The global digital payment market size was worth US$ XX billion in 2022 and is expected to show the highest market growth by reaching up to US$ XX billion by 2029, growing at a CAGR of XX% between the forecast period (2022-2029).
Digital payment involves the transaction of money via digital mode. In digital payments, both payer and payee use a similar mode to send or receive money. Digital payments are also referred to as electronic payment or e-money. Cell phones, the internet, and automated devices are some of the digital mediums used by users to transfer and receive money. Since the past few years, there has been an unprecedented increase in the digital payment market seen due to increasing awareness among the user about the associated benefits and convenience offered by digital mode compared to traditional money transactions.
Bank payments, unstructured supplementary service data(USSD), aadhar enabled payment system (AEPS), unified payment interface (UPI), mobile money wallets, bank prepaid cards, internet banking and others are the most commonly used methods of online payments. Digital payment methods involve IMPS, NEFT, RTGS, bank statements IMPS, investments, bill payments, etc., which are available on a single platform in mobile banking apps.
One of the most significant advantages offered by digital payment mode is the ease and convenience of money transaction, which reduces dependency on cash, transfers fast, and the ease of transfer helps make it the preferred option of money transaction. Digital payment also improves the economic status of a country and is an easy way for safety and efficient tracking.
The global digital payment market is driven by expanding use of smartphones coupled with increasing penetration of high internet. Easy accessibility of digital payment mobile applications and increasing government initiative to promote digital payments create market growth opportunities. The growing technological advancement such as 5G is further expected to accelerate the digital payment market's growth in the forecast period.
Expanding the use of smartphones coupled with increasing penetration of high internet across global users
As per the recent report, the number of smartphone users in India is projected to reach over 760 million by 2021, with the global smartphone users exceed 3.8 billion by 2021. Thus growing number of smartphone users across the globe and easy accessibility of digital payment mobile applications is the prime factor contributing to the growth of the digital payment market in recent times. Additionally, mobile wallets are introduced across the world, wherein a consumer adds money to the application. It uses it later within, or outside of, the merchant (if applicable), is rapidly propelling the adoption of digital payment services.
The global demand for smartphones is growing substantially, and global smartphone numbers are projected to increase further with technological developments such as 5G. According to Ericsson, global smartphone subscriptions stood at 5.6 billion in 2019 and are projected to hit 7.4 billion by 2025, or 84 percent of all subscriptions. For the market, this is another big driving factor. According to the ITU, in January 2019, internet penetration was the highest in Japan, i.e., 93.4%, which is projected to continue due to favorable government standards and related regulations. At present, India, compared to Japan and China, has a relatively low penetration rate. However, due to the increasing number of smartphone users and increasing government initiative towards digital payment, this is expected to increase in the forecast period.
Easy accessibility of digital payment mobile applications and increasing government initiatives to promote digital payments create market growth opportunities.
Growing government initiatives have resulted in increased transactions through e-wallets and point-of-sale machines to promote the digital economy and curb cash use. For instance, the Finance Ministry of India announced in July 2019 that no merchant discount rate (MDR) would be levied on merchants that allow their customers to make payments through 'low-cost digital pay'. Thus these growing promotional activities for digital payment methods and cashless transactions in the country are more likely to accelerate digital payment growth in the forecast period. Apart from this, these promotional activities have brought various e-commerce industries into the market for the past few years, thus accelerating the global market of digital payment in the coming tenures.
For instance, in April 2020, Amazon India offers zero-interest loans to clients to purchase goods on its website or pay bills for the initiative, collaborating with lenders such as Capital Float and Karur Vysya Bank. The service will allow customers on Amazon's website to buy essentials.
The high percentage of technically illiterate population, increasing chancing of cybercrime, and a set of technical problems related to digital payment are hurdling the market's growth.
Digital payments play a crutial role in increasing the percentage of people holding bank accounts. The payment bank facility enables opening and operating bank accounts using mobile phones, even in not technologically stable places across the world. The arrival of digital wallets is making a significant impact and help in financial inclusion. Therefore, the decreasing number of unbanked populations worldwide provides a favorable environment for digital payment vendors to increase their customer base. However, despite the rising percentage of users and growing government initiative to adopt digital methods as the single platform for payment transactions, some restraints are hampering the market's growth. In India, approximately 190 million adults do not have bank accounts, according to the World Bank Report 2018. Most of the users are from ruler areas, thus having inconvenience in adopting online sales methods. Cybercrimes are much higher in online payment mode than traditional methods coupled with a set of related technical problems that can disable the payment methods, thus hurdling the growth of the market.
COVID-19 Impact Analysis
The global digital payments have shown a slight improvement due to the COVID-19 pandemic, although sectors like logistics, manufacturing, hospitality, healthcare, retail, transportation and others were severely hampered. The pandemics have accelerated the adoption of contactless and wallet payments to avoid the transmission of disease. Owing to pandemic lockdown, online payments have seen unprecedented growth in payment of essential services and buying essential items via online or offline mode.
Consequently, the global existence of COVID-19 and its effect on e-commerce is likely to promote enhanced international collaboration and the further growth of online buying and supply policies. The pandemic has made it clear that e-commerce can be an important tool/solution, particularly considering that e-commerce sales can support small and medium businesses that form the backbone for certain economies.
The global digital payment market is segmented based on component, mode of payment, deployment, organization size, end-user and region.
Ease of use, high efficiency, and increased accuracy coupled with easily accept various transactions through countless payments, mobile wallets, EMV chip cards, point of sale hold the largest market share in recent times.
The global digital payment market is bifurcated into a digital wallet, bank cards, digital currencies, net banking, point of sales, and others in terms of payment mode. The point of sale segment dominated the 2018 market and is expected to maintain its dominance in the conjecture time frame owing to ease of use, high efficiency, and increased accuracy. Point of sale has gain popularity among various end-users as the mode can easily accept various transactions through countless payments, mobile wallets, EMV chip cards and others. Sales can streamline the accounting process, making it simple for traders to maintain a transaction record. Point of sale technology, unlike a cash register, requires sophisticated inventory control capabilities. From monitoring the quantity of a product to setting up reorder triggers and a retail matrix, POS software will save hours of inventory management every week of its customer. And the best part is that your POS device can even give you inventory information in real-time, something that even the best cash registers can not do.
For instance, in January 2021, Mastercard Pioneers cloud tap on the phone, its first pilot of cloud point of sale acceptance technology. With the arrival of cloud point of sale (POS), MasterCard is improving its Tap on phone product and empowering the ecosystem to develop its cloud-based products with improved tools and capabilities.
Rising demand from various end-users, the presence of economically developed countries and the presence of leading producer of plastic is more likely to accelerate the market of color contrite in the Asia-Pacific region
North America holds the largest digital payment market in recent times due to the existence of a large number of digital payment solutions providers in the region. Additional factors driving the market are expanding the mobile commerce industry and the developed digital economy in North America. Different variables in Canada, such as reliable broadband and network infrastructure, customer willingness and preference for cashless payments, and the banking economy, contribute widely to the country's higher rate of cashless transactions.
On the other side, Asia–Pacific is expected to grow at the fastest rate over the forecast period. The government's growing initiatives towards digitization and increasing use of digital payments in developing countries are more likely to boost the market of digital payment in the coming tenure. Growing e-commerce industries in countries like India, China and Japan coupled with increasing customer base are the factors driving the digital payment market in the Asia-Pacific region.
The digital payment market is highly competitive with the presence of growing national and international players across the globe. Some of the global players contributing to the market's growth include MasterCard, Google, Amazon, Alipay, Visa, PayPal, ACI Worldwide, Aurus, Apple Pay, Paysafe and others.
The major players are adopting various growth strategies such as product launches, acquisitions, and collaborations, contributing to the digital payment market's growth globally. The major key players are favoring acquisition and partnership as the growth strategy for building their global business.
Overview: The company is based in the United States; it is an American multinational financial service corporation. The company's principal business is to process payments between the banks of merchants and the card-issuing banks or credit unions of the purchasers who use the Mastercard brand debit, credit and prepaid cards to make purchases. Thus company works to connect and power an inclusive digital economy that helps their customers to make transactions simple, smart, safe and accessible.
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The global digital payment market report would provide access to an approx: 77 market data table, 77 figures and 229 pages.
Target Audience 2022
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