surge in the online shopping business. Smartphones have also become an indispensable element of many people’s lives in the twenty-first century. The rapid adoption of technology, which is led by the increasing usage of devices such as smartphones and tablets, as well as access to the internet via 4G, 5G, and other technologies, is propelling eCommerce forward. The adoption of ePayments is aided by the ongoing acceleration of eCommerce, which provides considerable benefits. ePayments make it easier to avoid the time-consuming and costly practise of physically collecting cash for an online purchase or sale. Furthermore, advancements in ePayments can make the process of making payments and other financial services more convenient, thereby expanding eCommerce opportunities. As a result, increased eCommerce sales are likely to have a beneficial impact on the payment processing solutions market’s growth.
Customer expectations are changing, thus there are some constraints.
Because of its qualities of technological innovation, immediacy, and security, digital currencies are emerging in the global payments system and are likely to disrupt the entire ecosystem of investments and monetary finance. Customer insights gained through digital payments are expected to aid firms in developing future strategies. The transaction data collected through digital payments offers merchants with clear customer insights and aids in the improvement of several elements of their business, such as marketing, promotions, and customer service decisions. Retailers are also incorporating new technology into their checkout settings, such as digital wallets and contactless payments, to make the process easier for their customers.
Rising financial inclusion around the world is an opportunity.
Payment services are critical to a country’s economic development. With digitization and ongoing technical advancements, this technology can progressively provide consumers and organisations with a variety of personalised, convenient, and flexible transaction options. Financial inclusion, budgeting, and activities to prevent and combat economic crime can all be aided by digital payments.
Governments understand that the usage of digital payments is rapidly increasing, and they want to ensure that everyone has access to the ability to pay for products and services in this manner. As a result, numerous initiatives are being implemented, which have already aided in making digital payments simpler, faster, and less expensive.
Threat of escalating cyberattacks on digital payment methods is a challenge.
The changing nature of cyberattacks is projected to have an impact on market growth. Cyberattacks are a significant impediment to the widespread use of digital payment solutions. It is one of the most pressing issues that the payment industry is currently confronted with. Embracing payment technologies and integrating them into businesses has increased the risks and concerns about data privacy, information theft, and regulatory compliance. Businesses are being harmed by new and growing cyberattacks that use mobile malware to sneak into payment systems and steal cardholder data. Friendly fraud, affiliate fraud, botnets, phishing, velocity attacks, and triangulation are all evolving sorts of fraud.
During the projected period, the credit card segment will have the greatest market size.
A credit card is a payment card that allows users (cardholders) to pay a merchant for products and services and pay them for the amounts as well as the extra charges that have been agreed upon. The card issuer (typically a bank) opens a revolving account for the cardholder and extends a line of credit, which the cardholder can use to pay a merchant or get a cash advance. Consumers can use a credit card to establish a long-term debt load that is susceptible to interest charges.
During the forecast period, Asia Pacific will have the greatest market size.
In all facets of their digital payment transactions, APAC customers prefer equal amounts of seamlessness and security. The region’s booming retail market has prompted global payment processing solution providers to concentrate their efforts in this area in order to deliver improved services. China, India, Indonesia, and Malaysia are some of the region’s fastest-growing economies, with a huge number of daily mobile transactions. This has compelled the national governments to place a greater emphasis on consumer-friendly payment alternatives. According to the GSMA’s study The Mobile Economy Asia Pacific 2019, mobile technology and services accounted for 5.3 percent of APAC’s total GDP in 2018. According to the survey, by the end of 2018, 1.9 billion individuals in the region were linked to mobile internet, with 200 million new customers compared to the previous year. By 2025, two-thirds of new users are predicted to come from India and China, according to the report.
Players on the Market
PayPal (US), Fiserv (US), Global Payments (US), FIS (US), Square (US), Stripe (US), MasterCard (US), Visa (US), Dwolla (US), ACI Worldwide (US), Adyen (Netherlands), Paysafe (UK), Jack Henry & Associates (US), Wirecard (Germany), and PayU are some of the major players in the payment processing solutions market (Netherlands).