Digital Payment Market

Digital Payments Market Size, Share, Industry Growth, Latest Trends, Analysis, Forecast

[357 Pages Report] The Digital Payment Market size as per revenue was surpassed $111.2 billion in 2023. Throughout the projection period, the digital payments industry is anticipated to increase at a CAGR of 11.8% in between 2023-2028 to reach a value around $193.7 billion in 2028.

The rise in the adoption of contactless payments will drive the market. Contactless payment technologies such as Near-Field Communication (NFC), Host Card Emulation (HCE), and Radio Frequency Identification (RFID) ensure faster transactions with the touch-and-go process. Consumers across the globe can now enjoy the ease, speed, and convenience of contactless payments for small, frequent transactions using mobiles, cards, rings, and wristbands. Contactless payments also help reduce customer queues and hassles and provide better results through higher revenue for retailers.

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Digital Payments Market Growth Dynamics

Driver: Rise of e-commerce and adoption of embedded payments platform

Online retail and e-commerce growth is driving increased demand for digital payment solutions. These digital payment methods offer convenience, security, and efficiency, making them essential for facilitating online shopping. They streamline checkout processes, support global transactions, enhance security, and play a vital role in mobile commerce (M-commerce). Additionally, digital payments provide valuable transaction data for businesses to personalize marketing and improve customer experiences. Overall, online retail and e-commerce are closely linked to the growing adoption of digital payment methods in the digital age.

Restraint: Lack of global standards for cross-border payments

Cross-border trade has seen consistent year-on-year growth, with organizations increasingly sourcing goods and services from around the world. Despite this opportunity, digital payment providers face challenges in capitalizing on this trend. The hurdles include the absence of global payment systems that offer user-friendly experiences, the absence of universal standards, and varying government regulations in different countries. Each country has its own unique payment regulations and data storage requirements, resulting in inefficiencies for cross-border payments. Furthermore, domestic payment infrastructures are often tailored for purposes other than facilitating cross-border transactions. The lack of a globally standardized framework for cross-border payments creates numerous challenges in international finance. It results in complex and inefficient processes, high transaction costs, inconsistent user experiences, compliance difficulties, limited financial inclusion, slow transaction processing, security risks, trade barriers, limited innovation, and a lack of transparency. Various initiatives are working toward establishing global standards to address these issues, but achieving consensus and widespread adoption remains a complex and ongoing process with the ultimate aim of making cross-border transactions more accessible, cost-effective, and secure worldwide.

Opportunity: Rapid decline in unbanked population across the globe

A large population across the globe lives in rural and remote regions. This population needs connectivity and digital literacy. Today, governments, development organizations, and private sector players recognize the importance of financial services for a large population living in rural and remote regions. The rapid decrease in unbanked individuals presents a significant opportunity for digital payment providers. With a larger customer base, increased adoption of digital payments, reduced reliance on cash, and support from financial inclusion initiatives, digital payment vendors can expand their market, foster innovation, and benefit from economic growth. This trend also enables them to gather valuable data, cross-sell additional services, and enhance security while contributing to financial inclusion efforts.

Challenges: Evolving cyber-attacks on digital payments

Digital payment solutions encompass many technology-driven tools and platforms that facilitate electronic transactions. These solutions enable individuals and businesses to transfer funds and conduct value exchanges without needing physical currency. Examples of digital payment solutions include mobile wallets, online banking, credit and debit card payments, peer-to-peer (P2P) transfers, and cryptocurrency transactions. They have gained popularity due to their convenience, speed, and accessibility and are employed for various purposes, including online shopping, bill settlement, fund transfers, and in-person purchases. In the digital era, these solutions have fundamentally transformed financial transactions, enhancing efficiency and security.

Digital Payment Market Ecosystem

Prominent companies in this market include a well-established, financially stable provider of the market. These companies have innovated their offerings and possess a diversified product portfolio, state-of-the-art technologies, and strong global sales and marketing networks. Prominent companies in this market include PayPal (US), Fiserv (US), FIS (US), Global Payments (US), Square (US), Stripe (US), VISA (US), Mastercard (US), Worldline (France), Adyen (Netherlands), and ACI Worldwide (US).

By Transaction Type, the domestic segment is expected to hold the largest market size during the forecast period.

A domestic digital payment solution is a specialized financial technology service designed for use within a specific country or region. These solutions are tailored to local needs, supporting the local currency and complying with regional financial regulations. They often integrate with local banks, aim for widespread adoption among consumers and businesses, and prioritize security and customer support. Transactions within a single country typically use the national currency, simplifying the process and eliminating the need for currency conversion. Moreover, domestic digital payments are generally faster and more efficient than cross-border transactions. Transaction fees are often lower for domestic payments as they do not involve international intermediaries or currency exchange costs.

By Vertical, the media & entertainment segment is expected to grow with the highest CAGR during the forecast period.

Media and entertainment are among the fastest-growing verticals worldwide, as several users access media portals and entertainment content over mobile devices. The growth of this vertical is fueled by the expansion of the smartphone market and the availability of high-speed and affordable data services. This vertical is undergoing a major transformation in the way in which media content is made accessible to customers. While print media and electronic media continue to be the prevailing traditional methods in the media and entertainment vertical, the availability of digital media content over mobile devices enabled by the internet is increasing rapidly.

By solution, the payment wallet segment is expected to grow with the highest CAGR during the forecast period.

The payment wallet segment is a vital and rapidly expanding component of the digital payment market. Payment wallets, typically accessed via mobile apps, allow users to store, manage, and conduct various financial transactions digitally. They support diverse transactions, offer security features, and can link to multiple payment methods. Payment wallets are often used for in-store and online purchases, bill payments, and peer-to-peer transfers. They contribute to financial inclusion, foster competition, and comply with financial regulations. While global players like Apple Pay and Google Pay dominate, regional providers also cater to specific markets. Payment wallets play a crucial role in modern digital finance.

Based on region, Asia Pacific is expected to have the highest growth rate during the forecast period.

Asia Pacific exhibits a notable propensity for technology adoption and is poised to achieve the highest growth rate in the market in the coming years. The Digital Payment market within the Asia Pacific region encompasses China, Japan, India, and other countries in the region. The Asia-Pacific (APAC) region is experiencing a surging demand for digital payment solutions due to several factors. Rapid economic growth, widespread smartphone adoption, a tech-savvy population, the e-commerce boom, government initiatives, international trade, urbanization, fintech innovation, and a focus on financial inclusion are all contributing to this demand. APAC's dynamic economies and the growing need for convenient and secure financial transactions are driving the adoption of digital payment methods, making the region a hotspot for digital payment innovation and expansion.

Digital Payment Companies:

The major Digital Payments companies are PayPal (US), Fiserv (US), FIS (US), Global Payments (US), Square (US), Stripe (US), VISA (US), Mastercard (US), Worldline (France), Adyen (Netherlands), ACI Worldwide (US), Temenos (Switzerland), PayU (Netherlands), Apple (US), JPMorgan Chase  (US), WEX (US), FLEETCOR (US), Aurus (US), PayTrace (US), Stax by FattMerchant (US), Verifone(US), Spreedly (US), Dwolla (US), BharatPe (India), Payset (UK), PaySend (UK), MatchMove (Singapore), Ripple (US), and EBANX (Brazil). These players have adopted various growth strategies, such as partnerships, agreements and collaborations, new product launches, product enhancements, and acquisitions to expand their footprint in the Digital Payment market.

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Scope of the Report

The study categorizes the Digital Payments Market based on offering, transaction type, and vertical at the regional and global levels.

Digital Payments Market by Offering

• Solutions
  • Payment Gateway Solutions
  • Payment Processor Solutions
  • Payment Wallet Solutions
  • Point of Sale (POS) Solutions
  • Other Solutions
• Services
  • Professional Services
    • Consulting          
    • Implementation              
    • Support and Maintenance
  • Managed Services

Digital Payment Industry By Transaction Type

• Domestic
• Cross Border

Digital Payment Industry By Payment Mode

• Cards
• ACH Transfer
• Digital Wallet
• Other Payment Modes

Market By Vertical

• BFSI
• Retail & E-commerce
• IT & ITeS
• Telecom              
• Healthcare         
• Travel & Hospitality
• Transportation & Logistics
• Media & Entertainment
• Other Verticals

Digital Payments Market By Region

• North America
  • US
  • Canada
• Europe
  • UK
  • Germany
  • Italy
  • Spain
  • France
  • Rest of Europe
• Asia Pacific
  • China
  • India
  • Japan
  • Australia & New Zealand
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • UAE
  • South Africa
  • KSA
  • Rest of MEA

Recent Developments in Digital Payments Market

• In April 2023, the new version of PayPal Payment Solution provided acceptance of PayPal payments with Apple Pay, save payment methods with PayPal Vault, and real-time account updater.
• In April 2023, Square launched Tap to Pay on Android for sellers in the UK. The new technology empowers sellers to securely accept contactless payments with a compatible Android device at no additional cost and without any need for additional hardware.
• In September 2022, the introduction of Worldpay for Platforms merged FIS' extensive merchant and banking solutions into a single platform, incorporating embedded payments technology.
• In February 2022, FIS acquired Payrix. The acquisition positioned FIS to strengthen embedded payments and finance experiences specifically tailored for small- and medium-sized businesses across diverse industries.
• In January 2022, PayPal and Salesforce extended their partnership, offering accelerated access to PayPal’s checkout solutions via the PayPal Commerce Platform to global enterprise merchants who integrate through Salesforce Payments.

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