Payment Processing Solutions Market Analysis North America, Europe, APAC, South America, Middle East and Africa - US, Germany, UK, China, Japan - Size and Forecast 2024-2028

Payment Processing Solutions Market Size 2024-2028

The payment processing solutions market size is estimated to increase by USD 81.4 billion and grow at a CAGR of 13.64% between 2023 and 2028. The market's growth hinges on various factors, notably the widespread adoption of contactless payment solutions, increasing e-commerce sales, and expanding internet access globally, alongside the growing emphasis on financial inclusion. Payment Processing Solutions encompass a suite of technological tools facilitating collaborative financial transactions between businesses and customers, establishing payment gateways aligned with predefined business protocols. Serving as intermediaries between merchants and customer accounts, these solutions streamline transactional flows efficiently. They constitute an array of processes harmonizing to optimize transactional efficiency. However, market challenges include addressing privacy and security concerns pertaining to consumer data, navigating stringent regulatory compliance requirements for payment processing, and managing integration complexities associated with these solutions. Addressing these challenges is essential for sustained market advancement.

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

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Market Segmentation

By Development

The market share growth by the cloud-based segment will be significant during the forecast period. In a cloud-based deployment, they are hosted on distant servers and accessed online. In this model, a third-party cloud service provider stores and manages the data and software used for processing. Because businesses can access and use these on a subscription or pay-as-you-go basis, cloud deployment offers scalability, flexibility, and lower upfront costs.

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The cloud-based segment showed a gradual increase in the market share of USD 31.40 billion in 2018 and continue to grow by 2022. Financial institutions that have had trouble streamlining, maintaining, and upgrading legacy infrastructure systems they built themselves are particularly drawn to cloud-based platform infrastructure because these systems have proven inadequate for coping with rapidly evolving market environments and technology. Hence, such factors are fuelling the growth of this segment during the forecast period.

By Method

Credit card payments are a widely used and convenient method in the global market. When customers make purchases using credit cards, they come into play to authorize and verify the transactions. This involves, inter alia, communication between the payment processor and the credit card issuer in order to authenticate the card's identity, and verify that there are funds available for the authorization of transactions. Payment processing solutions are often integrated into payment gateways with a view to facilitating credit card payments.

Regional Overview

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North America is estimated to contribute 39% 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. In 2022, North America dominated the global market. This is because mobile wallets and digital payment options are widely used in North American nations like the United States, Canada, and Mexico. Additionally, credit cards are the preferred method of payment in the region for point-of-sale (POS) and online transactions, which contributes to the expansion of the focus region's market. Several regional players are cooperating in order to increase their regional market presence and utilize the power of digital payment in their operations. For instance, Global Payments, a provider of technology and solutions, announced in May 2020 that Truist Financial Corporation, an American bank holding company, had signed a long-term agreement with TSYS, its Issuer Solutions business, to process the bank's consumer, business, and small business credit card portfolios. Such factors are further driving the growth of the regional market during the forecast period.

Market Dynamics and Customer Landscape

The evolution of payment processing solutions is deeply intertwined with technological innovations and changing consumer behaviors. Contactless payments have emerged as a cornerstone, especially in the context of social distancing and increased hygiene awareness. A comprehensive Pestle Analysis underscores the various factors shaping this landscape, from regulatory compliance to socio-economic trends. Despite recent controversies, players like Wirecard continue to influence the market. Robust data storage and efficient data retrieval, powered by cloud computing and advanced technologies like machine learning and artificial intelligence, are essential for seamless transaction processing. Investment in storage infrastructure is crucial to accommodate the growing volume of transactions driven by the popularity of mobile payment apps and digital payments. Ensuring transaction security is paramount, with companies like ACI Worldwide and Mastercard leading the charge through innovative solutions and robust APIs. Technologies such as Near-field Communication and QR code payment technology facilitate contactless payments, while e-wallets and traditional debit and credit cards remain popular choices. Venture capital firms play a pivotal role in funding initiatives aimed at enhancing online payment processing and driving digital payments adoption. As the industry continues to evolve, it must navigate regulatory challenges and address consumer preferences to remain resilient and adaptable.

Key Market Driver

The high adoption of contactless payment solutions is driving growth. The presentation of portable installment passages, like PayPal, Phoenpe, and others, has improved the most common way of covering bills. Credit and debit cards are no longer required to be carried by customers. At first, users must save their financial information on their smartphones. They will be able to make payments by being close enough to the vendor's contactless payment-enabled PoS system with their phone. Users can use passwords or fingerprint scans to authorize transactions once a connection has been established.

The increased adoption of mobile devices and wearables has popularized the use of mobile payments. Many retailers are adopting platforms such as NFC PoS terminals that facilitate mobile payments. The value and efficiency of the retailer's marketing efforts are also enhanced by NFC point-of-sale terminals. Retailers benefit from a streamlining of operations process, which increases their revenues. The availability of contactless payment PoS terminals and payment options is also expected to contribute to market growth during the forecast period. The adoption of contactless payment gateways is expected to drive the growth of the market focus during the forecast period.

Significant Market Trends

Growing financial inclusion globally is a primary trend in the market. The global market is expanding at a rapid rate thanks to the growing level of global financial inclusion. Financial inclusion initiatives aim to make formally accessible financial services and tools available to people and businesses that have historically been underrepresented in the banking system or failed to benefit from it. As financial inclusion expands worldwide, this has a significant impact on the payment processing industry. One fundamental aspect of financial inclusion is increasing access to financial services. The number of financial transactions significantly rises as more people and businesses gain access to digital wallets, payment cards, and bank accounts.

However, the surge in financial activity necessitates reliable and efficient processing solutions to facilitate online and offline secure and convenient payments. The promotion of micro and smaller enterprises is often part of financial inclusion initiatives. They have been designed to meet the special needs of these businesses so that they can take advantage of digital payments, control transactions, and make use of valuable data and analytical tools for managing their finances. They play a vital role in promoting entrepreneurship and economic growth by providing tools and resources to participate in the formal economy. Thus, growing financial inclusion globally is one of the emerging trends which is expected to drive the growth of the market focus during the forecast period.

Major Market Restrain

Privacy and security concerns related to consumer data are major challenges in the solutions market. There are risks associated with online transactions, such as identity theft and bank account hacking. Given that, a large number of Internet retailers use this information to inform their customers about price increases and changes, privacy concerns regarding personal data are also growing. Numerous clients object to the utilization of the individual data they give while involving the installment answer for the end goal of promoting. Versatile specialist co-ops gather individual data to target clients and customize publicizing messages.

Moreover, to gather data, such as information on the behavior of users, consumer profiles, and data mining, it uses tracking cookies. The use of information collected and retained by retailers is a breach of the privacy of customers. Privacy concerns are also raised with the provision of these services, given that geolocation information is required by customers to provide such services. Payment gateways are used for real-time financial transactions in e-commerce and mobile commerce. Hence, the theft of financial data on such platforms is expected to lead to huge losses for consumers during the forecast period. Security risks still exist for transactions via gateways. The use is dissuaded by the potential for unauthorized access to such data. This is a potential challenge that is expected to hinder the growth of the market focus during the forecast period.

Market Customer Landscape

The Market industry 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 growth strategies.

Global Market Customer Landscape

Who are the Major 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.

ACI Worldwide Inc. - The company offers payment processing solutions such as the ACI enterprise payments platform.

Alibaba Group Holding Ltd. - The company offers payment processing solutions such as Alipay.

Block Inc. - The company offers payment processing solutions such as Square Payments.

The research report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:

• BlueSnap Inc.
• CCBill LLC
• Fidelity National Information Services Inc.
• Finix Payments Inc.
• Fiserv Inc.
• Global Payments Inc.
• Mastercard Inc.
• MIH PayU BV
• One97 Communications Ltd.
• PayPal Holdings Inc.
• Paysafe Ltd.
• PhonePe Pvt. Ltd.

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.

Segment Overview

The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.

• Deployment Outlook
  • Cloud-based
  • On-premises

• Method Outlook
  • Credit card
  • Debit card
  • E-wallet
  • Others

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

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Market Analyst Overview

The market is undergoing rapid evolution fueled by technological advancements and changing consumer behaviors. With the exponential growth of digital transactions, robust data storage and efficient data retrieval mechanisms are paramount. Cloud computing facilitates seamless processing of transactions, particularly for data-intensive applications and advanced technologies like machine learning and artificial intelligence. Storage infrastructure must be scalable and robust to handle increasing workloads while ensuring data security, availability, and integrity. Flash-based storage, SDS solutions, and innovative security features address evolving technological trends and the complexities of hybrid IT environments and cloud adoption. However, challenges such as cost constraints, legacy system integration, and compatibility issues persist. Payment Processing Solutions encompass various technologies like Fiber Channel, InfiniBand, and the iSCSI Protocol, catering to diverse needs across the IT and telecom, e-commerce, and mobile payment apps sectors.

As the market embraces digital transformation, scalable and agile solutions, alongside hybrid cloud architectures, facilitate seamless data mobility, replication, and synchronization. Interoperability and cloud-first strategies drive innovation, while hybrid IT models offer flexibility in deployment. Strategic objectives center around efficient estimations and deployment modes, ensuring transaction security and addressing data privacy concerns. Ventures in digital payment processing leverage APIs, Near-field Communication, and QR code payment technology, accommodating diverse e-wallets, debit, and credit cards. Venture capital firms play a pivotal role in funding initiatives amidst changing landscapes, with an increasing emphasis on social distancing and online payment processing, particularly for SMBs.

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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 market growth and forecasting of the market between 2023 and 2028.
• Precise estimation of the size of the market size and its contribution to the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Growth of the market industry across Europe, North America, APAC, South America, and Middle East and Africa
• Thorough market growth analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive market analysis and report on the factors that will challenge the market research and growth of market companies

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