Payment Processor Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

The Payment Processor Market is Segmented by Type (Credit Cards, Debit Cards, e-Wallet Transactions), and Geography.

Market Snapshot

Payment Processor Market Overview
Study Period: 2018 - 2026
Base Year: 2020
Fastest Growing Market: Asia Pacific
Largest Market: North America
CAGR: 10.7 %
Payment Processor Market Major players

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Market Overview

The changing aspects in the payments industry are fluctuating as businesses and consumers change dollars from cash and checks to digital payment approaches. Cards dominate the in-store retail channel, but mobile wallets are seeing a quick uptick in practice. At the same time, e-commerce will take away at brick-and-mortar retail as smartphones attract a growing part of digital shopping. When it comes to cyberattacks, eCommerce is an extremely vulnerable industry due to the sensitive information exchanged on websites. According to ecommerce-platforms.com, 32.4% of all cyber-attacks are carried out on eCommerce websites.

  • Major driving factors that are expected to drive the global payment processing market are the rising government initiatives for the promotion of digital and online payments, increased production of smartphones, improving customer experiences, and their demand for the imminence of payments and settlements. The quantity of online transactions globally across trades is proliferating. It is asserted in the world payment report 2019 that non-cash transactions had reached 539 billion in 2017, growing at 12%. According to retail tech news, e-commerce retailing includes almost 12% of the total retail industry.
  • Besides, debit cards, credit cards, and credit transfer accounted for 17%, 11%, and 10% respectively in top growth in non-cash payment instruments. The enraged demand for online retailing globally is expected to drive online payment, thereby propelling the payment processor market over the forecast period. Credit card remains to be the preferred way to pay in department shops, most possibly owing to people who choose a credit card for procurements in a higher value. On the other side, strict regulations in the payment industry and the growing cases of cyber-attacks and data breaches are restraining the growth to an extent.
  • With businesses across the board witnessing a sharp slowdown owing to COVID-19, the digital payments sector is supposed to have registered a decline of around 30% in transaction value over the past few weeks, according to Economic Times. For instance, transactions on the platform BharatPe, a QR-code based payments startup, have reduced by nearly 10%-15% due to COVID-19. Aviation, which adds almost one-fourth of all online digital transactions, has seen a drop of nearly 40% due to cancellations and refunds because of restrictions on international travel.
  • Besides, according to Mercury Processing Services International, consumers are increasingly ready to embrace digital wallets and contactless payments. New research suggests traditionally distrustful US consumers are becoming more interested in contactless payments, while in Germany, more than half of payments currently made by card are contactless, compared with 35% before the coronavirus crisis hit. Online payment transaction volume is surging as consumers confined to their homes are turning to digital purchasing channels. Global e-commerce transactions were up 23% in mid-March compared with average weekly size.

Scope of the Report

A payment processor handles the credit card transaction means by serving as the medium between the merchant and the financial institutions associated. A processor can approve transactions and works on retailers getting paid on time by helping the transfer of funds. Some processors give equipment for card acceptance, PCI compliance assistance, customer support, security solutions, and other value-added services.

Type
Credit Cards
Debit Cards
e-Wallet Transactions
Geography
North America
Europe
Asia-Pacific
Latin America
Middle-East and Africa

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Key Market Trends

Credit Card Segment to Hold the Largest Payment Processing Market size

  • Credit card processors are the messengers that promote communication among the merchant and the cardholder's bank. They are accountable for securing payment data and making sure all transactions adhere to laws set out by the Payment Card Industry Data Security Standard (PCI DSS). Credit card processors get a fee from merchants for giving this service. Examples of credit card processors include PayPal, Stripe, Square, and Authorize.net. Credit card payment processing works in three distinct processes: Authorization, Settlement, and Funding.
  • According to World Payment Report 2019, global non-cash transactions grew at 12% to reach 539 billion during 2016-17. In WPR 2019, the growth in the credit card payment increased by 11%. Credit card remains to be the preferred way to pay in department shops, most possibly owing to people who choose a credit card for procurements in a higher value.
  • Credit card transactions are processed through a variety of platforms, including brick-and-mortar stores, e-commerce stores, wireless terminals, and phone or mobile devices. The entire cycle - from the time of sliding card through the card reader until a receipt is produced - takes place within two to three seconds.
Payment Processor Market Trends

APAC to Hold the Dominant Market Share During the Forecast Period

  • Asia-Pacific is dominating other regions in terms of the adoption of the online transaction. According to the World Payments Report, 2019, Asia is expected to maintain its most meaningful growth trajectory with an approximated CAGR of 30% from 2017-2022F. Adoption of QR-code based payments has quickened the cashless revolution in Asian Markets.
  • These countries in APAC have invested significantly in Research and Development (R&D) activities, thereby contributing to the development of innovative technologies. The payment processing solutions market in APAC is extremely competitive, as nations such as China and India are focused on R&D and modernization. These countries are immediate adopters of technologies in several verticals.
  • The success experienced by mobile wallets in recent years - based on Alibaba and Tencent platforms - will continue. However, legacy players are reacting, and contactless cards are gaining traction in emerging Asia, where acceptance networks are in place. Digital payments in countries like India are booming owing to the favorable regulatory environment, infrastructure upgrade, deepening smartphone penetration.
  • Also, China has increased its mobile and online payment services through scaling the internet penetration in the rural regions of the country, which would not only boost the customers to buy online but also heighten the payment processors solutions, Alipay in particular, thereby, propelling the market growth.
Payment Processor Market Growth

Competitive Landscape

Presently, the market is highly consolidated and consists of several major players, such as PayPal Holdings Inc., Due Inc., and Stripe. However, other firms are trying to cope with the market share and executing mergers and acquisitions to obtain more customers and market share.

  • January 2020 - UnionPay International (UPI) and PayPal announced a global partnership where both companies will work together to accelerate the growth of their networks. As part of the agreement, PayPal has committed to supporting UPI acceptance globally, where PayPal is accepted – giving UnionPay cardholders more choice when shopping.
  • January 2020 - Adyen, announced that Subway selected it as its payments partner for North America. Adyen will support Subway, the world’s largest quick-service restaurant by restaurant count, and its Franchise Owners in creating a simpler and more customer-centric payments experience in-restaurant, online, and through the Subway App.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Deliverables

    2. 1.2 Study Assumptions

    3. 1.3 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Overview

    2. 4.2 Introduction to Market Drivers and Restraints

    3. 4.3 Market Drivers

      1. 4.3.1 High Proliferation of Digital Initiatives

      2. 4.3.2 Growing Bargaining Leverage of Consumers with Buying Firms

      3. 4.3.3 Favorable Government Regulations Coupled with Key Innovations Playing a Key Role in Driving Credit/Debit Transactions

    4. 4.4 Market Restraints

      1. 4.4.1 Lack of a Standard Legislative Policy across the Globe

      2. 4.4.2 Privacy and Security Concerns

    5. 4.5 Industry Value Chain Analysis

    6. 4.6 Industry Attractiveness - Porter's Five Force Analysis

      1. 4.6.1 Threat of New Entrants

      2. 4.6.2 Bargaining Power of Buyers/Consumers

      3. 4.6.3 Bargaining Power of Suppliers

      4. 4.6.4 Threat of Substitute Products

      5. 4.6.5 Intensity of Competitive Rivalry

    7. 4.7 Evolution of Payment Processing Infrastructure

    8. 4.8 Analysis of the Key Pricing Models Currently Adopted by Payment Processors

    9. 4.9 Market Opportunities

      1. 4.9.1 Recent Changes in the Global Scenario Expected to Further Drive the Demand for Digital Transactions

      2. 4.9.2 Favorable Changes in the Overall Financial Service Infrastructure

    10. 4.10 Assessment of Impact of COVID-19 on the Industry

  5. 5. MARKET SEGMENTATION

    1. 5.1 Type

      1. 5.1.1 Credit Cards

      2. 5.1.2 Debit Cards

      3. 5.1.3 e-Wallet Transactions

    2. 5.2 Geography

      1. 5.2.1 North America

      2. 5.2.2 Europe

      3. 5.2.3 Asia-Pacific

      4. 5.2.4 Latin America

      5. 5.2.5 Middle-East and Africa

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Company Profiles

      1. 6.1.1 PayPal Holdings Inc.

      2. 6.1.2 Due Inc.

      3. 6.1.3 Stripe

      4. 6.1.4 Adyen

      5. 6.1.5 Square Inc.

      6. 6.1.6 Flagship Merchant Services

      7. 6.1.7 Payline Data Services LLC

      8. 6.1.8 Wirecard AG

      9. 6.1.9 Paysafe Group Limited

      10. 6.1.10 First Data Corporation

      11. 6.1.11 Global Payments Inc.

      12. 6.1.12 BitPay

      13. 6.1.13 CCBill LLC

      14. 6.1.14 Braspag

      15. 6.1.15 Banwire SA de CV

      16. 6.1.16 Tutuka Software (Pty) Ltd

      17. 6.1.17 Galileo Financial Technologies

      18. 6.1.18 Marqeta Inc

    2. *List Not Exhaustive
  7. 7. INVESTMENT ANALYSIS

  8. 8. MARKET OPPORTUNITIES AND FUTURE TRENDS

**Subject to Availability

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Frequently Asked Questions

The Payment Processor Market market is studied from 2018 - 2026.

The Payment Processor Market is growing at a CAGR of 10.7% over the next 5 years.

Asia Pacific is growing at the highest CAGR over 2021- 2026.

North America holds highest share in 2020.

PayPal Holdings, Inc., Due Inc., Stripe, Adyen, Square, Inc. are the major companies operating in Payment Processor Market.

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