North America Payments Market - Growth, Trends, COVID-19 Impact and Forecasts (2022-2027)

The North American Payments Market is Segmented by Mode of Payment (Point of Sale (Card Payments, Digital Wallet, Cash), Online Sale (Card Payments, Digital Wallet)), and by End-user Industries (Retail, Entertainment, Healthcare, Hospitality).

Market Snapshot

North America Payments Market
Study Period: 2022-2027
Base Year: 2021
CAGR: 15.49 %

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Market Overview

The North American payments market is expected to register a CAGR of 15.49% during 2022-2027. Some of the primary factors driving the growth of this market in the region are the rise of eCommerce, the prevalence of mobile devices, open banking, and digital currency.

  • American Express is a major credit card company in the United States. It is well-known for providing excellent customer service and some of the best rewards. American Express offers credit cards suitable for a wide range of cardholders, from ultra-elite business travel cards to everyday rewards. The J.D. Power 2021 U.S. Credit Card Satisfaction Study has ranked first for customer satisfaction among national credit card issuers.
  • Credit card issuers (or offering banks) are the players (banks or credit unions) from which people obtain credit cards. Chase and Citi are two of the largest banks in the United States, while TD and RBC are the largest in Canada. The issuing bank gets to decide things like the interest rate, the limit, foreign fees, etc.
  • The COVID-19 pandemic had a significant impact on the payment industry in North America. Lockdowns and business closures prevented people from making in-person purchases and altered how they transacted before the outbreak. While overall spending fell due to concerns about the economy and personal finances, people spent more money online, hastening the transition from cash to digital payments. There appears to have been a significant increase in contactless payment solutions, such as cards, smartphones, and wearable devices.
  • During the COVID-19 pandemic, approximately one-fifth of consumers subscribed to new products and services to adapt to a changing situation and economic instability, and only a small percentage of consumers in North America canceled or downgraded their existing subscriptions. Furthermore, consumer spending on the top one hundred subscription apps increased by at least 30% globally and more than 25% in the United States. As a result, many online businesses are discovering the benefits of subscription purchasing agreements, such as revenue predictability, which improves future business planning.

Scope of the Report

The North American Payments Market is segmented by Mode of Payment (Point of Sale (Card Payments, Digital Wallet, Cash), Online Sale (Card Payments, Digital Wallet)), and by End-user Industries (Retail, Entertainment, Healthcare, Hospitality). E-commerce payments include online purchases of goods and services such as on e-commerce websites and online booking of travel and accommodation.

The scope of the market excludes online purchases of motor vehicles, real estate, utility bill payments (such as water, heating, and electricity), mortgage payments, loans, credit card bills, or purchases of shares and bonds. As for Point-of-Sale, all transactions that occur at the physical point of sale are included in the scope of the market. It includes traditional in-store transactions and all face-to-face transactions regardless of the location of the transaction. Cash is also considered for both cases (cash-on-delivery for e-commerce sales).

By Mode of Payment
Point of Sale
Card Payments (includes Debit Cards, Credit Cards, Bank Financing Prepaid Cards)
Digital Wallet (includes Mobile Wallets)
Cash
Others
Online Sale
Card Payments (includes Debit Cards, Credit Cards, Bank Financing Prepaid Cards)
Digital Wallet (includes Mobile Wallets)
Others (includes Cash on Delivery, Bank Transfer, and Buy Now, Pay Later)
By End-user Industry
Retail
Entertainment
Healthcare
Hospitality
Other End-user Industries
By Country
United States
Canada

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Key Market Trends

Increasing use of digital wallets payments

  • Digital wallets are becoming increasingly popular among North American e-commerce customers, accounting for 29.2 % of regional transaction value in 2021. Wallets surpass credit cards in the United States in 2022 and are expected to account for nearly one-third of regional e-commerce spending by 2025, led by Apple Pay, Amazon Pay, Google Pay, and PayPal.
  • Mobile wallet usage is growing in the North American payments market, majorly in the united states, with more growth expected as contactless POS terminal penetration grows. Furthermore, credit card use fell in 2021, while debit card use increased. On the other hand, card usage is increasingly shifting to pass-through mobile wallets. In 2021, credit cards will account for 23.9 % of POS transaction value, more than USD 11.1 trillion, led by 40.2 % in North America.
  • While physical cash is becoming less popular, the global shift toward digital payments and alternative currencies has sparked interest in CBDCs (central bank digital currency) in Canada and the United States. The Bank of Canada released a report titled "The Positive Case for a CBDC" in July 2021. The Federal Reserve Bank of the United States "remains fully engaged in CBDC research and policy development."
  • Furthermore, the e-commerce platforms can accept various payment methods, making it easier for more users to access the business, such as major credit cards, gift cards, and so on. E-commerce platforms such as Amazon, eBay, and Shopify frequently charge monthly and transaction fees to cover online payment processing fees.
  • E-commerce sales in the United States are increasing as digital payment experiences improve. This rise reflects consumers' growing comfort with online shopping and their increased use of mobile and handheld devices.
  • The buy-now-pay-later service was gaining popularity among North American consumers as an alternative payment solution. US consumers use BNPL for various reasons, including making purchases that would otherwise be out of their budgets, avoiding credit card interest, and borrowing money without a credit check. BNPL's dramatic global rise continued, doubling its share of North American e-commerce in 2021, rising from 1.6 % to 3.8 % of the transaction value.
North America Payments Market

United States to hold a majority market share

  • Credit cards are the most popular payment method in Canada and the United States, both online and offline, with debit cards coming in second in the latter. Credit card spending in North America exceeds USD 3 trillion annually and is increasing at an annual rate of about 8%. Payment processing fees total approximately USD 85 billion per year.
  • Payments Canada collaborates with the region's leading payment solution providers on the Real-Time Rail Payments system. For example, Payments Canada announced in March 2021 that Interac Corp. had been chosen as the exchange solution provider for Canada's real-time payments system, the Real-Time Rail (RTR). The announcement comes after the Bank of Canada was involved in a selection process.
  • How users access the internet in the united states has a direct impact on the growth of mobile commerce. Users prefer smartphones to PCs for internet browsing because smartphones are less expensive, and high-speed internet is no longer a luxury in many countries.
  • Due to the growth of the digital payment market, mobile commerce has also changed the way brick-and-mortar businesses operate, particularly in terms of accepting cashless payments. Apple Pay, Samsung Pay, and Google Pay, for example, are among the leading competitors competing with market leaders in their respective countries. With consistent increases in mobile payment in several countries, the North American digital payment market is expanding rapidly.
North America Payments Market

Competitive Landscape

The North American Payments market is highly competitive, with key players such as Apple Pay, Samsung Pay, Amazon Pay, Google Pay, and many others in the region developing new e-commerce solutions for a wide range of end-user applications. Companies are also investing and forming partnerships in the continent to expand their businesses and provide e-commerce platforms to the country's people.

  • April 2022 - Dwolla, a fintech company that drives innovation through sophisticated inter-account payment solutions, has announced the release of Virtual Account Number (VAN), a long-awaited feature for connecting banks and fintech. These VANs are a process management tool that allows businesses to manage complex payment workflows.
  • February 2022 - Apple has announced plans to launch Tap to Pay on the iPhone. The new capability aims to enable millions of merchants across the United States, from small businesses to large retailers, to accept Apple Pay, contactless credit and debit cards, and other digital wallet payments with a simple tap on their iPhones and no additional hardware or payment terminal.

Recent Developments

  • June 2022 - Paysafe, a highly specialized payments platform, launched a new plan for its Skrill USA digital wallet on Tuesday that caters to the wagering preferences of high-stakes American online gamblers. The new program, which was first introduced with the PlayUp USA sportsbook, offers enrolled players the highest deposit limits in the US gaming industry.
  • June 2022 - Visa is teaming up with Fundbox, a San Francisco-based working capital platform, to provide financial services for small businesses, including digital payments, cash management, and installment payments for supply purchases. The two companies have introduced the Fundbox Visa Debit Card, which includes tools for managing cash outflows via Fundbox Flex Pay, a spend management product that allows payments for expenses such as travel and supplies.
  • May 2022 - The US Payments Forum announces the formation of its Electric Vehicle (EV) Open Payments Working Committee. The new Working Committee aims to provide consumers seamless and intuitive payment experiences across EV charging stations. The overarching goal is to accelerate the adoption of EVs, EV technology innovations, and successful charging networks that use open payments.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definitions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS

    1. 4.1 Market Overview

    2. 4.2 Industry Stakeholder Analysis

    3. 4.3 Industry Attractiveness-Porter's Five Forces Analysis

      1. 4.3.1 Bargaining Power of Suppliers

      2. 4.3.2 Bargaining Power of Buyers/Consumers

      3. 4.3.3 Threat of New Entrants

      4. 4.3.4 Threat of Substitute Products

      5. 4.3.5 Intensity of Competitive Rivalry

    4. 4.4 Evolution of the payments landscape in North America

    5. 4.5 Key market trends pertaining to the growth of cashless transaction in North America

    6. 4.6 Impact of COVID-19 on the payments market in North America

  5. 5. MARKET DYNAMICS

    1. 5.1 Market Drivers

      1. 5.1.1 High Proliferation of E-commerce, Including the Rise of M-commerce

      2. 5.1.2 Smartphone Growth and Electronic Initiatives in the payment market

      3. 5.1.3 Increase in Real-Time Payments

    2. 5.2 Market Challenges

      1. 5.2.1 Data security risks

    3. 5.3 Market Opportunities

      1. 5.3.1 Transformation to a Cashless Society

      2. 5.3.2 New players in the payment market may drive innovation leading to greater adoption.

    4. 5.4 Key Regulations and Standards in the Digital Payments Industry

    5. 5.5 Analysis of major case studies and use-cases

    6. 5.6 Analysis of key demographic trends and patterns related to payments industry in North America (Coverage to include Population, Internet Penetration, Banking Penetration/Unbanking Population, Age & Income etc.)

    7. 5.7 Analysis of the increasing emphasis on customer satisfaction and convergence of global trends in North America

    8. 5.8 Analysis of cash displacement and rise of contactless payment modes in North America

  6. 6. Market Segmentation

    1. 6.1 By Mode of Payment

      1. 6.1.1 Point of Sale

        1. 6.1.1.1 Card Payments (includes Debit Cards, Credit Cards, Bank Financing Prepaid Cards)

        2. 6.1.1.2 Digital Wallet (includes Mobile Wallets)

        3. 6.1.1.3 Cash

        4. 6.1.1.4 Others

      2. 6.1.2 Online Sale

        1. 6.1.2.1 Card Payments (includes Debit Cards, Credit Cards, Bank Financing Prepaid Cards)

        2. 6.1.2.2 Digital Wallet (includes Mobile Wallets)

        3. 6.1.2.3 Others (includes Cash on Delivery, Bank Transfer, and Buy Now, Pay Later)

    2. 6.2 By End-user Industry

      1. 6.2.1 Retail

      2. 6.2.2 Entertainment

      3. 6.2.3 Healthcare

      4. 6.2.4 Hospitality

      5. 6.2.5 Other End-user Industries

    3. 6.3 By Country

      1. 6.3.1 United States

      2. 6.3.2 Canada

  7. 7. Competitive Landscape

    1. 7.1 Company Profiles

      1. 7.1.1 PayPal Holdings Inc.

      2. 7.1.2 MasterCard Incorporated (MasterCard)

      3. 7.1.3 Dwolla

      4. 7.1.4 Amazon.com Inc.

      5. 7.1.5 Visa Inc.

      6. 7.1.6 Alipay.com Co. Ltd

      7. 7.1.7 Alphabet Inc. (Apple Pay)

      8. 7.1.8 Google Pay (Google LLC)

      9. 7.1.9 Beacon Payments LLC

      10. 7.1.10 Interac Corp.

    2. *List Not Exhaustive
  8. 8. Investment Analysis

  9. 9. Future Outlook of the Market

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Frequently Asked Questions

The North America Payments Market market is studied from 2022 - 2027.

The North America Payments Market is growing at a CAGR of 15.49% over the next 5 years.

PayPal Holdings Inc., MasterCard Incorporated (MasterCard), Dwolla, Amazon.com Inc., Visa Inc. are the major companies operating in North America Payments Market.

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