The global payment security market size was estimated at USD 15.79 billion in 2017. It is expected to expand at a CAGR of 12.3% over the forecast period. Booming e-commerce and retail industry in Asia Pacific, need for PCI DSS compliance, increasing spending of consumers on travel and hospitality, and advent of artificial intelligence (AI) and machine learning are among the key trends stimulating market growth.
In addition, increasing adoption of electronic transactions and emergence of mobile-based payments such as Android pay and Apple pay and e-wallets such as Google wallet are projected to provide a fillip to the market.
Emergence of Internet of Things (IoT) is leading to several connected devices and wearables being fortified with payment capabilities. For instance, MasterCard has launched a platform to turn an array of consumer products, such as wristbands, key fobs, and jewelry, into payment devices. Visa Inc., is working on a connected car solution that will allow consumers to pay for various amenities such as fuel, parking, eateries, and others from the vehicle.
IoT is helping in improving the accuracy of financial rules and data modeling. Machine learning has reorganized traditional methods for payment transaction infrastructure. This helps in securing data and deliver protection to consumers while conducting online transactions, which is further likely to boost the growth of the market over the next few years.
Payment security providers are involved in research and development (R&D) and are focused on deriving other advanced solutions to provide payment security. The U.S. is an established consumer market and is focused on innovation. Companies such as PayPal and Apple Inc. have a strong presence in the region.
Chatbot is the most recognized application of AI in financial services. Chatbots have covered a wide range of industries and financial institutions. They have helped in reducing frauds and secure card and other payment data and reduce the complexity with multiple customers at a single point-of-time. Numerous banks and Fintech companies are utilizing chatbots for e-commerce and customer service applications. Deep learning and other artificial intelligence approaches are rapidly emerging as promising solutions to keep up with threats. Various market players such as PayPal is currently using AI to augment payment security.
Encryption, tokenization, and fraud detection & prevention play a vital role in securing consumer card data by converting the name and digits into various tokens or encrypting it through algorithms. Fraud detection & prevention is the most widely used payment security solution. It provides various fraud analytics solutions such as big data analytics, social media analytics, customer analytics, behavioral analytics, predictive analytics, and governance, risk, and compliance solutions among others. These solutions are an important aspect of every electronic transaction taking place.
The segment was valued at USD 8.07 billion in 2017. Encryption solutions are poised to exhibit the highest CAGR of 12.8% during the forecast period. With the usage of point-to-point encryption (P2PE), card data is encrypted into a series of numbers. Due to budget constraints, small and medium enterprises are not able to invest in fraud detection and prevention solutions. On the other hand, soaring need for retail and e-commerce startups to secure transaction data is providing an upthrust to investments in encryption and tokenization solutions.
Payment security is important for enterprises, which have card not present (CNP) payments and electronic transactions. Increasing mobile and POS transactions are giving rise to payment security concerns and frauds. These electronic transactions require lower transaction fees, use of cryptographic algorithms for better transaction security, and faster transaction settlement and relief from heavy chargebacks and purchase returns.
The POS-based platform segment is likely to be at the forefront of the market throughout the forecast period. Growing consumer interest, ease, and comfort in online shopping, and other conveniences are resulting in significant growth in the POS-based platform.
Payment security providers are utilizing different AI-based tools for various purposes such as fraud detection and customer interaction. It helps in rapid analysis, prediction, and processing of threats and frauds in a system. This helps providers in offering fraud detection & prevention solutions and delivering accurate diagnosis to threats and data breaches occurring in the system.
Large enterprises held the leading share in the payment security market in 2017. Transactions of high valuations happening every day in large enterprises are compelling them to opt for premium payment security solutions.
The small and medium enterprises segment had a valuation of USD 4.79 billion in 2017. The segment is projected to post a higher CAGR during the forecast period. Small and medium enterprises are increasingly adopting these solutions such as encryption and tokenization. Payment security is equally important to SMEs as they are also prone to cyber-attacks and may lose financial information of company, and other important documents.
The retail and e-commerce industry will be the leading revenue contributor throughout the forecast period. It accounted for of 28.0% of the overall market in 2017. Rising smartphone usage, adoption of 4G technology, and increasing consumer spending power are escalating the adoption of payment security solutions across the retail and e-commerce industry.
The travel & hospitality and media & entertainment industries are estimated to register a noteworthy CAGR during the forecast period. Increasing consumer spending and growing use of mobile payments and e-wallets are some of the factors contributing to market growth.
The North America region is expected to hold the largest share in the overall market while Asia Pacific is anticipated to exhibit the highest CAGR over the forecast period. The growth in APAC can be attributed to widening base of retail & consumer goods startups across countries such as China, India, and Japan. Acceptance of mobile payments by consumers is resulting in increased adoption of digital payments across the region. Flourishing retail industry in China is one of the primary growth stimulants for the regional market.
The U.S. is at the forefront of growth in the North America market. With some of the prominent market players, such as Paypal, Bluefin, Braintree, and Elavon, headquartered, the region will continue to dominate the arena throughout the forecast horizon. Also, the major players in the market among others have their presence in the region.
Some of the key companies operating in the market are Ingenico, Braintree, Bluefin, Index, Elavon, MasterCard, and CyberSource (Visa Inc.). Payment security providers and others payment related companies are also adopting Artificial Intelligence (AI) and machine learning solutions. For instance, PayPal is involved in providing AI-based solutions.
Companies have adopted various key strategies such as partnerships, mergers and acquisitions, and new product launches. For instance, in April 2018, MasterCard partnered with IFC (a member of World Bank Group), to drive financial inclusion, updating a USD 250 million global risk-sharing facility to expand access to electronic payments in emerging markets.
Base year for estimation
Actual estimates/Historical data
2014 - 2016
2018 - 2025
Revenue in USD Million and CAGR from 2018 to 2025
North America, Europe, Asia Pacific, South America, Middle East & Africa
U.S., Canada, Mexico, U.K., Germany, France, Italy, Spain, Poland, Sweden, Turkey, China, India, Japan, South Korea, Singapore, Taiwan, Malaysia, Thailand, Indonesia, Australia, Brazil, Argentina, U.A.E., Saudi Arabia, Egypt
Revenue forecast, company share, competitive landscape, growth factors and trends
15% free customization scope (equivalent to 5 analyst working days)
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This report forecasts revenue growth at global, regional, & country levels and provides an analysis on the industry trends in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the global payment security market report on the basis of solution, platform, organization, application, and region:
Solution Outlook (Revenue, USD Million, 2014 - 2025)
Fraud Detection & Prevention
Platform Outlook (Revenue, USD Million, 2014 - 2025)
Organization Outlook (Revenue, USD Million, 2014 - 2025)
Small and Medium Enterprises
Application Outlook (Revenue, USD Million, 2014 - 2025)
Retail & Ecommerce
Travel and Hospitality
Telecom & IT
Media & Entertainment
Regional Outlook (Revenue, USD Million, 2014 - 2025)
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