Payment Processing Software Market - Forecast(2024 - 2030)
Payment Processing Software Market Overview
Payment
Processing Software market size is estimated to reach $68.7 billion by 2026 at
CAGR of 9.6% during the forecast period 2021-2026. Increasing use of digital wallets,
mobile banking, credit and debit cards for online transaction, along with
worldwide growth of ecommerce sector, has accelerated the growth of this Payment
Processing Software industry globally. In addition, the market will also be
driven by innovation in payment technology using block chain, the Internet of
Things (IoT), Artificial Intelligence (AI), and real-time payments. In 2021, a Payment
Processing Software company, NetCents Technology Inc., developed a block chain
platform designed for merchants and consumers looking for a better way to transact
online with cryptocurrency. Further innovations in security technologies such
as tokenization of card details for eliminating fraud is expected to create
growth opportunities in the coming years. Similarly, developments in digital
payment methods and payment gateway will drive the market growth in the
forecast period. Furthermore increasing government initiatives, in order to
promote the digital economy and curb the usage of cash, have resulted in
increased transactions through e-wallets and point of sale machines. In August
2021, Reserve Bank of India (RBI) announced the availability of National
Automated Clearing House (NACH) on all days of the week. Hence these factors
are analyzed to drive the Payment Processing Software industry outlook in the
forecast period 2021-2026.
Report Coverage
The
report: “Payment Processing Software Market
– Forecast (2021-2026)”, by IndustryARC covers an in-depth analysis of the
following segments of the payment processing software market.
By Mode of payment: Debit card, Credit card,
e-wallets and others.
By Deployment: On-premise, Cloud.
By Organization size: small and medium enterprises, large
enterprises.
By
Platform: Browser-based,
App-based.
By Technology: BHMI-UPI, QR code, Near-field communication (NFC), Magnetic secure transmission (MST), EMV cards, RFID and others.
By End User industry:
BFSI, Retail & e-commerce, Healthcare, Education, transportation &
logistics, Hospitality and others.
By Geography:
North America
(U.S, Canada, Mexico), Europe (Germany, UK, France, Italy, Spain, Russia and
Others), APAC (Japan, China, India, South Korea, Australia and Others), South
America (Brazil, Argentina and others) and RoW (Middle east and Africa).
Key Takeaways
- North America dominated the market by a market share of more than 32.7% in 2020, early adoption for new technologies and increasing adoption of online payment methods are the key factors contributing to the market growth.
- The spread of the coronavirus and governments’ subsequent reaction has led to a surge in the adoption in contactless payment methods such as card and mobile payments
- Retail & e-commerce is the fastest growing segment among the other end-user industry segment, growing at a CAGR of 10.5% in the forecast period, the wide availability of smartphones, coupled with increasing usage of mobile wallet apps.
- Cloud deployment is growing at a highest CAGR of 10.8% in the forecast period as it offers operational flexibility and real-time deployment to the companies compared to on-premises solutions. It also offers numerous benefits, including reduced operational costs, simple deployment process, and higher scalability in terms of connected resources.
Payment Processing Software Market, by Geography, 2020
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Payment
Processing Software Market Segment Analysis - By Mode of Payment
Cloud deployment is growing at a highest CAGR of 10.8% in the forecast
period as it offers operational flexibility and real-time deployment to the
companies compared to on-premises solutions. It also offers numerous benefits,
including reduced operational costs, simple deployment process, and higher scalability
in terms of connected resources. The cloud-based customer self-service software
comprises of applications with a set of multiple services that are compliant with
the service-oriented architecture and provide robust transformation processes
to meet business objectives. Additionally, the cost-effective cloud-based
solutions ease installation when compared to the on-premises solutions. Further
several companies have been developing processing software in cloud deployment.
In 2019, Silicus Technologies, LLC developed a payment processing system
leveraging modern application architectures developed and deployed natively in
the Cloud. Furthermore, the highest level of data security and reliability
offered by the cloud deployment are increasing the share of cloud deployment in
the Payment Processing Software market in the forecast period 2021-2026.
Payment Processing Software Market Segment Analysis - By End-User Industry
Retail & e-commerce is the fastest growing segment among the other
end-user industry segment, growing at a CAGR of 10.5% in the forecast period, the
wide availability of smartphones, coupled with increasing usage of mobile
wallet apps, is also contributing to segment market growth. In addition the
mass adoption of ecommerce and online shopping has enhanced the growth of
digital payments during the Covid-19 pandemic. Moreover several consumers are
increasingly moving away from cash and opting for contact-free and digital
payments. In 2020, MasterCard Spending Pulse has reported record growth
rates across the globe as consumers increasingly attracting towards e-commerce
websites. It has reported that MasterCard Spending Pulse grew by 93% year-over-year
in the month of May 2020 and is expected to grow at a similar phase during the
forecast period. Further the growing e-commerce industry in countries such as
India, China, Srilanka, Japan and so on coupled with expanding consumer base,
is expected to contribute to market growth. In Sri Lanka e-commerce giants like
Takas, Wow and MogoSuper are starting to offer digital payment options as the
primary methods of making payments. In India the market has seen explosive
adoption over the last five years and the Covid-19 pandemic has further
accelerated this trend. Furthermore government and private firms are working
hard to bring more of Indian’s population online through initiatives like
Digital India. Many E-commerce companies across the globe have stopped are
planning to stop cash transactions in the forecast period. In 2020, Paytm had
stopped cash-on-delivery (COD), a popular payment mode and a mainstay of e-commerce
transactions in India. According to RBI, the consumers shifted towards digital
methods of transactions such as debit cards, credit cards, e-wallets and other
various mobile payment modes is expected to reach a daily average
of 1.5 billion in the next 5 years. Consequently, the net value of digital
payments in India will also increase from its current value of $70 billion to
$200 billion by 2025. Hence, the above mentioned factors are analyzed to drive
the Payment Processing Software market share in the forecast period 2021-2026.
Payment Processing Software Market Segment Analysis - By Geography
North America dominated the market by a market share of more than 32.7%
in 2020 and is estimated to witness a significant amount of growth during the
forecast period 2021-2026, owing to early
adoption of technology, growing penetration of internet and online transaction
methods. In June 2020, FBI published a report, according to which 75% Americans
used different banking apps last year and the numbers had increased by 8% in
just two months. In addition to this, presence of major market players and their
business strategies for development of payment processing software is fuelling
the market growth of this region. In July 2019, by acquiring First Data
Corporation, Fiserv became one of the major providers of payment and financial
technology provider. Moreover, companies such as PayPal, Amazon and so on have
been offering real time payments. In 2020, Visa Inc. and PayPal shared details
about an extension of their global partnership, which will expand real-time
access to funds for consumers and small businesses that are sending or
receiving money via PayPal, Venmo or Xoom. Amazon, Apple and Google are also
supporting a real-time payments network in the U.S. led by the Federal Reserve.
Hence these factors are analysed to drive the Payment Processing market share
in the forecast period 2021-2026.
Payment Processing Software Market Drivers
Initiatives provided by governments across the globe is driving the market growth:
Governments of several countries are pushing
players in the banking and payments ecosystem to encourage cashless payments at
merchant outlets through digital payments. The Government of India has launched
various initiatives to help promote digital payments. Initiatives such as
Digital India, the launch of Unified Payments Interface (UPI) act as catalysts
in the shift towards digital payments. In 2021, the government has committed to
spend more than $200 million in the coming year to incentivize digital payments
adoption in the country. These initiatives help promote digitalization and
increase awareness about the advantages of the use of new technologies. Moreover, government of countries such as U.K, Kenya are collaborating with several local
players to push the growth of the market. In 2020, Judopay had partnered with
UK government to drive adoption of digital payments across the public sector in
the country. Similarly in Kenya, the local mobile phone company Safaricom with
the support of government has pushed the envelope and created a system known as
M-Pesa to allow customers to make payments directly from their phones. Hence
government initiatives that promote digitalization and usage of digital payment
platforms are anticipated to contribute to the Payment Processing Software market
growth in the forecast period 2021-2026.
Rise in the adoption of contactless payments owing to Covid-19 pandemic is analysed to drive the market:
The
spread of the coronavirus and governments’ subsequent reaction has led to a
surge in the adoption in contactless payment methods such as card and mobile
payments. According to a report given by the Payments Journal in
March 2020, there has been a 30% increase in the use of contactless payments
since the outbreak of the pandemic. In Germany, contactless payments increased
from 35% to more than 50% as a result of the pandemic. Similarly, the US saw the
largest absolute rise in contactless adoption, with 46 percent of American
responding they had a contactless payment method up from 38 percent
previously. In U.K, the number of respondents who indicated contactless as
their preferred payment method rose nine points from 50 percent pre-coronavirus
to 59 percent. Moreover several companies have also witnessed significant
growth in number of users. For instance, according to the report given by
Paytm, the company has witnessed 20% growth in the digital payments as compared
to the regular days. Also, since February 2020, the company also witnessed an
increase in the number of users visiting the Paytm app and the number of
sessions per user. Moreover in 2020, Accenture predicts $7 trillion in
consumer spending will shift from cash to cards and digital payments by 2023.
Hence rise in adoption of contactless payment will drive the Payment Processing
Software industry growth in the forecast period 2021-2026.
Payment Processing Software Market Challenges
Increasing Cyber Threats, data breaches across various sectors which is acting as a major challenge in hampering the market growth
With growing
penetration of payment processing software and rapid digitalization, the
security threats are also rising exponentially. The increasing number of
cyber-attacks, data braches and other security threats across various sectors
is a major challenge for this market. In January 2020, 15,000 credit and debit
cards were cancelled by Alpha Bank, Piraeus Bank, Eurobank and the National
Bank of Greece after a tourist service portal was hacked. In January 2021, Juspay,
a mobile payment solution provider, had suffered a massive attack which exposed
the data of 10 crore card holders. This type of data breaches and cyber-attacks
triggers the question regarding the organization’s security system. Apart from
that, in the current situation, a sudden rise in usage rare of digital
platforms for various payment services in different sectors has increased due
to global pandemic which is a lucrative opportunity for the cyber-attackers. Hence the growing cyber-attacks hamper
the Payment Processing Software market growth in the forecast period 2021-2026.
Payment Processing Software Market Landscape
Technology launches, acquisitions,
Partnerships and R&D activities are key strategies adopted by players in the Payment Processing Softwaremarket. In 2020, the
market of Payment Processing Software industry outlook has been fragmented by
several companies. Payment Processing Software top 10 companies include:
- Adyen
- Alphabet Inc.,
- BlueSnap
- First Data Corporation
- Global Payments PayU
- Jack Henry & Associates Paysafe
- PayPal Holdings Inc.
- Stripe
- Square Inc.
- Visa Inc.
- Fisrev, Inc.
Acquisitions/Technology Launches/Partnership
- In January 2020, PayPal partnered with UnionPay International (UPI) to accelerate their network growth. According to the partnership agreement, PayPal offered its support for global acceptance of UPI.
- In July 2019, FIS, Inc.had acquired Worldpayto become a leader in technology and solutions provider for merchants, banks, and capital markets.
Relevant Report Titles:
Contactless Payment Market
Report Code: ITR 0064
Digital Payment Market
Report Code: ITR 53630
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