Payment Processor Market

Global Payment Processor Market Size

The global payment processor market is estimated to exhibit a CAGR of 10.3% from 2023 to 2028. With expanding digitization across the globe, the payment processing industry has emerged as a crucial element of the global economy. As a result, market players continue to provide advanced solution to facilitate the safe transfer of payments between buyers and sellers both online and offline in addition to providing a range of value-added services to their customers. The abundance of options and the continual advancement of technology in the payment processing space has resulted in the significant growth of payment processor market.

The payments sector is continuously evolving to meet the demands of both businesses and customers, and success in this dynamic environment depends on staying up to date on the most recent developments.

The financial institutions have played a crucial role in the success of this market by accelerating and advancing digital payment mode. Advent of digital payment has effectively bridged the gap between businesses and customers, enabling smooth and secure transactions. As a result, payment processors continue to enhance their service offering to keep pace with the shifting demands of businesses and customers.

Also, the popularity of mobile payments is anticipated to grow remarkably in the payments sector. Worldwide adoption of mobile payment apps like PayPal, PayU, Apple pay, and Alipay is rising because they provide a quick and safe way to do business while on the go. The merchants that accept mobile payments can reach a larger clientele and offer a smooth purchasing experience across many channels.

As security technology advance, new security service provider options are becoming available in these apps. In order to fully capitalize the immense potential for e-wallet products and services, market players need to develop a knowledgeable and comprehensive approach.

As a result, the financial institutions are engaged in R&D of cutting-edge fraud detection and prevention technology to offer cutting-edge payment solutions, strengthening transaction security, and investigating partnerships with fintech firms. This strategic alliance between financial institutions and fintech firms is anticipated to greatly favor the market growth during the forecast period.

Global Payment Processor Market: By Method

The credit card segment accounted for the largest revenue share in 2022 market. Companies are frequently embracing credit card processing solutions owing to its ability to integrate key company information, such as orders, shipping and invoicing, and inventory level, with their enterprise resource planning (ERP) systems, allowing their operations to run more smoothly.

Moreover, penetration of credit card in terms of usage and availability is increasing notably across the globe. Out of all the credit card networks, Visa is the most commonly used credit card network. Until the second quarter of 2022, there were 369 million Visa credit cards issued in the United States, and 865 million worldwide. This depicts the widespread usage of credit card as alternative payment mode.

However, e-wallet is expected to grow at the lucrative CAGR during the forecast period. Post COVID-19 pandemic, the use of e-wallets has skyrocketed in terms of usage. By 2020, digital wallets were recognized to surpass other payment methods such as credit cards, debit cards, bank transfers, and cash; for e-commerce and point-of sale payments. This trend is expected to continue in the coming years.

E-wallets are being quickly adopted by everyone, including consumers and businesses, expanding market access for new goods and services. E-wallet apps are gaining great traction among consumers given its accessibility and ease. This has eliminated the requirement for in-person account opening and created seamless P2P payment possibilities, simplifying many of the complexity of traditional financial services. Moreover, innovative in-app services can be offered by digital wallets for any unmet consumer or merchant demand.

Global Payment Processor Market: By Region

North America captured the maximum revenue share in the 2022 payment processor market. The increasing acceptance of digital payment solutions across North America merchants coupled with presence of a substantial technology providers has contributed to the dominance of this region. Furthermore, the market players continue to invest heavily for innovation and new product developments in the U.S. market.

For instance, in February 2022, Apple, Inc. introduced Tap to Pay on iPhone. This will allow U.S.-based merchants including small businesses to large retailers to use their iPhone for seamless and secured acceptance of Apple Pay, contactless credit and debit cards, and other digital wallets through a tap to their iPhone. This is expected to greatly benefit the U.S. payment processor market in the coming years. More than 90% of U.S. merchants already accept Apple Pay, and with this new feature, almost every company, large or small, will be able to let customers use iPhone Tap to Pay.

On the other hand, Asia Pacific market is anticipated to grow at the fastest CAGR during the forecast period. The expanding IT infrastructure across the Asian countries has accelerated the adoption of smartphones and internet services, thereby spurring the adoption of alternative payment methods, such as e-wallets and bank transfers.

In July 2023, Payment Asia, a payment solutions provider, launched first AI-powered comprehensive processing service. This service comprises automated merchant onboarding and account assignment, AI customer assistance, and an auto accounting system. With this, Payment Asia became the first company in the country to offer comprehensive suite of automated payment services.

Global Payment Processor Market Share and Competitor Analysis

Adyen, Alipay, Amazon Payments, Inc., Authorize.Net, Due Inc., PayPal Holdings Inc., PayU, SecurePay, Stripe, Inc., Apple Inc. (Apple Pay), and Alphabet (Google Pay), among others are some of the key players operating in the global payment processor market.

Please note: This is not an exhaustive list of companies profiled in the report.

With growing popularity of digital payment processing solutions across the globe, the market is anticipated to witness several new market entries. For instance, in May 2023, Finix commenced its operation as a payment’s processor. With this, the company is directly linked to all major U.S. card networks including Discover, Visa, Mastercard, and American Express.