Digital Payment Market Size, Share & Trends Analysis Report By Solution, By Mode Of Payment (Point Of Sales, Digital Wallets, Net Banking), By Deployment, By Enterprise Size, By End-use, And Segment Forecasts, 2021 - 2028

Report Overview

The global digital payment market size was valued at USD 58.30 billion in 2020. It is expected to expand at a compound annual growth rate (CAGR) of 19.4% from 2021 to 2028. The market is expected to benefit from the high adoption rate of smartphones, rise in e-commerce sales, and improved internet penetration globally. Governments across the globe are undertaking initiatives to digitize payments. This is promoting economic growth and is benefitting end-users in many countries across the globe. For instance, in February 2019, the central bank of Mexico announced the launch of its smartphone payment system, known as CoDi, to reduce cash transactions in the country.

Various government bodies across the world are making efforts to increase the adoption of digital payments. For instance, in November 2020, Judopay, a mobile-centric payment solution provider, announced its partnership with the U.K. government to drive the adoption of digital payments in the public sector. Through this initiative, Judopay is offering payment solutions to customer organizations that fall under Crown Commercial Service Payment Acceptance Framework. In December 2019, the Japanese government created a subsidy for promoting digital payment in the country. Under this initiative, customers gained shopping points worth up to 5% of their shopping value for utilizing cashless payment methods.

Facial recognition technology is gaining popularity worldwide. Various companies are making efforts to provide facial recognition-based payment methods to retail stores. For instance, in October 2019, SnapPay, Inc., a payment solution provider, announced the launch of its facial recognition-based payment technology for merchants based in North America. Additionally, in August 2020, PopID, a facial recognition technology provider, announced the deployment of facial recognition technology in the U.S. restaurants in Pasadena, a city in California. This technology is helping merchants minimize a customer's checkout time at retail stores.

Increasing e-commerce sales worldwide is also one of the major factors driving the market growth in recent days. Nowadays, people across the world are increasingly using contactless cards and mobile payment solutions for making online payments. According to the survey conducted by Episerver, a software company, in 2019, 38% of the U.K. customers preferred buying online compared to countries such as the U.S. (26%), Australia (21%), Benelux (22%), Sweden (20%), and Germany (20%). According to a study conducted by FIS, an information technology & service provider in the U.K., 45% of debit card transactions and 32% of credit card transactions are made using contactless cards for purchasing goods online.

The COVID-19 pandemic has positively impacted the market growth owing to a steep rise in online sales and the increasing use of online payment solutions. Customers across the world have shifted from offline shopping to online shopping during the pandemic. According to the study conducted by Alvarez & Marsal, a management consulting company, approximately 17.2 million European consumers are expected to shift from offline to online shopping to reduce the risk of COVID-19. Due to this change in buying patterns, online sales in the U.K. increased by USD 5.47 billion in 2020.  

Solution Insights

The payment processing segment dominated the market in 2020 and accounted for more than 25.0% share of the global revenue. The increasing preference for online shopping worldwide is prompting retailers to adopt payment processing solutions to provide customers with seamless checkout experiences. Players providing payment processing solutions are focusing on mergers and acquisitions and partnerships for strengthening their market presence. For instance, in July 2019, Red Dot Payment, a payment solution provider, was acquired by PayU to expand its presence in Singapore.

The application program interface segment is anticipated to register the highest growth rate over the forecast period. An application program interface enables integration with various industry-specific payment platforms, online payment platforms, digital card payment platforms, and cryptocurrency digital wallets, among others. Companies such as Venmo, PayTM, PayPal, and PayMaya Checkout are trying aggressively to create payment-based APIs for integrating multiple modes of payments. For instance, the API offered by PayTM integrates payment features in e-commerce applications and helps companies in improving customer experience.

Mode of Payment Insights

The point of sales segment dominated the market in 2020 and accounted for more than 52.0% share of the global revenue. Point of sales includes the systems used by retail stores for processing transactions. Point of sales provides benefits such as fast checkout options, customized customer experience, and multiple payment options. Various retailers and restaurants adopt the point of sales mode of payment for enhancing customers' payment experiences. For instance, in January 2020, Grubhub, an online food ordering company, announced its partnership with ParTech Inc., a point of sales solution provider, to integrate point of sales solutions in its food ordering process.

The net banking segment is expected to register the highest CAGR over the forecast period. The benefits offered by net banking, such as enhanced time efficiency, ease of banking, and activity tracking are some of the major factors driving the segment growth. Various countries worldwide are witnessing an increase in internet banking users in recent days. Increasing internet penetration is also one of the factors driving the segment growth. According to the statistics provided by eMarketer, approximately 80% of the U.S. internet users accessed their bank accounts digitally in 2020.

Deployment Insights

The on-premise segment dominated the market in 2020 and accounted for more than 65.0% share of the global revenue. The on-premise deployment of digital payment solutions provides organizations with complete control over applications and systems, which can be easily managed by the organization's IT staff. At the same time, organizations use on-premise digital payment solutions to keep applications and systems secure from malicious threats. For instance, in November 2019, Microsoft announced its collaboration with ACI Worldwide. The collaboration offered advantages such as ease in long-term capital expenditure and improved security to on-premises customers of ACI Worldwide.

The cloud segment is anticipated to register the highest CAGR over the forecast period. The continued rollout of smart cities and the rising number of unmanned retail stores are some of the major factors propelling the growth of the segment. Simultaneously, the growing use cases of IoT in payment are expected to create new growth opportunities for the segment in the coming years. According to Bambora, 20.4 billion devices were connected to IoT in 2020, owing to which, companies are trying to improve the features of IoT-based payments.

Enterprise Size Insights

The large enterprises segment dominated the market in 2020 and accounted for more than 60.0% share of the global revenue. Large retail stores witness a large number of footfalls, which creates the demand for digital payment solutions for seamless checkouts. Digital payment solutions ensure a convenient checkout process for the customers by supporting various digital payment methods, such as smart banking cards, point of sales, and e-wallets. At the same time, retailers are also focusing on providing innovative payment solutions for customers. For instance, in October 2020, Klarna announced its partnership with Afterpay to provide Buy Now Pay Later services for online customers.

The small & medium enterprises segment is anticipated to register the highest growth rate over the forecast period. Small & medium enterprises are shifting from paper-based invoicing to digital invoicing, as paper-based billing systems tend to be expensive, prone to errors, and inefficient. Payment partners are focusing on partnerships with small & medium enterprises to support them in digitizing their payment systems. For instance, in October 2019, Armatic, an invoicing automation solution provider, was acquired by BlueSnap, a payment technology company. This acquisition enabled BlueSnap to enhance its digital payment solutions.

End-use Insights

The BFSI segment dominated the market in 2020 and accounted for more than 23.0% share of the global revenue. An increase in remittances to low- and middle-income countries is expected to be one of the major factors generating new opportunities for market growth over the forecast period. Moreover, banks are also enhancing their offerings to compete with digital payment solutions providers such as Google, Amazon, and Facebook. For instance, in June 2019, Bank of America introduced a digital debit card to offer convenience to its clients.

The retail and e-commerce segment is anticipated to register a significant growth rate over the forecast period. The growing e-commerce sales is one of the major factors boosting the growth of the digital payment market. Additionally, the rising number of unmanned retail stores worldwide is also driving the segment growth. According to a study conducted by Televisory, China’s unmanned retail industry reached USD 503.25 million in 2020.

Regional Insights

North America dominated the digital payment market in 2020 and accounted for over 35.0% share of the global revenue. The factors driving the demand for digital payment solutions in the North American region are the increasing deployment of smart parking meters and technology enhancements in these meters. For instance, in December 2017, the San Francisco Municipal Transportation Agency announced the implementation of a “demand-responsive pricing” program on 28,000 smart parking meters. Moreover, the growing number of unmanned stores in the U.S. is creating the demand for digital payment solutions. For instance, in November 2019, Ahold Delhaize, a Netherlands-based supermarket, announced the opening of its cashier-less store in the U.S.

Europe is expected to emerge as the fastest-growing regional market over the forecast period. Banks in Europe are making efforts to launch a European payment initiative. This initiative will be aimed toward creating a unified payment solution for merchants and consumers across Europe. Such initiatives are expected to create new growth opportunities for the market players over the forecast period. Additionally, the digital campaign launched by the Italian government to increase electronic payments in the country is also propelling the regional market growth.

Key Companies & Market Share Insights

The competitive landscape of the market is highly fragmented in nature. The market players are focused on strategies such as partnerships, joint ventures, product innovation, research and development, and geographical expansion to strengthen their market positions. Merchants are adopting on-premise digital payment solutions owing to security-related benefits. The on-premise digital payment solutions help enterprises improve their security level and thereby increase the level of customer satisfaction.

The market players are focused on enhancing their product offerings to better cater to the changing needs of users and stay competitive. For instance, in October 2020, Aliant Payments announced that the Cryptobucks cryptocurrency payment mobile app, powered by Aliant Payments, added XRP to its platform. XPR would be available for both Android and iOS mobile apps. With the addition of XRP, the CryptoBucks app would allow merchants to accept Bitcoin Cash, Bitcoin, Ethereum, and Litecoin payments both online and in-store. Some of the prominent players in the digital payment market are:

• Aliant Payments

• Aurus Inc.

• Adyen

• Financial Software & Systems Pvt. Ltd.

• PayPal Holdings Inc.

• Novatti Group Pty Ltd.

• ACI Worldwide, Inc.

• Global Payments Inc.

• Wirecard

• Authorize.Net

Digital Payment Market Report Scope

Segments Covered in the Report

The report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2028. For this study, Grand View Research has segmented the global digital payment market report based on solution, mode of payment, deployment, enterprise size, end-use, and region.

• Solution Outlook (Revenue, USD Billion, 2016 - 2028)

  • Application Program Interface

  • Payment Gateway

  • Payment Processing

  • Payment Security & Fraud Management

  • Transaction Risk Management

  • Others

• Mode of Payment Outlook (Revenue, USD Billion, 2016 - 2028)

  • Bank Cards

  • Digital Currencies

  • Digital Wallets

  • Net Banking

  • Point of Sales

  • Others

• Deployment Outlook (Revenue, USD Billion, 2016 - 2028)

  • Cloud

  • On-premise

• Enterprise size Outlook (Revenue, USD Billion, 2016 - 2028)

  • Large Enterprises

  • Small & Medium Enterprises

• End-use Outlook (Revenue, USD Billion, 2016 - 2028)

  • BFSI

  • Healthcare

  • IT & Telecom

  • Media & Entertainment

  • Retail & E-commerce

  • Transportation

  • Others

• Regional Outlook (Revenue, USD Billion, 2016 - 2028)

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • U.K.

  • Asia Pacific

    • China

    • India

    • Japan

  • Latin America

    • Brazil

  • Middle East & Africa