Growing digital transformation and expansion of the e-commerce sector is expected to drive the global payment processing solutions market during the forecast period.
Digitalization has surged the adoption of smartphones and online businesses and increased the need for internet services across the globe. Digitalization mandates businesses to perform business activities online to attract more consumers and gain profit. Shifting business in an online platform includes online fund transferring, which raises the demand for payment processing solutions to make financial transactions securely. Businesses across the globe are embracing technology and digitizing their operations. This has boosted the need for advanced payment processing solutions to facilitate digital transactions by providing seamless payment experiences to customers, thereby boosting the payment processing solutions market.
The rising number of online transactions is fueling the market. For instance, according to the National Informatics Centre, in 2023, India reached an 83.75 billion transaction volume performed through BHIM, UPI, and various e-wallets. The payment processing solutions help users make faster, secure, and convenient payments, which is anticipated to drive market growth. Moreover, shifting consumers’ preference toward online shopping and rising demand for secure and efficient payment processing solutions positively support the market size.
The continuous growth of the e-commerce industry is also driving the payment processing solutions market growth. The growing online business encourages consumers to shop online and requires reliable, seamless, and secure payment processing solutions for making financial transactions. This includes numerous payment methods such as digital wallets, credit/debit cards, and alternative payment options for fulfilling diverse customer preferences. Increasing demand for mobile payment methods in e-commerce fuels the payment processing solutions market growth.
US Dominates Payment Processing Solutions Market in North America
The market in the US is anticipated to expand during the forecast period due to the growing digitalization, shifting consumer preference for online shopping, and increasing demand for advanced technologies such as AL, IoT, ML, 5G, and big data analytics. For instance, in October 2023, Mastercard used AI to launch a new suite of enhanced solutions that help banks make world-class decisions and the promise of “always-on” payments. These new advanced technologies support solution providers and customers in streamlining the fund-transferring processes, which is expected to fuel the market during the forecast period.
The online payments industry has experienced substantial growth in the US due to the rapid growth of online transactions and the growing acceptance of digital payments. Expansion of the e-commerce sector in the US is creating opportunities for the market. For instance, according to The Census Bureau of the Department of Commerce, in Q3 2023, US retail e-commerce sales reached US$ 284.1 billion, an increase of 2.3% from Q2 2023. Thus, growing e-commerce sales and consumer preference for online shopping have increased the adoption of payment processing solutions such as Google Pay and Debit Cards, further boosting the market share.
Segmental Overview
Based on the component, the payment processing solutions market is segmented into solutions and services. The solutions segment recorded a larger payment processing solutions market share in 2022 and is anticipated to hold a significant revenue share during the forecast period. Based on payment method, the payment processing solutions market is segmented into card payments, digital wallets, and others. The card payments segment held the largest payment processing solutions market share in 2022, and the digital wallet segment is anticipated to record the highest CAGR during the forecast period. Based on industry vertical, the payment processing solutions market is segmented into BFSI, retail & e-commerce, government & utilities, travel & hospitality, IT & telecom, and others. The BFSI segment held the largest payment processing solutions market share in 2022, and the retail & e-commerce segment is anticipated to record the highest CAGR during the forecast period.
Market Analysis: Competitive Landscape and Key Developments
Cisco Systems, Fiserv, Mastercard, Alphabet, Visa, Stripe, FIS Global, Square, PayU, and ACI Worldwide Inc. are among the key payment processing solutions market players that are profiled in the report. Several other essential payment processing solutions market players were also analyzed for a holistic view of the market and its ecosystem. The market report provides detailed market insights to help major players strategize their growth.
- In June 2023, Amazon Web Services launched an AWS Payment Cryptography service to help service providers secure data by simplifying the implementation of cryptography operations in payment processing applications. AWS Payment Cryptography service generates keys and automates key management to streamline payment processing.
- In June 2023, Stripe partnered with Google Workspace to help consumers use Google Calendar to make paid appointment bookings. This new feature lets customers pay directly on a Google Calendar booking page.
- In May 2023, ACI Worldwide collaborated with Red Hat OpenShift to allow financial institutions and payment providers to use ACI solutions.
- In April 2023, PayPal Holdings, Inc. added new features to its payment solution used by small businesses. The new featured solutions provide a variety of payment choices to customers, such as PayPal, PayPal Pay Later, and Venmo.
- In February 2022, PayPal planned to invest in Skipify and aided the firm in introducing frictionless checkout experiences to simplify and streamline the checkout process of merchants and shoppers.
- In October 2022, Adyen partnered with Tink to launch a next-generation open banking solution. The next-generation open banking solution allows users to pay directly from their preferred banking setting.