Digital Payments Market Trends

Market Trends of Digital Payments Industry

Retail End User Industry is Expected to Hold Significant Market Share

• Digital payments have become increasingly popular in retail as businesses and consumers embrace convenience and efficient transactions. The rise in online shopping has significantly influenced the adoption of digital payments in retail. E-commerce platforms and online retailers integrate digital payment methods, such as credit/debit cards, mobile wallets, and digital payment gateways, to facilitate secure and seamless transactions.
• Traditional brick-and-mortar retailers are also transitioning to digital payment solutions at their physical stores. Modern POS Systems often incorporate digital payment capabilities, enabling customers to make payments using contactless methods like NFC (Near Filed Communication), mobile apps, and QR codes.
• According to the US Census Bureau, In Q4 2022, e-commerce sales amounted to 14.7 percent of total revenues. In the United States, wallets exceeded credit cards in 2022 and are estimated to account for roughly one-third of regional e-commerce expenditure in three years, headed by Amazon Pay, Apple Pay, Google Pay, and PayPal.
• E-commerce is witnessing a spike in demand as consumers order essential items such as food, clothes, and others through e-commerce websites. Most consumers prefer the digital mode of payment. The Reserve Bank of India's (RBI) digital payments index (DPI), launched in January to indicate the extent of digitization of payments in India, shows the index for September stood at 304.06 against 270.59 in March. This means the rapid adoption and deepening of digital payments across the country.
• According to Ericsson's data, global smartphone subscriptions were around 6,567 million last year. It is expected to reach approximately USD 6,841 million by the end of the current year. Additionally, it is forecasted to reach a landmark of roughly 7,690 million in four years. Hence, with the rise in the total number of smartphone subscriptions worldwide, the market for Digital Payments is presumed to face a vast range of lucrative growth opportunities in the upcoming days.

North America is Expected to Hold Significant Market Share

• North America represents one of the largest digital payment markets globally. The region's advanced technological infrastructure, high internet penetration rates, and a large base of tech-savvy consumers contribute to the market's growth. The market continues to expand as businesses and consumers increasingly adopt digital payment solutions.
• Mobile payment solutions play a significant role in the North American market. Mobile wallets like Apple Pay, Google Pay, and Samsung Pay have gained widespread acceptance. These wallets enable users to pay using smartphones, leveraging technologies such as NFC and QR codes.
• As per the data forecast from the US Census Bureau, there is a USD 1.7 billion increase in the sales value of smartphones sold in the United States, for a total of USD 74.7 billion in sales in the previous year. Therefore, with this rise in the total number of smartphone users and the increase in the sales value of smartphones, it is evident that the market for digital payments in the region will face various growth opportunities in the coming era.
• The digital payment market in North America is closely intertwined with the thriving e-commerce sector. Online retailers and e-commerce platforms provide digital payment options to facilitate secure and convenient transactions.
• Digital payments in the region are characterized by continuous innovation and collaboration between technology companies, financial institutions, and merchants. In April 2023, Visa partnered with PayPal and Venmo to pilot Visa+. This innovative service aims to assist individuals in moving money securely between different person-to-person (P2P) digital payment apps. Later this year, Venmo and PayPal users in the United States can start transferring money seamlessly between the two platforms. Visa+ would not require users to have a Visa card; instead, by setting up a personalized payment address linked to their Venmo or PayPal account, individuals using either app can receive and send payments quickly and securely between the platforms.