Digital Payment Market by End-user, Component and Geography - Forecast and Analysis 2023-2027

Digital Payment Market Forecast 2023-2027 

The digital payment market size is estimated to grow by USD 160.94 billion at a CAGR of 21.23% between 2022 and 2027. The digital payment market is witnessing remarkable expansion owing to the convenience and rapidity of online transactions. Mobile devices, particularly smartphones and wearables, are fueling the surge in mobile payments facilitated by platforms like mobile wallets and Near-Field Communication (NFC) technology. Retailers are increasingly integrating NFC point-of-sale (POS) terminals to streamline contactless payments and bolster marketing initiatives. This trend underscores the growing preference for swift and hassle-free payment solutions in the digital era.

What will be the Size of the Market During the Forecast Period?

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Market Dynamics and Customer Landscape

In the contemporary digital landscape, the Cashless Economy has gained significant traction, with Digital Payments emerging as a key trend. The Financial sector has witnessed a paradigm shift, as consumers increasingly prefer contactless transactions. Companies like Compace, Financials, and Currencylive, among others, have capitalized on this trend, providing Payments, Transactions, and Currency conversion services. The Regulatory framework, including the Reserve Bank of India and the NPCI, has facilitated the growth of Digital Payments in India. The market is diverse, with Regulatory, Payment, and Technology providers contributing to its ecosystem. The Payments industry includes providers like Payments Regulators, Payment Systems Operators, and Payment Service Providers. The Technology sector comprises companies offering solutions for secure transactions, such as encryption and tokenization. The Digital Payment Market is expected to grow exponentially, driven by the increasing adoption of digital transactions and the convenience they offer.Our researchers analyzed the data with 2022 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.

Key Driver

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.

Key Trends

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.

Key Challenge

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 forecast period.

Customer Landscape

The market growth analysis 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 market forecasting report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Customer Landscape

Who are the Major Digital Payment Market Companies?

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 20 market companies, including:

• ACI Worldwide Inc.
• Adyen NV
• Apple Inc.
• Aurus Inc.
• Due 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.
• Worldline SA
• Fattmerchant Inc.

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.

Market Segmentation

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 Digital Payment 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 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 20.11 billion in 2017.  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 forecast period.

By Component

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.

Regional Analysis

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APAC is estimated to contribute 34% to the growth of the global market during the 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.

Furthermore, various governments in the region are making efforts to facilitate digital payments. There are many different types and methods of digital payments. Various methods such as Unified Payments Interface (UPI) and mobile wallets have grown significantly in the region. Hence, such factors will drive the market growth during the forecast period.

Market Analyst Overview

The digital payments market is experiencing a transformative shift, propelled by innovations like Contactless payments and NFC technology, enabling seamless transactions via mobiles, rings, and wristbands. Despite rapid growth, challenges persist, including a lack of global standards for cross-border payments, hindering international finance and trade.

In today's digital age, the use of cash has significantly decreased, and the trend is shifting towards digital payments. The Digital Payment Market is witnessing a remarkable growth, with technologies like Contactless Cards, QR Codes, Mobile Wallets, and Online Banking leading the charge. Companies like CaixaBank, Compliance, and Crossover have been instrumental in the development and implementation of these technologies. The convenience and ease of use offered by digital payments have made them increasingly popular. Customers can now make transactions from the comfort of their homes or on-the-go, making the process more efficient and time-saving. Additionally, the security features of digital payments provide an added layer of protection against fraud and theft. The Digital Payment Market is expected to continue growing, with a significant increase in the number of users adopting digital payment methods. The trend is particularly noticeable in developing countries, where the penetration of traditional banking systems is low. Digital payments offer a cost-effective and accessible alternative, making financial transactions more inclusive. The market is a rapidly growing sector, driven by the convenience, security, and accessibility offered by digital payment technologies. Companies are investing heavily in research and development to create innovative solutions that cater to the evolving needs of consumers. The future of digital payments looks bright, with a promising outlook for growth and innovation.

Digital payment providers strive to deliver user-friendly experiences within a framework of evolving government regulations and payment standards. Initiatives to address compliance difficulties and promote financial inclusion are underway, driving economic growth and reducing cash reliance. Enhanced security measures combat risks while fostering trust among unbanked individuals. Regional adaptations cater to local needs, fostering collaboration between private sector players, banks, and regulators to streamline processes and reduce transaction costs, ultimately promoting financial inclusion and economic prosperity.

Segment Overview

The market growth and forecasting report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. 

• End-user Outlook
  • Large enterprises
  • SMEs

• Component Outlook
  • Solutions
  • Services

• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • South America
    • Chile 
    • Brazil 
    • Argentina
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

Digital Payment Market Scope
Report Coverage	Details
Page number	163
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 21.23%
Market growth 2023-2027	USD 160.94 billion
Market structure	Fragmented
YoY growth 2022-2023(%)	19.75
Regional analysis	APAC, North America, Europe, South America, and Middle East and Africa
Performing market contribution	APAC at 34%
Key countries	US, China, India, South Korea, and UK
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., Due 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., Worldline SA, Fattmerchant Inc., and Square Inc.
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 the forecast period.
Customization purview	If our market trends and analysis report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the growth of the market between 2023 and 2027
• Precise estimation of the market  size and its contribution of the market in focus to the parent market
• Accurate predictions about upcoming trends and changes in consumer behaviour
• Growth of the market across APAC, North America, Europe, South America, and Middle East and Africa
• Thorough analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the growth of market companies

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