The digital payments market reached a value of nearly $83,531.1 million in 2020, having increased at a compound annual growth rate (CAGR) of 4.2% since 2015. The market is expected to grow from $83,531.1 million in 2020 to $125,014.4 million in 2025 at a rate of 8.4%. The market is then expected to grow at a CAGR of 8.1% from 2025 and reach $184,923.4 million in 2030.
The digital payments market growth in the historic period resulted from strong economic growth in emerging markets, increased internet penetration, government initiatives in developing economies, rising penetration of e-commerce and increased availability of mobile devices. Going forward, the increasing smart cities, government initiatives for digital payments, internet of things (IOT), increasing adoption of 5g networks, increase in internet penetration and COVID-19. Factors that could hinder the growth of the digital payments market in the future include data localization, security challenges and cross-border payment challenges.
The global digital payments market is concentrated, with a few large players. The top ten competitors in the market made up to 53.61% of the total market in 2020. This can be due to the existence of number of local players in the market serving customers in particular geographies. Paypal Holdings Inc. was the largest competitor with 10.73% share of the market, followed by Ant Group with 10.48%, Amazon.com, Inc. with 8.15%, Visa Inc. with 7.71%, Apple Inc. with 6.55%, Google Pay with 5.39%, Mastercard Incorporated with 1.41%, JP Morgan Chase & Co. with 1.33%, Fiserv Inc. with1.32%, and ACI Worldwide Inc. with 0.54%.
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Other Players Covered in the report
Google Pay, Mastercard Incorporated, JP Morgan Chase & Co., Fiserv Inc., ACI Worldwide Inc., PayUmoney, Paytm, CCAvenue, Razorpay, Instamojo, Cashfree, Line Pay, Rakuten Pay, Origami Pay, D-barai, AliPay, WeChatPay, UnionPay, 99Bill, PayEase, Worldpay, PayPal, Stripe, Amazon Pay, Shopify Payments, Opayo, Adyen, SystemPay International, Novalnet, Wirecard, Sberbank Online, Yandex Money, QIWI, WebMoney, Tinkoff Bank, Cielo, Rede, Getnet S, toneCo, GlobalCollect, Lyra Network, Paybox Services, Fiserv Inc., ACI Worldwide Inc, Amazon Payment Services, CASHU, Trriple, Monami Tech, DPO Group, MTN Group Limited, Flutterwave, M-Pesa, Coruscate’s Alexpay, Digipay, Software Group, Kineto, DPO Group, MTN Group Limited, Flutterwave, M-Pesa, Coruscate’s Alexpay, Digipay
The digital payments market is segmented by mode of payment into point-of-sale (POS) and on-premises. The point-of-sale market was the largest segment of the digital payments market segmented by mode of payment, accounting for 64.4% of the total in 2020. Going forward, the point-of-sale market is expected to be the fastest growing segment in the digital payments market segmented by mode of payment, at a CAGR of 9.7% during 2020-2025.
The digital payments market is also segmented by end-user industry into retail, banking and financial service; telecommunication, government and transportation. The retail market was the largest segment of the digital payments market segmented by application, accounting for 46.1% of the total in 2020. Going forward, the retail segment is expected to be the fastest growing segment in the digital payments market segmented by application, at a CAGR of 8.9% during 2020-2025.
The digital payments market is also segmented by deployment into cloud and on-premise. The on-premise market was the largest segment of the digital payments market segmented by application, accounting for 73.6% of the total in 2020. Going forward, the cloud segment is expected to be the fastest growing segment in the digital payments market segmented by application, at a CAGR of 15.6% during 2020-2025.
The digital payments market is also segmented by client enterprise size into large enterprise and small and medium enterprise. The large enterprise market was the largest segment of the digital payments market segmented by application, accounting for 76.8% of the total in 2020. Going forward, the small and medium enterprise segment is expected to be the fastest growing segment in the digital payments market segmented by application, at a CAGR of 8.6% during 2020-2025.
North America was the largest region in the digital payments market, accounting for 38.8% of the total in 2020. It was followed by Asia-Pacific, and then the other regions. Going forward, the fastest-growing regions in the digital payments market will be South America and Africa where growth during 2025-2030 will be at CAGRs of 15.6% and 12.6% respectively. These will be followed by Middle East and Eastern Europe, where the markets are expected to grow at CAGRs of 12.0% and 11.5% respectively.
The pandemic has positively impacted the demand and application of digital payments. Further, lockdown measures and the adoption of contactless payment encouraged the proliferation of digital payments platforms and online transactions for smooth flow of payments with less risk of contracting the virus. A survey conducted by Accenture of 120 payments executives at banks, in 2020, revealed 75% of the surveyed bank executives believe that the pandemic has increased the urgency to plan and modernize their payment systems.
In 2021, the demand for digital payments is predicted to grow further with the new wave in COVID-19 cases and stringent lockdown measures by governments to contain the spread and deaths. As many nations including countries in South- East Asia, and Europe reported a second wave of the virus outbreak, businesses of all sizes begun to prioritize contactless payment systems and installed highly secured online payment servers in their premises. For instance, in August 2021, JP Morgan has launched its real-time payments option that aims at increasing its competitiveness in the financial sector through better management of global digital payments.
The top opportunities in the digital payments market segmented by mode of payment will arise in the point-of-sale segment, will gain value at $31,799.7 million of global annual sales by 2025. The top opportunities in segment by end-user will arise in the retail segment, which will gain $ 20,394.9 million of global annual sales by 2025. The top opportunities in segment by deployment will arise in the cloud segment, which will gain $23,382.2 million of global annual sales by 2025. The top opportunities in segment by enterprise will arise in the large enterprise segment, which will gain $31,596.6 million of the global annual sales by 2025.The digital payments market size will gain the most in the USA at $9,709.3 million.
Market-trend-based strategies for the digital payments market include offering digital wallet services to increase convenience for customers, offering wearable payment devices for quicker payments, investing in QR based payments technologies to cater to a wider audience, making robust contactless payment options for consumers, investing in AI solutions in order to improve the efficiency, investing in blockchain technologies to offer easily interoperable, efficient, affordable and accessible financial systems and payment solutions in fuel stations to reduce operational costs.
Player-adopted strategies in the digital payments market include strengthening its product portfolio and strengthening its digital payment business.
To take advantage of the opportunities, The AMR recommends the digital payments companies to focus on QR code based payments, focus on artificial intelligence in digital payments, focus on wearable payment devices, establish operations in emerging markets, bundled pricing, increase visibility through websites, increase in social media and internet usage, increase partnerships with banks, focus on fast-growing industrial verticals and offer services to startups.
