Payment Processing Solutions Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2024 - 2030)

Payment Processing Solutions Market Trends and Growth Drivers

Rise of Contactless Payments Is Key Trend for Market

• The COVID-19 pandemic has significantly expedited the rise of contactless payments, making it a key trend in the payment processing solutions market.
• The popularity of contactless payment systems, such as cards with near-field communication (NFC) capability and mobile payment apps, has been fueled by the demand for convenience and hygiene.
• These methods allow consumers to complete transactions by simply tapping their card or smartphone near a payment terminal, eliminating the need for physical contact.
• Contactless payment technology makes transactions fast and seamless, which is especially convenient in busy retail settings where speed is crucial.
• According to Barclay, 93.4% of all in-store card transactions up to GBP 100 were made with ‘touch and pay’ in 2023.
• Contactless payment technology has been implemented by major retail chains, such as Walmart, Tesco, and Carrefour, throughout their stores.
• In order to improve customer convenience and security, Walmart introduced Walmart Pay, a mobile wallet that accepts contactless payments.
• Tesco and Carrefour have also introduced contactless payment options at checkout to satisfy customers' growing need for speedy, touchless transactions.

Increasing Internet Penetration Is Major Driver for Market

• The market for payment processing solutions is being driven by the increasing global adoption of the internet, which is revolutionizing the way people conduct financial transactions.
• A growing portion of the population is becoming able to conduct online activities, such as banking and shopping, as internet connectivity increases, especially in developing countries.
• As of April 2024, the Netherlands, Switzerland, and Norway led the world in internet penetration rates, all recording 99%.
• This near-universal internet access in these countries underscores their advanced digital infrastructure and widespread adoption of technology.
• With a global average of 67.1%, more than two-thirds of the population on the world can now use the internet.
• This marks a significant milestone in global connectivity, driven by the proliferation of mobile internet, affordable smartphones, and efforts to expand broadband access.
• Consumer innovations and behaviors seen in these areas have an impact on international payment solution providers, influencing global standards for security, product development, and user experience improvements.

Cybersecurity Threat Is Major Challenge for Market

• risks are a significant obstacle for the global market for payment processing solutions.
• Because payment processing systems hold private financial data, hackers looking to steal information or interfere with business operations find them to be lucrative targets.
• Reports indicate that in February 2023, the Indian BFSI sector suffered a staggering 140 million cyberattacks.
• These risks include data breaches that reveal personal information and credit card numbers, which can result in large financial losses, legal repercussions, and harm to a company's brand.
• Furthermore, the prevalence of online fraud schemes, including identity theft and phishing, emphasizes the necessity for strong cybersecurity defenses against fraudulent and illegal transactions.
• To effectively tackle these difficulties, payment processors need to give top priority to investing in advanced security technologies, enact stringent compliance standards, and improve cybersecurity awareness and education for employees as well as customers.

Payment Processing Solutions Market Analysis

Payment Method Analysis

• The e-wallet category is expected to witness the fastest growth, advancing at a CAGR of over 25.0%, during 2024–2030.
• 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 were around 4.88 billion smartphone users, which contribute to more than 60.42% 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.
• The credit card category is the largest, with a market share of 40%, in 2024 due to the increase in preference for cash alternatives and the availability of several affordable credit cards.
• Additionally, 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.
• Moreover, according to the Federal Reserve, 82% of U.S. adults had a credit card in 2022. About 73% of the Americans have a credit card by age 25, making credit cards the most common first credit experience for young adults.

The payment methods analyzed in this report are:

• Credit Card (Largest Category)
• Debit Card
• E-Wallet (Fastest-Growing Category)
• Others

Deployment Analysis

• The cloud-based category accounts for a larger revenue share, of around 65%, in 2024, and it is expected to be the faster-growing with a CAGR of 25.5% in the forecast period.
• 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, the demand has shown a sudden boom, owing to the high adoption of contactless payments for goods and services.
• Moreover, the pay-as-you-go or subscription-based business models of cloud-based solutions lower the initial capital costs related to purchasing and maintaining hardware.
• By matching operating costs to actual utilization, this economical method maximizes financial resources for companies of all sizes.

The deployments analyzed in this report are:

• On-Premises
• Cloud-Based (Larger and Faster-Growing Category)

End Use Analysis

• The banking, financial services, and insurance (BFSI) category is expected to hold the largest share, of around 35%, in 2024.
• This is because 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 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.
• Additionally, favorable policies and several initiatives taken by governments and organizations to support the payment processing solutions are set to drive the market growth.
• The Consumer Data Right (CDR) laws were adopted by the Australian government in 2023.
• The CDR gives customers more power by enabling them to safely share their financial and banking information with reputable third parties of their choice.
• The goal of this program is to encourage innovation and competition in financial services, particularly in payment processing technologies.
• The retail and e-commerce category is expected to progress with the highest CAGR, around 25.4%, during 2024–2030.
• 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.

The end uses analyzed in this report are:

• Government and Utilities
• BFSI (Largest Category)
• Telecom and IT
• Healthcare
• Real Estate
• Retail and E-Commerce (Fastest-Growing Category)
• Travel and Hospitality
• Others

Geographical Analysis

• The APAC region will hold the largest market share, of 45%, in 2024 and it is expected to advance at the highest CAGR during 2024–2030. 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, UPI has put India at the forefront of real-time payment transactions worldwide and accrued around 260 million users to date.
• Additionally, government institutions in the region are adopting various advanced payment processing solutions, which are further flourishing the market growth.
• The rising number of daily transactions in countries like India, China, and South Korea is further thriving the market growth in APAC.
• For instance, in a 2023 survey conducted in South Korea, Naver Pay emerged as the most widely used mobile payment service, capturing approximately 20% of the market. Samsung Pay and Kakao Pay followed, with usage rates of around 13% and 10%, respectively.
• Moreover, the growth of the e-commerce industry, coupled with supportive government initiatives, is also driving the regional market growth.
• North America will hold the second-largest market share, on account of the rising adoption of digital payment solutions and the surging adoption of eWallets in the region.
• For instance, 53% of Americans use digital wallets more than traditional payment methods such as paying with cash or swiping a physical debit or credit card.
• Furthermore, consumers mainly prefer making payments through credit cards both online as well as through point-of-sale methods in North America.

The regions and countries analyzed in this report are:

• North America
  • U.S. (Larger Country Market)
  • Canada (Faster-Growing Country Market)
• Europe
  • U.K. (Largest Country Market)
  • Germany (Fastest-Growing Country Market)
  • France
  • Spain
  • Italy
  • Rest of Europe
• Asia-Pacific (APAC) (Largest and Fastest-Growing Region)
  • China (Largest Country Market)
  • India (Fastest-Growing Country Market)
  • Japan
  • Indonesia
  • South Korea
  • Rest of APAC
• Latin America (LATAM)
  • Brazil (Largest Country Market)
  • Mexico (Fastest-Growing Country Market)
  • Rest of LATAM
• Middle East and Africa (MEA)
  • Saudi Arabia (Largest Country Market)
  • South Africa (Fastest-Growing Country Market)
  • Rest of MEA

Payment Processing Solutions Market Share

The payment processing solutions market is fragmented in nature due to the presence of both large and local players. This fragmentation is also driven by varying regional regulatory requirements, differing consumer preferences, the rapid pace of technological advancements, and the increasing demand for customized solutions. Additionally, the market is influenced by the emergence of new fintech companies, the integration of innovative payment methods such as cryptocurrencies, and the continuous evolution of mobile payment platforms, all of which contribute to a competitive landscape.

Payment Processing Solutions Market News

• In September 2023, ACI Worldwide Inc. unveiled end-to-end digital central infrastructure solution
• In June 2023, Visa Inc. agreed to acquire Brazilian issuer processor and core banking platform Pismo for USD 1 billion in cash.
• In June 2023, Google Workspace integrated Stripe to help businesses accept payments in Google Calendar
• In May 2023, ACI Worldwide announced its collaboration with Red Hat OpenShift, to enable financial institutions and payment providers to utilize ACI solutions on the platform.
• In April 2023, PayPal Holdings Inc. introduced new features to its comprehensive payment solution for small businesses. The enhanced solution offers customers a range of payment options, including PayPal, PayPal Pay Later, and Venmo.