Global Digital Payment Market Overview, 2024-29

Global Digital Payment Market Overview, 2024-29

The global digital payment business exemplifies how technology may revolutionize the way we conduct financial transactions. Over the last few decades, the landscape of financial services has changed dramatically, from the introduction of electronic bank transfers to the spread of mobile payment applications. Today, digital payments are a vital part of billions of people's daily lives, allowing for frictionless cross-border transactions and altering old concepts of commerce and banking. The digital payment revolution is the result of a convergence of many technological breakthroughs, including widespread smartphone use, the prevalence of high-speed internet connectivity, and the development of powerful encryption mechanisms. These elements have jointly accelerated the rise of digital payment platforms, enabling consumers to securely and conveniently conduct transactions with just a few taps on their mobile devices. Gone are the days when cash and checks were the primary means of exchange; today, digital wallets, peer-to-peer payment services, and contactless payment methods have become the norm, offering unparalleled convenience and efficiency to users around the globe. The rise of digital payments has not only changed the way people manage their money, but it has also had a significant influence on businesses of all sorts. Small and large businesses alike have adopted digital payment systems as a way to streamline operations, save transaction costs, and improve the entire customer experience. With the rise of e-commerce and the increasing popularity of online purchasing, digital payments have become essential for businesses looking to capitalize on the immense potential afforded by the digital economy. Furthermore, the COVID-19 pandemic has expedited the trend toward digital payments, with consumers and businesses increasingly turning to contactless and online payment options to reduce physical encounters and conform to social distancing standards.

According to the research report, “Global Digital Payment Market Overview, 2024-2029” published by Bonafide Research, the market is anticipated to cross USD 285 Billion by 2029, increasing from USD 112.53 Billion in 2023. The market is expected to grow with 17.25% CAGR by 2024-29. The global digital payment sector has seen an increase in innovation and rivalry, with numerous competitors fighting for market supremacy. Established financial institutions, technological behemoths, fintech startups, and mobile network operators are all fighting for a piece of the growing digital payment pie, each bringing their own set of strengths and capabilities to the table. Traditional banks are collaborating with fintech companies to provide cutting-edge payment solutions, while internet behemoths are using their massive user bases and technological capabilities to disrupt the financial services industry. Meanwhile, emerging countries are seeing an increase in local businesses offering bespoke digital payment solutions to meet the region's specific demands and challenges. One of the primary reasons for the growth of the digital payment industry is the increasing consumer demand for convenience, security, and accessibility. Today's tech-savvy consumers expect seamless and frictionless payment experiences, whether they are shopping online, dining at a restaurant, or sending money to friends and family. As a result, digital payment providers are constantly innovating to develop new features and services that meet these evolving demands, such as biometric authentication, tokenization, and real-time transaction processing. Moreover, the proliferation of smartphones and the internet has made it easier than ever for consumers to access digital payment services, regardless of their geographical location or socio-economic status.

Market Drivers

• Convenience and accessibility: Consumers increasing demand for ease and accessibility is a major driver of the global digital payment business. Digital payment systems provide exceptional ease by allowing consumers to execute transactions at any time and from any location, using their smartphones or other connected devices. With the advent of e-commerce and mobile commerce, consumers want seamless and frictionless payment experiences, which are pushing the adoption of digital payments. Furthermore, digital payments eliminate the need for real cash or checks, which simplifies the process of carrying and handling traditional forms of currency. As a result, customers are increasingly using digital payment solutions for their daily financial activities, which is driving the worldwide digital payment market forward.

• Rapid technological advancements: Mobile technological advancements, encryption techniques, and payment processing algorithms have made digital payments more secure, efficient, and trustworthy than ever before. With the advent of technologies such as biometric authentication, tokenization, and near-field communication (NFC), digital payment providers provide higher security features and smoother user experiences, resulting in increased acceptance of digital payment solutions. Furthermore, advances in artificial intelligence, machine learning, and blockchain are creating new opportunities for innovation in the digital payment area, paving the way for the creation of sophisticated payment solutions and services.

Market Challenges

• Security concerns: One of the most significant difficulties confronting the worldwide digital payment sector is the ongoing threat of security breaches and cyber-attacks. As digital transactions become more popular, so do the hazards of data theft, fraud, and identity theft. Consumers and organizations are concerned about the potential implications of security breaches, which include financial losses, reputational damage, and legal obligations. In order to address these issues, digital payment providers must incorporate robust security mechanisms such as encryption, tokenization, and biometric authentication to protect sensitive financial information and prevent unwanted access. Furthermore, regulatory bodies play an important role in establishing and enforcing security standards that maintain the integrity and trustworthiness of the digital payment system.

• Consumer trust and adoption: The global digital payment market faces serious hurdles in terms of customer confidence and acceptance. Despite the ease and efficiency that digital payment solutions provide, many consumers are wary about their security and reliability. Concerns about privacy, data security, and potential fraud hinder some consumers from using digital payments, especially in areas with poor internet access or digital literacy.

Market Trends

• Mobile wallet adoption: The global digital payment business has experienced a considerable increase in mobile wallet acceptance. With the proliferation of smartphones and the increased convenience they provide, customers are adopting mobile wallet solutions for their daily purchases. This trend is being pushed by factors such as the proliferation of contactless payments, the integration of loyalty programs and rewards, and the expansion of mobile banking services. As more merchants and service providers accept mobile payments, the use of mobile wallets is likely to rise, accelerating the expansion of the digital payment sector.

• Emergence of contactless payment: Contactless payments have emerged as a major trend in the worldwide digital payment business. With consumers increasingly valuing hygiene and safety in the aftermath of the COVID-19 outbreak, contactless payment solutions like NFC-enabled cards and mobile wallets have gained popularity as a quick and secure alternative to cash and traditional card payments. This trend is fuelled further by merchants and financial institutions' extensive deployment of contactless payment infrastructure, as well as the expanding acceptance of contactless payments in industries like retail, hospitality, and transportation.

Based on offering segment market is segmented into solution and services. Solutions offering segment is predicted to lead the global digital payment market. Based on transaction type segment market includes domestic and cross border. Cross border transaction type is projected to grow at fastest rate in global digital payment market.

The Solutions Offering sector includes a variety of digital payment solutions, including mobile wallets, digital banking platforms, payment gateways, point-of-sale (POS) systems, and payment processing services. This diversity enables solution providers to meet the diverse demands and preferences of consumers, enterprises, and financial institutions, resulting in a higher market share. Solution providers in this area frequently provide customizable and adaptable solutions that can be tailored to match the unique needs of various industries, enterprises, and use cases. Whether it's a small business looking for a simple payment processing solution or a multinational corporation in need of comprehensive digital banking services, solution providers can tailor their offerings to meet their clients' specific needs, resulting in increased adoption and revenue. Cross-border trade and business transactions have increased dramatically as commerce has become more globalized. As businesses develop worldwide and seek new markets for their products and services, there is an increasing demand for fast and cost-effective payment solutions that enable cross-border transactions. Digital payment platforms enable businesses to transmit and receive payments across borders in a simple and secure manner, avoiding the constraints and inefficiencies associated with traditional banking systems. The development of e-commerce has increased demand for cross-border payment solutions. With the rise of internet shopping, customers now have access to a diverse range of items and services from all over the world. However, completing transactions across borders can be problematic due to differences in currencies, payment methods, and regulatory requirements. Digital payment platforms offer a seamless and frictionless way for consumers to make purchases from international merchants, facilitating cross-border e-commerce and driving the growth of the digital payment market.

Based on payment mode segment market is segmented into cards, ACH transfer, digital wallet, and other payment modes. Cards payment mode is expected to lead the global digital payment market. Based on end user industry segment market is divided into BFSI, healthcare, IT & telecom, media & entertainment, retail & e-commerce, transportation and others. BFSI industry is expected to remain major revenue source for digital payment in global digital payment market.

Cards, including credit, debit, and prepaid cards, have been a part of the payment landscape for decades. Consumers are used to using cards for transactions, both online and offline; thus, card payments are a popular alternative for many. Cards have effortlessly migrated into the digital arena, allowing consumers to make online purchases, smartphone payments, and contactless transactions. This familiarity and confidence with cards contribute to their sustained dominance in the digital payment business. Card payments provide powerful security features and fraud protection measures, instilling confidence in both consumers and merchants. Card issuers use advanced security features such as chip-and-PIN technology, tokenization, and real-time fraud monitoring to prevent unauthorized use and fraudulent transactions. As consumers become increasingly concerned about data security and identity theft, the security features offered by card payments remain a compelling reason to choose cards over other digital payment methods. The BFSI industry has been at the forefront of digital transformation efforts, leveraging technology to improve customer experiences, streamline operations, and drive innovation. These programs rely heavily on digital payment systems, which allow banks, financial institutions, and insurance firms to provide their consumers with convenient and secure payment options. As digital channels become more crucial for accessing financial services, demand for digital payment solutions in the BFSI industry is predicted to rise significantly, driving revenue growth in the digital payment market. The growth of online and mobile banking has accelerated the use of digital payment solutions in the BFSI sector. Banks and financial institutions are investing extensively in digital banking platforms and smartphone apps, offering customers a variety of digital payment options, including peer-to-peer transfers, bill payments, and contactless payments. These digital channels not only provide customers with greater convenience and accessibility but also generate revenue through transaction fees, interchange fees, and value-added services, contributing to the overall revenue generated from digital payments.

Based on report market includes five major regions North America, Europe, Asia-Pacific, South America and Middle East & Africa. Asia-Pacific region is expected to grow at fastest rate in global digital payment market.

The Asia-Pacific region, which contains some of the world's largest and most dynamic economies, is experiencing a digital revolution in payment systems. Asia-Pacific contains a diverse and rapidly evolving landscape for digital payments, from the bustling metropolises of Tokyo and Singapore to the emerging IT hubs of Bangalore and Shanghai. Technical innovation, changing consumer behavior, and regulatory reforms have all contributed to the growth of the Asia-Pacific digital payment market. In many ways, the region has outgrown traditional banking infrastructure, with millions of individuals accessing financial services mostly through mobile phones. Mobile payment solutions such as Alipay in China, Paytm in India, and GrabPay in Southeast Asia have increased in popularity, offering clients a convenient and secure way to conduct digital transactions. The Asia-Pacific region's mobile-first approach to technology adoption is one of the key factors driving the growth of the digital payment sector. With smartphone usage increasing and mobile internet becoming more accessible and affordable, users are increasingly relying on their mobile devices for everyday transactions. Mobile payment apps offer a seamless and intuitive user experience, allowing users to pay, transfer funds, and manage their finances with a few taps on their devices. In addition, Asia-Pacific's digital payment business benefits from the region's growing e-commerce market. With the rise of online shopping platforms like Alibaba, Amazon, and Flipkart, consumers are increasingly adopting digital payments as their preferred method of completing purchases online.

Some of the key players in the mobile payment technology market are MasterCard, Visa, PayPal, Google, Amazon, Alipay, among others. These companies are contributing majorly in this market by adopting strategies such as collaborations and partnerships to provide digital payment solutions across the regions. Furthermore, the players are highly investing in customizing their products as per the demands of the market; the digital payment market forecast states. These advancements are executed keeping in mind the current payment devices so that the cost is not high for the provider adopting the new technology. For instance, MasterCard and Eventim, a UK based events and ticket agent and one of the major subsidiary of Europe’s largest retailer CTS Eventim, entered into a marketing and technology partnership to launch contactless payment on-site at various music events and venues. In the U.K., people prominently adopted MasterCard payments and mobile wallets. Also, to encourage the users to adopt digital payments, they were offered a discount on the total beverages they bought using MasterCard payment. Guests at the festival were also given live-demos of the digital payment system. This on-site marketing helped MasterCard to drive technological innovation and shape customer behavior, which would help the company to strengthen the customer base.

Recent Developments

• In July 2023, Mastercard announced a collaboration with JazzCash, one of Pakistan's most prominent digital wallet providers, serving over 43 million accounts, to revolutionize digital payments by introducing affordable acceptance solutions. The partners launched QR code payments, Tap on Phone solutions, and Pay by Link to facilitate cost-effective and widespread acceptance for merchants at the bottom of the economic pyramid.
• In December 2023, Klarna and Adyen extended global strategic partnership with aim of simplifying payments and improving the customer experience. Payment platform, Adyen, has strengthened its global partnership with Klarna. The BNPL fintech, which now designs itself as an AI powered global payments network and shopping assistant, will benefit from Adyen’s acquiring capabilities to simplify card payments for its 150 million consumers and 500,000 retail partners globally.
• In October 2023, Fiserv, Inc., a leading global provider of payments and financial services technology solutions, has partnered with Melio, a leading B2B payments platform, to enable financial institutions to better meet the payments needs of small businesses. CashFlow CentralSM from Fiserv, launched through an exclusive relationship with Melio, would combine the easy-to-use accounts payable and receivable workflows for which Melio is known with the market-leading biller and merchant network and payment capabilities of Fiserv.
• In October 2023, Fiserv, Inc., a global leader in payments and financial technology, announced the acquisition of Skytef, primary distributor of Software Express’s SiTef (Solução Inteligente de Transferência Eletrônica de Fundos), from Fiserv, the leading Electronic Funds Transfer solution in Brazil. With the integration of the two companies and the addition of new associates, Fiserv expands its capacity to support large clients with complex after-sales demands.

Considered in this report
• Historic year: 2018
• Base year: 2023
• Estimated year: 2024
• Forecast year: 2029

Aspects covered in this report
• Digital Payment market Outlook with its value and forecast along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By Offering
• Solutions
• Services

By Transaction type
• Domestic
• Cross Border

By Payment Type
• Cards
• ACH Transfer
• Digital Wallet
• Other Payment Modes

By Vertical
• BFSI
• Healthcare
• IT & Telecom
• Media & Entertainment
• Retail & E-commerce
• Transportation
• Others

The approach of the report:
This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources.

Intended audience
This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Digital Payment industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.
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