Payment Service Provider Market
Payment Service Provider Market (Component: Software [Payment Gateway Solutions, Payment Processing Solutions, Payment Security & Fraud Management Solutions, and PoS Solutions] and Services [Consulting Services, System Integration & Implementation Services, Support & Maintenance Services, and Managed/Outsourced Services]; Payment Channel: Digital Wallets, Token System, Net Banking, Real-time Payments, and Direct Carrier Billing; Payment Type: Customer to Customer, Customer to Business, and Business to Business; Application: Checkout/Recurring Payments and e-Commerce}; and End Use: Restaurants, Travel & Booking, Gaming, Healthcare, Retail, e-Commerce, Entertainment, BFSI, Telecommunications, and Others ) - Global Industry Analysis, Size, Share, Growth, Trends, and Forecast, 2019 - 2027
Cryptocurrency Wallets and Blockchain Technology Eliminate Third-party Transactions
Worldwide digital transactions are surging due to innovation in Fintech. Likewise, digital wallets are sweeping the payment service provider market at the lightening speed, from a revenue share of ~19% in 2019 to ~25% by 2027. Hence, companies are capitalizing on various trends in the digital wallets, such as cryptocurrency wallets and blockchain technology that have established a network of secure payments. Cryptocurrency is no more reserved for multi-million dollar brands or exclusive investors. Thus, greater transparency in transactions with the help of the blockchain technology is creating waves of innovations in the payment service provider market.
Easy accessibility of cryptocurrency wallets for startups and small-scale businesses have led to increased adoption of digital wallets. Such trends are contributing toward the growth of the payment service provider market. Innovations in digital wallets have also led to the emergence of several cryptocurrency wallet app solutions in the market for payment service providers. Thus, the blockchain technology is eliminating the need for a third-party transaction, which allows secure transactions and also lowers costs.
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Rise in e-Commerce Transactions Offers Incremental Opportunities
Once known as a prominent social networking site, Facebook has now turned into a dynamic business platform, which is enabling budding entrepreneurs and startups to take their business to the next level. Likewise, Facebook is now embracing digital payment methods that encourages customers to stay within the ecosystem. Since Facebook has upgraded its e-Commerce capabilities with the introduction of Facebook Pay, other market players in the market for payment service providers are following suit. This is evident, since the e-Commerce application segment is expected to account for ~51% share of the payment service provider market by 2027.
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Innovations in the e-Commerce sector are facilitating increased retail transactions in the payment service provider market. e-Commerce payment service providers are enabling the option of online fundraising to bolster their credibility credentials in the global landscape. As such, e-Commerce transactions help service providers gain important insights about their users, and allow them to efficiently target market strategies and other advertising efforts.
Companies Focus on NFC Apps to Overcome Limitations in Aadhaar-enabled Payments
The payment service provider market is anticipated to expand at a CAGR of ~10% during the forecast period. However, certain limitations in digital payments are hampering market growth. For instance, Asia Pacific is anticipated to lead the payment service providers market during the forecast period. India being one of the primary economies of Asia Pacific is challenged by the slow growth of Aadhaar-enabled payments in the past couple of months. Since some agents were splitting single transactions into multiple small transactions to gain more commission, several public sector banks applied limitations on the number of Aadhaar-enabled transactions that can be conducted by users. Hence, manufacturers are leveraging opportunities in Near Field Communication (NFC) -based wallet solutions in the U.K., since such transactions have increased considerably in the past few years.
The payment service provider market in Europe is expected to generate significant revenue. Thus, companies in the payment service provider market are tapping opportunities for the development of NFC apps, since contactless payments are gaining strong grounds in the U.K.
Developments in IoT and AI Drive Payment Service Provider Market
Apart from digital wallet and NFC apps, companies in the payment service provider market are tapping opportunities in international remittance. On the other hand, IoT payments are anticipated to become commonplace in the near future. Moreover, the integration of virtual voice assistants such as Alexa and Google Assistant has led to the trend of AI-powered payments using voice command. Thus, voice-activated payments are acquiring popularity worldwide. Moreover, there is a growing interest in payments involved with a connected car or a smart fridge, owing to the advantages of IoT and industry 4.0. Biometric payments are gaining traction in the market for payment service providers, as biometric features of smartphones are increasingly being used in mobile payments.
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The payment service provider market is estimated to reach a value of ~US$ 88 Bn by the end of 2027. AI-based wallet solutions are bringing about a change in the market landscape, since novel solutions help to automate routine transactions. The AI and NFC technologies are being highly publicized as a game changer in the global market.
Companies are aiming to provide a frictionless experience through increased cost savings. However, critical challenges of cybersecurity issues faced by players in the digital payment ecosystem pose as a restraint for companies. Hence, companies should focus on improving standards involved with stronger authentication and data confidentiality to avoid risks of cybersecurity.
Payment Service Provider Market: Overview
- The payment service provider market is expected to register a CAGR of ~10% between 2019 and 2027. The market is projected to be driven by rapid increase in financial inclusion specifically in developing countries. Increasing competitiveness in the Fintech industry is expected to boost the payment service provider market in the near future.
- The global payment service provider market is expected to reach ~US$ 88 Bn by 2027 from ~US$ 40 Bn in 2019. Rising adoption of smartphones and digital devices is expected to boost the growth of the market.
- The payment service provider market in Asia Pacific and Middle East & Africa is anticipated to expand at a rapid pace during the forecast period, followed by South America
- Asia Pacific remains the dominant leader in the global payment service provider market, with market size of US$ 11,878.6 Mn in year 2019, primarily due to tremendous growth in adoption of smartphones among both millennial and older population for payment. Therefore, exponential growth in smartphone device volumes is likely to drive the payment service provider market in the region.
- North America is projected to see significant growth in the global payment service provider market during the forecast period. Strong network infrastructure and increasing adoption of digital mode of payments such as wallets and token is expected to drive the consistent growth of the North America payment service provider market.
Payment Service Provider Market: Definition
- The payment service provider market report provides analysis of the global payment service provider market for the period 2017 – 2027, wherein 2018 is the base year and 2019 to 2027 is the forecast period. Data for 2017 has been included as historical information.
- The report studies the payment service provider market from the perspective of different modes of payment, applications, payment type, and payment channel. While evaluating the market size, transaction volume, and average per transaction cost has been considered while the currency exchange transaction has not been considered in the scope.
- The report analyzes the various types of transactions, payment channels, transaction value, transaction volume, and network provider market share
Asia Pacific Payment Service Provider Market: Snapshot
- Asia Pacific is seen as a new growth hub for technology driven enterprise business models, due to its high population ratio and adoption of new technologies. For the same reason, Asia Pacific is expected to see highest opportunity addition in the payment service provider market globally, with Europe being the next closest region.
Key Challenges Faced by Payment Service Provider Market Players
- Cost is the major factor, which can impact the growth of the market. Adoption of digital technology in payments has led to significant increase in cost. Costs relate to the procurement of the digital solution, installation and maintenance, system integration, and system downtime cost.
- All these costs are incurred while deploying the digital payment solution for any enterprise. These are the additional costs which an enterprise incurs. Adoption of digital payment methods is low within developing regions because of the additional cost to the business. Retailers and sellers hesitate to deploy digital payment technology to reduce the business cost.
Payment Service Provider Market Developments
- In August 2018, Visa Inc. partnered with Maxcom to provide mobile payment services in the Tanzanian market. More than 30,000 retailers and 20,000 local agents in Tanzania will be connected to mobile payments with this new partnership, thus increasing its market share.
- In September 2018, PayPal acquired iZettle, which would help PayPal to expand its in-store presence and strengthen its payments platform to help small businesses around the world
- In 2017, First Data Corporation completed the acquisition of BluePay, a provider of technology-enabled payment processing for merchants in the U.S. and Canada, and was one of the company’s largest distribution partners with a strong focus on software-enabled payments and card-not-present transactions.
Payment Service Provider Market: Company Profile Snapshot
- Visa Inc.: Founded in 1958, Visa, Inc. is a global payments technology company. It connects businesses, consumers, governments, and banks in more than 200 countries and regions, allowing them to use a digital payment system instead of checks and cash. Majorly, Visa transactions are done through merchants, acquirers, issuers, and the cardholder. The company has nearly 3.3 billion cards worldwide with over 46 million merchant locations. Visa has tied up with nearly 15,900 financial institutions.
- American Express Company: Founded in 1850, American Express Company is well known for its charge card, travelers’ check, and credit card businesses. It provides travel and expense management solutions and innovative payment solutions to individuals as well as to all sizes of businesses. The company also provides NFC specifications to support POS terminals to accept American Express cards on digital wallets to better meet the requirement of cardholders. In 2013, American Express Company re-launched its online payment platform and increased its prepaid offerings.
- PayU: Founded in 2002, PayU is the fintech and e-payments division of Prosus, which is one of the largest technology investors in the world. PayU is an online payment service provider for cross border and local payments, which develops in-house payment technology for merchants across the globe. PayU has more than 1,800 payment specialists and caters to over 300,000 merchants and millions of consumers making online payments.
- Other major players operating in the global payment service provider market and profiled in the report include
- ACI Worldwide, Inc.
- MasterCard International, Inc.
- Global Payments Direct, Inc.
- CCBill, LLC.
- Discover Financial Services (Diners Club International Ltd )
- Total System Services, Inc.
- Amazon Web Services, Inc.
- First Data Corporation
- PayPal, Inc.
- Ingenico Group.
- Companies are shifting toward advanced technology to gain competitive advantage in the payment service provider market apart from maintaining their position in the market.
Payment Service Provider Market – Scope of the Report
A new study on the global payment service provider market was published by Transparency Market Research (TMR). It presents a wealth of information on the key market dynamics including the drivers, market trends, and challenges, as well as the structure of the payment service provider market. TMR’s study offers valuable information about the payment service provider market, to illustrate how growth will discern during the forecast period 2019–2027.
Key indicators of market growth, which include value chain as well as supply chain analysis, and Compound Annual Growth Rate (CAGR), are elucidated in TMR’s study in a comprehensive manner. This data can help readers interpret the quantitative growth aspects of the payment service provider market during the forecast period.
An extensive analysis on leading market players’ business strategies has been featured in TMR’s study on the payment service provider market. This can help readers understand principal factors to foresee growth in the payment service provider market. In this study, readers can also find specific data on the qualitative and quantitative growth avenues for the payment service provider market, which will guide market players in making apt decisions in the future.
Key Questions Answered in TMR’s Payment Service Provider Market Study
- What is the scope of growth of payment service providing companies across the globe?
- What will be the Y-o-Y growth of the payment service provider market between 2019 and 2027?
- What is the influence of the changing trends in technologies on the payment service provider market?
- Will Asia Pacific continue to dominate the market for payment service provider?
- Which factors will impede the growth of the payment service provider market during the forecast period?
- Which are the leading companies in the global payment service provider market?
A unique research methodology has been utilized by TMR to conduct comprehensive research on the growth of the payment service provider market, and arrive at conclusions on the future growth prospects of the market. This research methodology is a combination of primary and secondary research, which helps analysts warrant the accuracy and reliability of the drawn conclusions.
Secondary resources referred to by analysts during the production of the payment service provider market report include statistics from company annual reports, SEC filings, company websites, World Bank database, investor presentations, regulatory databases, government publications, and industry white papers. Analysts have also interviewed senior managers, product portfolio managers, CEOs, VPs, and market intelligence managers, who contributed to the production of TMR’s study on the payment service provider market, as a primary resource.
These primary and secondary resources provided exclusive information during the interviews, which serves as a validation from payment service provider industry leaders. Access to an extensive internal repository and external proprietary databases allows this report to address specific details and questions about the payment service provider market with accuracy. The study also uses a top-down approach to assess the numbers for each segment, and a bottom-up approach to counter-validate them. This has helped in making TMR’s estimates on the future prospects of the payment service provider market more reliable and accurate.
Payment Service Provider Market – Segmentation
TMR’s study on the payment service provider market includes information bifurcated into six sections - by component, payment channel, payment type, application, end use, and region. Changing industry trends and other crucial market dynamics associated with these sections of the payment service provider market have been discussed in detail.