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The digital payment market size is estimated to grow by USD 330.6 billion at a CAGR of 30.44% between 2023 and 2028. The digital payment market is experiencing significant growth due to the convenience and speed of online transactions. Mobile devices, such as smartphones and wearables, are driving the expansion of mobile payments through platforms like mobile wallets and Near-Field Communication (NFC) technology. Retailers are adopting NFC point-of-sale (POS) terminals to facilitate contactless payments and enhance marketing efforts. This trend reflects the increasing demand for swift and hassle-free payment solutions in today's digital age. Key technologies like NFC and mobile wallets are transforming the way consumers make transactions, offering a more efficient and convenient payment experience.
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The market is witnessing significant growth due to the increasing usage of mobile phones and internet accessibility among adults worldwide. Technological developments have made digital payments more user-friendly, convenient, and secure, leading to a shift from traditional cash and card-based transactions. Mobile wallets, such as EuPay, EPI, and Verve Card, have gained popularity due to their ease of use and compatibility with smartphones. The penetration of smartphones and the availability of retail terminals and POS systems have further facilitated the adoption of digital payments. According to recent reports, over a billion people worldwide are using digital payments, and this number is expected to increase as more businesses embrace the world of web. The convenience offered by digital payments, including mobile payment and cloud-based digital transactions, is driving their adoption. With the increasing number of bank accounts and the availability of various digital payment options, consumers are increasingly opting for cashless transactions, making the digital payment market a promising space for growth. Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The advantages of digital payments is the key factor driving the growth of the market. Digital payments have revolutionized the way people and enterprises do business with each other. Payment methods present a range of benefits that will transform the way people and businesses conduct financial transactions. Convenience is one of the advantages of the digital payments market. Trade barriers, transaction fees, and cyber-attacks pose challenges to the market's expansion. Financial inclusion initiatives aim to serve the unbanked population by providing access to financial services and electronic transactions. Digital literacy is crucial for users to navigate user-friendly experiences and valuable data. Cross-border payments, cryptocurrency transactions, and universal standards are essential for a global payment system. Technology-driven tools, such as online banking and payment infrastructures, are crucial for enabling seamless transactions. Wristbands and connectivity are expanding the reach of digital payments beyond traditional devices. Despite these advancements, concerns over data security and cyber-attacks persist.
Additionally, many payment methods use advanced encryption and authentication technology, making them more secure than carrying cash or traditional paper-based payment methods. Digital transactions also leave a trail, helping to prevent fraud, resolve disputes, enhance accountability, and reduce the risk of financial fraud. Thus, such factors are expected to accelerate the market growth and trends during the forecast period.
The growing emergence of mobile apps for shopping transactions is the primary market trends. In the modern scenario, as smart devices continue to drive the market, more online shopping transactions are on mobile apps than on websites. To take advantage of these opportunities, the market players are switching from a website to a pure app service. Mobile payments are growing rapidly in countries such as India, with more customers and enterprises adopting digital payments during the pandemic. However, this transition poses challenges for e-commerce providers, as connectivity issues persist in some developing countries, limiting online purchasing capabilities. Trade barriers, transaction fees, and financial inclusion initiatives are key considerations in the digital payment landscape. Unbanked individuals and improving digital literacy are driving the adoption of user-friendly experiences, such as mobile wallets and NFC technology. Valuable data, contactless payments, and cross-border transactions are transforming financial services, with global payment systems and platforms leading the way. Technology-driven tools, like mobile apps and online banking, are essential for universal standards and user-friendly experiences. However, concerns around cyber-attacks, connectivity, and cryptocurrency transactions remain, necessitating robust security measures and universal standards. As the market evolves, the focus on user-friendly experiences, financial inclusion, and technology innovation will continue to shape the digital payment landscape.
Besides, many developing countries such as Indonesia and Thailand still face internet connectivity issues and customers cannot shop online, so the move to app-only services is a major global challenge for e-commerce providers. It may fail. However, new applications are emerging. For example, in January 2020, Alibaba launched Yoli, an e-commerce app in India. Therefore, such factors drive the growth of the market during the forecast period.
Privacy and concerns related to security is a challenge that affects the growth of the market. While digital payment methods have many advantages, there are also privacy and safety concerns that affect individuals and enterprises. Data breaches and hacking attacks are common in these gateways because payment systems contain sensitive financial and personal information.
The digital payment market experiences growth, yet faces challenges. Trade barriers and transaction fees hinder expansion with its complex and inefficient processes particularly for unbanked individuals. Universal standards and user-friendly experiences are essential for widespread adoption. Valuable data, including financial and personal information, is at risk during electronic transactions. Wristbands and contactless payments, driven by NFC technology, offer convenience but increase the threat of cyber-attacks. Cross-border payments and cryptocurrency transactions require robust security measures. Digital literacy and financial inclusion initiatives are crucial to mitigate risks. Global payment systems and financial services must prioritize technology-driven tools and platforms to ensure secure, user-friendly experiences. Despite these challenges, the market continues to evolve, with online banking and mobile wallets leading the way.
Moreover, the solitariness of confidential information is being abused. They also give a peak to third-party access, as many sellers share customer information with third-party market players for marketing reasons. Additionally, criminals and hackers tend to send phishing emails, messages and fake websites. Fraud information is shared with customers. These factors are expected to impede the growth of digital payments during the market analysis and report period.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Square Inc.: The company offers digital payment account to account payment services which move money directly from payers bank account to a payees bank account without the need for intermediaries such as credit or debit cards.
The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about key companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
In the modern digital landscape, Transactions and Costs play a significant role in shaping consumer behavior. The use of Digital Payments has become increasingly popular, with Inconveniences and Finance being key factors driving this trend. Intransitives such as time and effort savings, and the convenience of making payments from anywhere, anytime, have made Digital Payments an integral part of our daily lives. The Transparency and Security offered by Digital Payments provide consumers with peace of mind, while the availability of various payment options, including Credit Cards, host card emulation (HCE), Online Banking, and Mobile Wallets, cater to diverse user preferences. The Cost-effective nature of Digital Payments, with lower transaction fees compared to traditional methods, is another major advantage. Moreover, the integration of technologies like Artificial Intelligence and Machine Learning in Digital Payment systems enhances the user experience, making transactions faster and more efficient. The Lack of physical interaction also ensures a safer transaction environment, making Digital Payments an essential component of the modern economy. In conclusion, the market is a dynamic and evolving sector, driven by the need for convenience, cost savings, and security. The integration of advanced technologies further enhances the user experience, making Digital Payments an indispensable part of our lives.
By End-User
The large enterprises segment is estimated to witness significant growth during the market forecast period. Generating a large number of transactions is driving the acceptance of digital payments by large corporations. Key contributors to this segment are companies in the banking, securities, finance, and insurance (BSFI), information technology, and manufacturing sectors. In addition, there have been several expansions of BFSI companies.
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The large enterprises segment was the largest segment and was valued at USD 23.70 billion in 2018. Hotels, cafes, grocery stores, shopping malls, and event managing companies use digital payment gateways for fast and easy transactions. The digital payment market has experienced significant growth due to increased transactions in large enterprises, particularly in the banking, securities, finance and insurance (BSFI), information technology, and digital payment vendors industries. This expansion is driven by the rise of intraregional and cross-border banking activities, leading to a higher demand for digital payment services. Modern vending machines, hotels, restaurants, grocery stores, shopping malls, and event management companies have adopted digital payment portals for fast and easy transactions. Key drivers include the reduction of trade barriers, user-friendly experiences, and the acceptance of contactless payments, mobile wallets, and Near-Field Communication (NFC) technology. However, challenges such as transaction fees, cyber-attacks, and digital literacy among the unbanked population remain.
Financial inclusion initiatives and global payment systems aim to provide valuable data and universal standards to bridge the gap. Cryptocurrency transactions and technology-driven tools like online banking and connectivity through wristbands are also shaping the future of digital payments. This is a key factor driving the growth of the market. Most of the market revenue is generated by large companies, who focus on technologically advanced services such as gateways and mobile wallets. Therefore, increasing demand and adoption of payment practices are expected to drive the growth of the market during the market forecasting period.
The Digital Payment Market encompasses solutions for cards and cash transactions, including payment gateways, processing, wallets, security, and POS systems. The market's expansion is driven by economic growth, financial inclusion initiatives, and the widespread use of the Internet. However, challenges such as compliance difficulties, connectivity issues, and high transaction costs persist. Cross-border trade complications include Local currency exchange costs, inconsistent user experiences, and lack of transparency. Customer support, data storage requirements, and digital literacy are essential considerations. Payment regulations and security risks are significant restraints. Private sector players and local banks collaborate to address these challenges, with initiatives focusing on cross-selling additional services, improving financial inclusion, and innovating through mobile technologies, NFC, and regional financial regulations. Despite these efforts, limited financial, limited financial inclusion and limited innovation inclusion and slow transaction processing remain concerns in the global payment market.
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APAC is estimated to contribute 39% to the growth of the global market during the market forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The APAC market is expected to witness high growth due to rapid urbanization and the growing penetration of Internet assistance. The increasing acceptance of various methods, such as wallets and payment gateways is driving the growth of the regional market.
Additionally, the market experiencing significant growth due to economic expansion, urbanization, and increasing Internet connectivity. The region's financial services sector is undergoing digital transformation, with payment gateways and digital wallets, such as Airtel Money and PayU, gaining popularity. However, challenges persist, including compliance difficulties, high transaction costs, and security risks. Cross-border trade complications, currency exchange costs, and inconsistent user experiences are also restraints. Initiatives to expand financial inclusion and cross-sell additional services are driving innovation, with local banks, private sector players, and global payment systems collaborating. Data storage requirements, customer support, and payment regulations are key considerations. Despite these challenges, the market's potential is vast, with opportunities in mobile payments, NFC technology, and regional financial regulations.
The market report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Million" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments
Digital payments have revolutionized the way we make transactions, with mobile wallets leading the charge. Technological developments have made it possible for smartphones to function as digital payment cards, allowing users to make purchases at Point of Sale (POS) retail terminals and online. The penetration of smartphones and increasing availability of bank accounts have fueled the growth of mobile payment solutions. European payment systems like EuPay and EPI, as well as local players such as Verve Card, have joined the fray with cloud-based digital payment platforms. Mercury Payment, Oracle Banking, and Digital Crossorder are other notable players in this space. International trade and e-commerce sales have also benefited from the shift towards digital payments. Regulatory bodies are encouraging a cashless society by promoting the use of NFC and QR codes. Tech-savvy consumers are embracing mobile payment solutions like Apple Pay, Google Pay, Samsung Pay, Visa, PayPal, Venmo, Visa+, and Mastercard. The increasing internet penetration rates and the availability of mobile payment solutions to adults worldwide have made digital payments an integral part of our daily lives. Technological advancements, such as those by Ericsson, continue to drive innovation in this space. The future of digital payments looks bright, with e-commerce sales expected to grow exponentially. The future of digital payments is here, and it's cashless.
Market Scope |
|
Report Coverage |
Details |
Page number |
170 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 30.44% |
Market growth 2024-2028 |
USD 330.6 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
22.42 |
Regional analysis |
APAC, North America, Europe, South America, and Middle East and Africa |
Performing market contribution |
APAC at 39% |
Key countries |
China, UK, US, India, and South Korea |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
ACI Worldwide Inc., Adyen NV, Apple Inc., Aurus Inc., Block Inc., Due Inc., Fattmerchant Inc., Fidelity National Information Services Inc., Fiserv Inc., Global Payments Inc., Intuit Inc., JPMorgan Chase and Co., Mastercard Inc., PayPal Holdings Inc., Paysafe Ltd., PayTrace Inc., Stripe Inc., VeriFone Inc., Visa Inc., WEX Inc., and Worldline SA |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Component
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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