According to a recent study from market research firm Global Market Insights, the payments processing solutions market is set to grow from its current market value of more than $60 billion to over $140 billion by 2026, gaining remarkable traction over the 2020 to 2026 period.
The payments processing solutions market is set to record significant gains over the forthcoming timeframe due to increasing digitalization of payment methods, growing adoption of mobile wallets, increasing popularity of cashless transactions. As the consumer preference for m-commerce rises, in tandem with the high penetration of smartphones, the preference for payments processing solutions is becoming more and more apparent.
Payment processing refers to how transactions are being automated between the merchant and the customer. Online payment processing further enables merchants to allow for any add-on payment methods, simply by setting up recurring payments, or approving transactions remotely. In other words, a payment gateway means a software which interfaces in a secure manner between an eCommerce website and a customer’s preferred payment mode.
The mode of payment could be the customer’s bank account, gift card, debit card, credit card, or any other online wallets. A few examples of recognized payment gateways are Amazon Payments, PayPal, BrainTree, PayTM, Skrill, PayU among many others. As per research, nearly 86 percent of customers make online purchases via debit or credit cards, and more than 60% consider it to be their preferred methods of payment while making a purchase.
At present, mobile payment acceptance is helping in satisfy the coming generation of customers with simple and seamless payment experiences. Mobile devices such as tablets and smartphones are changing the way business is done.
The payments processing solutions market is divided into different segments in terms of technology, deployment model, mode of payment, organization size, end-use, as well as regional landscape.
In terms of end-use, the overall payments processing solutions market is categorized into government and public sector, BFSI, healthcare, retail & commerce, and tourism and hospitality. Among these, BFSI end-user segment is anticipated to witness a respectable CAGR of more than 9% over the projected time period. The segmental growth is chalked up to the increasing digitalization of payment methods across the BFSI sector.
Government & public sector segment will witness substantial growth over the coming time period. In fact, in 2019, the segment held a market share of over 8% due to increasing popularity of cashless transactions in federal agencies.
From a regional frame of reference, Latin America payments processing solutions market will witness a CAGR of more than 13% through the forthcoming time period owing to increasing penetration of mobile wallets in the region.
Meanwhile, Middle East & Africa is set to record momentous gains in the upcoming time period. In 2019, the region held over 5% industry share of the overall market. This anticipated growth is ascribed to the increasing consumers preference towards m-commerce. In fact, high social and digital penetration in the Gulf states or GCC has led consumers to shift to mobile or m-commerce.