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.
| Report Attribute | Details |
Historical Years | 2017-2021 |
Forecast Years | 2022-2030 |
Market Size in 2021 | $90.4 Billion |
Revenue Forecast in 2030 | $569.2 Billion |
Growth Rate | 22.7% CAGR |
Report Scope | Market Trends, Drivers, and Restraints; Revenue Estimation and Forecast; Segmentation Analysis; Regulatory Scenario; Impact of COVID-19; Companies’ Strategic Developments; Market Share Analysis of Key Players; Company Profiling |
Segments Covered | By Payment Method; By Deployment; By End Use; By Region |
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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
The global payment processing solutions market is experiencing significant growth and is expected to reach $569.2 billion by 2030, with a compound annual growth rate (CAGR) of 22.7% during the period of 2021-2030. This growth can be attributed to several factors, including the increasing popularity of e-commerce, the rise in internet penetration, and the widespread use of smartphones [[1]].
The eWallet category is expected to witness the fastest growth within the payment processing solutions market, with a projected CAGR of over 23% during the period of 2021-2030. This growth is driven by the increasing adoption of e-wallets, fueled by the rising penetration of laptops and smartphones worldwide. The availability of e-commerce platforms and rising investments also contribute to the growth of this category [[2]].
The credit card category is expected to record the second-highest CAGR in the forecast period. This is due to the preference for cash alternatives and the availability of affordable credit cards. Companies offering credit cards attract new customers by providing cashback, benefit points, and rewards, which further drives the growth of this category. In the United States, more than 70% of the population carries a credit card, with around 35% of them having more than three cards [[2]].
Cloud-based payment solutions dominate the market, accounting for a larger revenue share of around 60% in 2021. Cloud-based solutions offer benefits such as full-time integration, complete security, high speed, and improved scaling compared to on-premises solutions. The low cost and low risk associated with cloud-based payments have enabled financial institutions to remain competitive in the digitalized era. The demand for cloud-based payment solutions has increased significantly since the COVID-19 pandemic, driven by the high adoption of contactless payments for goods and services [[3]].
The banking, financial services, and insurance (BFSI) sector is the largest user of payment processing solutions, expected to hold a share of around 25% in 2030. Payment processing solutions are highly popular in the BFSI sector as they streamline banking processes, eliminate paperwork, and facilitate routine transactions such as transfers, payments, liquidity management, and payroll processing. The adoption of advanced payment processing solutions by fintech firms and banks further drives the market growth in this sector. Collaborations between banks and payment processing solution providers also accelerate the adoption of request-to-pay services [[4]].
The Asia-Pacific (APAC) region leads the payment processing solutions market, generating the largest revenue of around $40 billion in 2021. The APAC market is expected to grow at the fastest CAGR during 2021-2030. The region's growth is attributed to the increasing adoption of smartphones, rising internet services, and the surging adoption of cards and eWallets. Government institutions in the region are also adopting advanced payment processing solutions, further fueling market growth. Countries like India, China, and South Korea have reported a significant number of daily transactions, driven by the growth of the e-commerce industry and supportive government initiatives [[5]].
North America holds the second-largest market share, accounting for around 25% in 2021. The region's market growth is driven by the rising adoption of digital payment solutions and the increasing use of eWallets. Credit cards are preferred by consumers for online payments and point-of-sale transactions in North America. For example, the United States had around 1.1 billion credit card users in 2021 [[5]].
In recent years, key players in the payment processing solutions market have launched new products to enhance their market position. For instance, Fiserv Inc. launched Clover, an online ordering and delivery platform for restaurants, providing flexible food delivery services. PayPal Holdings Inc. introduced the Zettle Terminal, a point-of-sale solution that offers high in-store mobility for small businesses [[6]].
In summary, the global payment processing solutions market is experiencing significant growth, driven by factors such as the increasing popularity of e-commerce, rising internet penetration, and the widespread use of smartphones. The eWallet category is expected to witness the fastest growth, followed by the credit card category. Cloud-based payment solutions dominate the market, and the BFSI sector is the largest user of payment processing solutions. The APAC region leads the market, followed by North America. Key players in the market have been launching new products to enhance their market position [[1]][[2]][[3]][[4]][[5]][[6]].
