|Fastest Growing Market:||Middle East and Africa|
|Largest Market:||North America|
Need a report that reflects how COVID-19 has impacted this market and its growth?
The digital payments market was valued at USD 7.36 trillion in 2021. It is projected to be worth USD 15.27 trillion by 2027, registering a CAGR of 12.38% from 2022 to 2027. The COVID-19 pandemic and its impact on e-commerce will likely encourage the strengthening of international cooperation and the development of policies for online purchases and supply. The pandemic has made e-commerce an essential tool or solution, especially since e-commerce sales can support small and medium businesses that form the backbone of certain economies. This factor is expected to substantially spur the growth of digital payment methods across various economies.
- The global landscape of payments and transactions is changing rapidly due to the increased number of enterprises and consumer propensity toward digital transformation and the penetration of smartphones. The technological advancements in smartphones, digital payment cards, and POS at retail terminals are fueling the market’s growth. The rapid rise in smartphone penetration across emerging economies, primarily in the Asia-Pacific region, is expected to impact the market’s growth positively. The introduction of mobile wallets worldwide, wherein a consumer is asked to add money to the application and use it later within or outside of the merchant (if applicable), is rapidly propelling the adoption of digital payment services.
- Even though card-based transactions command a significant share of the non-cash transactions market, which stood at 72% in 2020 (Capgemini), the growth is stagnating with the emergence of local and regional schemes, such as EuPay, EPI, and Verve Card, which are challenging the card market globally.
- Governments are taking the initiative to introduce digital payment solutions. For instance, in August 2021, Indian Prime Minister Narendra Modi launched the digital payment solution e-RUPI, a person and purpose-specific digital payment solution. e-RUPI is a cashless and contactless instrument for digital payment.
- Moreover, emerging economies worldwide are observing prominent growth rates in the adoption of mobile payments, not only due to ease of performing transactions or penetration of smartphones but also because of the financial inclusion features offered by the technology.
- The increases in international trade, internationalization of production, and cross-border e-commerce suggest that demand for digital cross-border payments will continue to grow globally. However, digital payments from one country to another might prove to be costlier, slower, and less transparent than domestic payments due to the complexity involved in the procedure. This factor may hinder the adoption of digital payments for cross-border transactions among enterprises in the region, especially small- and medium-sized businesses.
- According to American Express, cardholder spending was severely hit due to the COVID-19 pandemic. With businesses expanding contactless payment options to invite customers, the contactless feature is observed to have become a USP for businesses worldwide. Due to such developments, banks worldwide are expected to partner with mobile payment providers to expand their banking services.
- However, the acceptance of digital payment methods is expected to improve post-COVID-19 and play a more vital role in the long term. The COVID-19 pandemic has encouraged the adoption of digital payments in Singapore, especially after the launch of a common QR code standard. Additionally, London-based Rapyd, a global FinTech-as-a-Service company, announced a new Solidarity Programme to help Singaporean businesses quickly accept payments online with no fees until the end of June, enabling them to serve customers staying at home. Such developments may ensure that real-time payment methods, such as PayNow and FAST, get accepted more quickly.
Scope of the Report
Digital payment is a way of payment made through digital modes. In digital payments, the payer and payee use digital modes to send and receive money. It is also called electronic payment. No hard cash is involved in digital payments. As per industry standards, DP is defined only as non-cash transactions made through digital channels. The scope of the report only considers consumer transactions through digital commerce (payment processed using online card payments, direct debit, online payment gateways) or mobile PoS payments (payment processed at PoS using smartphone and wallet transactions).
The digital payments market is segmented by mode of payment, end-user industry, and geography.
|Mode of Payment|
|Point of Sale|
|Other End-user Industries|
|Middle East and Africa|
Key Market Trends
Retail Industry to Drive Market Growth
- The payments market is changing in line with consumer behavior. A few trends affecting the payments market are cashless economies, mobile banking, instant payments, digital commerce, and the growing impact of regulatory agencies.
- Contactless payments also make the payment process easier and more convenient for consumers who benefit from shorter lines, cash-on-hand issue elimination, and faster moving queues.
- The Asia Pacific region is anticipated to witness significant growth in the market as countries, such as China and India, adopt the digital mode of payment using digital and mobile wallets. The ubiquitous mobile devices, advanced digital infrastructure, and the growing usage of apps drive digital/mobile wallets, which are growing rapidly in the region. According to the Global Payment Report 2020, digital and mobile wallets account for 58% of regional e-commerce payments and are expected to reach 68.2% by 2023.
- Further, the e-commerce sector is witnessing a spike in demand as consumers order essential items such as food and clothes through e-commerce websites, where most consumers prefer the digital mode of payment. According to the Reserve Bank of India’s (RBI) Digital Payments Index (DPI), which was launched in January 2021 to indicate the extent of digitization of payments in India, the index for September 2021 stood at 304.06 against 270.59 in March, indicating the rapid adoption and deepening of digital payments across the country.
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North America to Account for the Most Significant Share
- Digital payment is expected to be the preferred mode of payment for citizens across the United States. For instance, as per Capgemini estimates, 41% of all shoppers in the country expect their smartphone or tablet to become their most important shopping tool. Moreover, digital payments are the preferred mode of payment among millennials.
- E-commerce sales in the country are also increasing with the improvement of the digital payment experience. This increase further reflects consumers' increasing comfort with online shopping and the increasing use of mobile and hand-held devices.
- Google has pushed the UPI model of digital payments for the US Federal Reserve. Infibeam Avenues Ltd, a digital payment solutions and enterprise software platform provider, announced that it had made inroads into the United States, the world's second-largest digital payments market by revenue.
- In addition, the COVID-19 pandemic has increased the popularity of digital payments in the United States. For instance, San Francisco-based AppsFlyer, a software-as-a-service (SaaS) mobile analytics and attribution platform, reported a 22% increase in in-app purchases in March 2020.
- In February 2022, Apple announced plans to introduce Tap to Pay on iPhone. The new capability intends to empower millions of merchants across the United States, from small businesses to large retailers, to use their iPhones seamlessly and securely to accept Apple Pay, contactless credit and debit cards, and other digital wallet payments through a simple tap to their iPhones with no additional hardware or payment terminal.
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The Digital Payments Market is moderately concentrated. The competitive rivalry in the market is moderate. Due to several companies operating in the market, firms must keep innovating their products to gain a sustainable competitive edge over their rivals and provide product differentiation.
- June 2022 - Verizon Business is partnering with First National Bank of Omaha (FNBO) and Mastercard to launch a credit card targeted to bring value to small business owners. Businesses with less than 100 lines and an online account can apply for the Verizon Business Mastercard. It will include reward points on every purchase from the credit card.
- May 2022- Visa, entering into a partnership with Fundbox, a working capital platform, to convert its operation into digital payment solutions targeting small businesses. The first phase of the process is to launch Fundbox Flex Visa Debit Card, which Pathward issues N.A.
- March 2022 - Visa has completed its acquisition process of Tink – an open banking platform that enables fintechs, merchants, and financial institutions, to create financial products and services and helps monetary transactions. With the sing API, Tink enables its customers to access aggregated financial data, use smart financial services, and help analyze risk insights and account verification. Tink has collaborated with more than 3,400 banks, financial institutions, and millions of bank customers across Europe.
- June 2022 - PayPal Holdings Inc. expanded and announced increasing its credit offerings to include a business credit card targeting small business owners. Issued by WebBank The PayPal Business Cashback Mastercard, powered by the Mastercard network, is the first business credit card by PayPal. With no annual fee along with 2% cashback on all purchases with no rewards earning caps or expiration.
- June 2022 - Ninth Summit of the Americas, Mastercard, and DFC announced the joint program in response to the Call to Action for Northern Central America launched by the Vice president in May 2021. The Call to Action is designed to deepen financial inclusion in El Salvador, Guatemala, and Honduras, thus creating economic opportunities for small businesses and individuals.
- March 2022 - Visa initiated a new program to help creators such as musicians, filmmakers, fashion designers, and artists expand and speed up their small businesses using non-fungible tokens (NFTs). The operation is named Visa Creator Programme'. The initiative will help next-generation entrepreneurs use and understand NFTs.
Table of Contents
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
4.1 Market Overview
4.2 Industry Stakeholder Analysis
4.3 Industry Attractiveness- Porter's Five Forces Analysis
4.3.1 Threat of New Entrants
4.3.2 Bargaining Power of Buyers
4.3.3 Bargaining Power of Suppliers
4.3.4 Threat of Substitute Products
4.3.5 Intensity of Competitive Rivalry
4.4 Payments Infrastructure and Evolution of Payments Landscape
4.5 Regulatory Sandbox
4.5.1 Regulatory Landscape Across the World
4.5.2 Business Models with Potential Regulatory Roadblocks
4.5.3 Scope for Development in Lieu of Evolving Business Landscape
4.6 Assessment of the Impact of COVID-19 on the Market
4.7 Analysis of Digital Payment Infrastructure
5. MARKET DYNAMICS
5.1 Market Drivers
5.1.1 High Proliferation of Smartphones and Digital Initiatives
5.1.2 Favorable Changes in Regulatory Frameworks Across the World
5.2 Market Challenges
5.2.1 Operational Challenges Involving Cross-border Payments
5.3 Market Opportunities
6. MARKET SEGMENTATION
6.1 Mode of Payment
6.1.1 Point of Sale
6.1.2 Online Sale
6.2 End-user Industry
6.2.5 Other End-user Industries
6.3.1 North America
6.3.3 Asia Pacific
6.3.4 Latin America
6.3.5 Middle East and Africa
7. COMPETITIVE LANDSCAPE
*List Not Exhaustive
7.1 Company Profiles
7.1.1 PayPal Holdings Inc.
7.1.2 Visa Inc.
7.1.3 MasterCard Incorporated (MasterCard)
7.1.4 Amazon.com Inc.
7.1.5 Alphabet Inc.
7.1.6 Apple Inc.
7.1.7 Mobiamo Inc.
7.1.8 Paytm (One97 Communications Limited)
7.1.9 Stripe Inc.
7.1.10 Alipay.com Co. Ltd
7.1.11 Fiserv Inc.
7.1.12 Wordplay Inc. (Fidelity National Information Services)
7.1.13 ACI Worldwide
8. INVESTMENT ANALYSIS
9. FUTURE OF THE MARKET
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Frequently Asked Questions
What is the study period of this market?
The Digital Payments Market market is studied from 2020 - 2027.
What is the growth rate of Digital Payments Market?
The Digital Payments Market is growing at a CAGR of 12.38% over the next 5 years.
Which region has highest growth rate in Digital Payments Market?
Middle East and Africa is growing at the highest CAGR over 2021- 2026.
Which region has largest share in Digital Payments Market?
North America holds highest share in 2021.
Who are the key players in Digital Payments Market?
Paypal Holdings Inc., Visa Inc., Mastercard Incorporated (Mastercard), Amazon.Com Inc., Alphabet Inc. are the major companies operating in Digital Payments Market.