Payment Processing Solutions Market Outlook by Payment Method (Credit Card, Debit Card, E-Wallet), Deployment (On-Premises, Cloud-Based), End Use (Government and Utilities, BFSI, Telecom and IT, Healthcare, Real Estate, Retail and E-Commerce, Travel and Hospitality) – Latest Trends, Growth Potential, and Revenue Forecast to 2030

Market Overview

The global payment processing solutions market size stood at $90.4 billion in 2021, which is expected to reach $569.2 billion by 2030, advancing at a CAGR of 22.7% during 2021–2030. This is ascribed to the rising e-commerce sales coupled with the surging internet penetration and the increasing smartphone utilization. Moreover, the rising adoption of alternative payment solutions, such as cards, e-wallets, and mobile applications, by various small, medium, and large-scale enterprises is leading to the surging growth in the market.

eWallet Category To Observe Highest Growth

The eWallet category is expected to witness the fastest growth, advancing at a CAGR of over 23%, during 2021–2030. This can be on account of the surging penetration of laptops and smartphones all over the world, which is fueling the adoption of e-wallets. In 2022, there are around 6 billion smartphone users, which contribute to more than 80% of the global population. The increasing number of e-commerce platforms coupled with rising investments all over the world is also propelling the market growth in this category. For instance, India received around $15 billion of investments from private equity-venture capital in 2021, which experienced more than five times Y-o-Y growth in comparison to the previous year.

Moreover, the credit card category is expected to record the second-highest CAGR in the forecast period, owing to the increase in preference for cash alternatives and the availability of several affordable credit cards. Also, the cashback, benefit points, and rewards offered by companies on the use of their credit cards are attracting new customers, which is thriving the growth of the market in this category. More than 70% of the U.S. population carries a credit card and around 35% of them are having more than three cards.

Cloud-Based Category Leads the Market

The cloud-based category accounted for a larger revenue share, of around 60%, in 2021. This is on account of several benefits offered by cloud-based payment solutions in comparison to on-premises payment solutions, such as full-time integration, complete security, high speed, and improved scaling. In addition, the low cost, as well as the low risk associated with the use of cloud-based payments, has enabled financial institutions to remain competitive in the digitalized era.

The need for cloud-based payment solutions has shown a steady growth before the pandemic, but since the pandemic in 2020, the demand has shown a sudden boom, owing to the high adoption of contactless payments for goods and services. Further, the trend of cloud-based payments is ubiquitous, and as per the study conducted by Mastercard Incorporated, around 80% of the people were using contactless payments in 2020.

Payment Processing Solutions Are Being Used the Most in BFSI Sector

The banking, financial services, and insurance (BFSI) category is expected to hold the largest share, of around 25%, in 2030 in the payment processing solutions market. Payment processing solutions are highly popular in the banking and finance industry, as it helps in eliminating a lot of paperwork, making banking processes quick and easy. Moreover, the solutions are also convenient for performing routine transactions such as transfers and payments, liquidity management, and payroll processing. In addition, the rising adoption of advanced payment processing solutions by fintech firms and banks also drives the market growth.

In recent times, numerous banks and payment processing solution providers are collaborating to accelerate the adoption of request-to-pay services, which will further burgeon the market growth. For instance, in March 2022, Temenos AG, a cloud banking platform, declared its collaboration with Mastercard Incorporated, which will assist the bank to expedite its adoption of request-to-pay services in the U.K. Thus, through collaborations, the adoption of these services by financial institutions will be faster, easier, and cheaper.

In addition, favorable policies and several initiatives taken by governments and organizations to support the payment processing solutions are set to drive the market growth. For instance, in July 2020, the European Central Bank started the European Payments Initiative, under a joint decision with around 16 regional banks. This initiative mainly focuses on unified payment solutions for merchants as well as customers, through the use of digital wallets and payment cards across on-premises as well as cloud-based payment.

However, the retail and e-commerce category is expected to progress with the fastest CAGR, around 24%, during 2021–2030. Vendors focus on providing personalized retail payment solutions that enable merchants to offer a variety of processing methods at the point of sale. This helps retailers improve customer experience by providing safe, simple, and efficient check-outs. In addition, the increasing use of smart devices is pushing real-time payments to take place rapidly.

APAC Is the Leader in the Market

The APAC payment processing solutions market generated the largest revenue, around $40 billion, in 2021, and it is expected to advance at a fastest CAGR during 2021–2030. This is due to the increasing adoption of smartphones, the rising internet services, and the surging adoption of cards and eWallets in the region. For instance, as per the Rapyd Financial Networks Ltd.’s report, more than 60% of the payments in Japan were done through cards and eWallets in 2020.

Also, government institutions in the region are adopting various advanced payment processing solutions, which are further flourishing the market growth. For instance, in October 2020, State Bank of India and Hindustan Unilever Limited signed a partnership to enable digital solutions for retailers of HUL. Through this partnership, the bank will provide an instant paperless overdraft facility of INR 50,000 to retailers for their billings with distributors as well as a financing facility for HUL’s distributors.

The rising number of daily transactions in countries like India, China, and South Korea is further thriving the market growth in APAC. For instance, as per the Fidelity National Information Services Inc.’s report, India reported the largest number of transactions in the region, i.e., more than 40 million transactions per day in 2020, followed by China and South Korea, which reported more than 38 million and 12 million transactions, respectively. In addition, the growth of the e-commerce industry, coupled with supportive government initiatives, is also driving the regional market growth.

Moreover, North America held the second-largest market share, of around 25%, in 2021, on account of the rising adoption of digital payment solutions and the surging adoption of eWallets in the region. Moreover, consumers mainly prefer making payments through credit cards both online as well as through point-of-sale methods in North America. For instance, there were around 1.1 billion credit card users in the U.S. in 2021.

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Recent Strategic Developments of Key Players

In recent years, players operating in the payment processing solutions market have been involved in product launches, to attain a significant position in the industry. For instance:

• In November 2021, Fiserv Inc. launched Clover, an online ordering with the delivery platform, which provides flexible food delivery services such as direct menu management, and payment processing solutions. This platform provides restaurant owners more flexibility and control over menu management, ordering, and payment processing.
• In October 2021, PayPal Holdings Inc. announced the launch of the Zettle Terminal, a POS solution that provides high in-store mobility for small businesses. The Zettle terminal carries a pre-loaded SIM card with a combination of Wi-Fi and cellular connectivity. Through this, customers can complete the checkout process at any place, whether at the floor, on the terrace, or at the point of delivery.

Key Players in the Market Are:

• PayPal Holdings Inc.
• Fiserv Inc.
• Fis Inc.
• Block Inc.
• Global Payments Inc.
• Mastercard Incorporated
• Visa Inc.
• Jack Henry & Associates Inc.
• Paysafe Ltd.
• ACI Worldwide Inc.

Market Size Breakdown by Segment

The report offers comprehensive market segmentation analysis along with the revenue estimation for the period 2017–2030.

Based on Payment Method

• Credit Card
• Debit Card
• E-Wallet

Based on Deployment

• On-Premises
• Cloud-Based

Based on End Use

• Government and Utilities
• BFSI
• Telecom and IT
• Healthcare
• Real Estate
• Retail and E-Commerce
• Travel and Hospitality

Geographical Analysis

• North America
  • U.S.
  • Canada
• Europe
  • U.K.
  • Germany
  • France
  • Spain
  • Italy
• Asia-Pacific (APAC)
  •  China
  • India
  • Japan
  • Indonesia
  • South Korea
• Latin America (LATAM)
  • Brazil
  • Mexico
• Middle East and Africa (MEA)
  • Saudi Arabia
  • South Africa