North America Digital Payment Market Outlook, 2029

North America Digital Payment Market Outlook, 2029

In recent years, the environment of financial transactions in North America has shifted dramatically. The spread of digital payment systems has transformed the way consumers conduct transactions, from grocery shopping to bill payments. This transformation has not only streamlined payment operations, but it has also created new opportunities for businesses and consumers alike. North America, which includes the United States, Canada, and Mexico, is a key hub for digital payment adoption. With its excellent technological infrastructure and broad internet usage, the region has become an ideal environment for the development of digital payment services. From mobile wallets to contactless payments, consumers' options have expanded tremendously, changing old concepts of business. One of the main reasons behind the surge in digital payments is the increasing preference for convenience and efficiency among consumers. The ability to make transactions with just a few taps on a smartphone or a wave of a card has greatly enhanced the user experience, leading to widespread adoption. Moreover, the COVID-19 pandemic acted as a catalyst, accelerating the shift towards contactless and online payments as people sought safer alternatives to physical cash. The United States, in particular, has emerged as a leader in the digital payment field. With tech titans like Apple, Google, and PayPal at the helm, innovative payment systems like Apple Pay, Google Pay, and Venmo have garnered substantial momentum among customers. The country's large population, combined with its strong e-commerce ecosystem, has provided a favorable atmosphere for the expansion of digital payments. Mexico, despite having lower internet penetration and smartphone ownership rates than its North American peers, has seen an increase in digital payment use. Mobile payment solutions such as Mercado Pago and Citibanamex Pay are gaining popularity, particularly among the younger demographic. Furthermore, programs for financial inclusion, such as CoDi (Digital Collection), strive to bring more Mexicans into the digital payments ecosystem.

According to the research report ""North America Digital Payment Market Outlook, 2029,"" published by Bonafide Research, the North America Digital Payment market was valued more than USD 40 Billion in 2023. Credit and debit cards remain the most popular forms of digital payment in North America. The region boasts one of the world's highest card penetration rates, with cards accounting for the vast majority of transactions. Governments across North America have taken strong steps to promote the use of digital payments. For example, the Canadian government promotes the use of Interac e-Transfer for safe and convenient peer-to-peer transactions. While digital payments provide greater security than cash transactions, North America has seen a rise in cybersecurity threats against financial institutions and individuals. As a result, there is a greater emphasis on building strong security measures and educating users on recommended practices for secure digital transactions. The regulatory systems governing digital payments vary across North America. While the United States has seen a more fragmented approach with different states implementing their own regulations, Canada has a more centralized regulatory structure overseen by entities like the Office of the Superintendent of Financial Institutions (OSFI). North America is a global innovation hub for fintech startups and technology corporations producing cutting-edge solutions in the digital payment arena. With a vibrant ecosystem of venture capital investment and IT expertise, the area is continuing to drive innovation and define the future of digital payments globally. QR-code-based payment systems are gaining traction throughout North America, particularly in the United States and Canada. Businesses, particularly small retailers, are rapidly using QR code payment methods due to their low cost and ease of deployment. Peer-to-peer (P2P) payment programs such as Venmo, Cash App, and Zelle have become key components of North America's digital payment ecosystem. These apps permit frictionless money transfers between individuals, such as sharing a payment at a restaurant or sending money to a friend.

Major Drivers

Technological advancements: Technological advancements fuel the evolution of digital payment systems in North America. Advancements in mobile technology, encryption, biometrics, and artificial intelligence enable the creation of more secure, efficient, and user-friendly payment systems. For instance, the inclusion of NFC (Near Field Communication) technology in smartphones has permitted the broad acceptance of contactless payments, whereas biometric authentication methods improve security and ease.

Government initiatives and regulations: Government initiatives and regulatory measures influence the digital payment ecosystem in North America. Policies that promote financial inclusion, reduce cash usage, and improve cybersecurity offer a favorable climate for the expansion of digital payments. Initiatives that promote the use of electronic payments in government transactions, such as the introduction of open banking frameworks, help to expand digital payment infrastructure.

Major Challenges

Cybersecurity threats: The expansion of digital payment platforms in North America has exposed consumers and organizations to an increasing number of cybersecurity risks, such as data breaches, phishing attempts, and malware infections. Cybercriminals target financial institutions and payment processors to steal sensitive data, resulting in financial losses and brand damage. To mitigate these risks and develop trust in the digital payment ecosystem, strong cybersecurity mechanisms such as encryption, multi-factor authentication, and real-time fraud detection must be in place.

Consumer trust and privacy concerns: As digital payment acceptance grows, preserving customer trust and addressing privacy issues are significant difficulties in the North American industry. Concerns about data privacy, permission, and transparency in the gathering and use of personal information might diminish trust in payment services. In order to solve these difficulties and restore trust in digital payment systems, it is critical to strengthen data protection measures, create clear privacy policies, and give consumers more control over their data.

Based on offering segment market is divided into solution and services. Solution offering is expected to lead the North America digital payment market. Based on transaction type segment market includes domestic and cross border. Domestic transaction type is projected to lead the North America digital payment market.

The solution offering enables organizations to design digital payment solutions to meet their specific needs and requirements. Whether it's integrating payment gateways into current systems or creating new mobile payment apps, solution providers provide flexibility and customization choices to suit a variety of business types and industries. Beyond simple payment processing, solution offerings frequently include a diverse set of features and functionalities. These include fraud detection and prevention, real-time analytics, CRM integration, and multi-channel payment support. Solution providers bring value to the payment experience for businesses and customers by providing a broad array of functionalities. North American consumers often choose to conduct their daily transactions using domestic digital payment options. Consumers frequently choose domestic payment choices over foreign ones because they are familiar with local payment brands and methods, as well as trusting domestic financial institutions. Domestic digital payment options are extensively accepted by merchants throughout North America. Businesses prioritize incorporating local payment alternatives into their checkout procedures to meet the needs of their domestic customer base. This widespread acceptability encourages consumers to do their transactions using domestic payment options. Domestic digital payment transactions often have lower fees than international transactions. Domestic payment providers frequently offer competitive pricing and advantageous terms to retailers and consumers, making domestic transactions more affordable and appealing.

Based on payment mode segment market is segmented into cards, ACH transfer, digital wallet, and other payment modes. Cards payment mode segment is expected to lead the North America 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 are expected to remain major end user of digital payment services in North America digital payment market.

North America has one of the world's highest card penetration rates, with a considerable proportion of the population possessing credit and debit cards. This widespread acceptance of cards as a payment mechanism lays the groundwork for cards to dominate the digital payment business. Cards provide simplicity and ease of use, allowing customers to make transactions online and in-store with a simple swipe or touch. Card payments are popular among consumers due to their familiarity and convenience, which results in a higher volume of transactions than alternative payment methods. Cards are extensively accepted by merchants in North America, including retail stores, restaurants, online retailers, and service providers. The widespread use of card acceptance terminals and their interaction with e-commerce platforms make cards a preferred payment method for businesses, further reinforcing their dominance in the digital payment market. North America has one of the world's highest card penetration rates, with a considerable proportion of the population possessing credit and debit cards. This widespread acceptance of cards as a payment mechanism lays the groundwork for cards to dominate the digital payment business. Cards provide simplicity and ease of use, allowing customers to make transactions online and in-store with a simple swipe or touch. Card payments are popular among consumers due to their familiarity and convenience, which results in a higher volume of transactions than alternative payment methods. Cards are extensively accepted by merchants in North America, including retail stores, restaurants, online retailers, and service providers. The widespread use of card acceptance terminals and their interaction with e-commerce platforms make cards a preferred payment method for businesses, further reinforcing their dominance in the digital payment market.

Based on report market includes three major countries including United States, Canada and Mexico. Canada is expected to grow at rapid pace in North America digital payment market.

The landscape of digital payments in Canada is rapidly evolving, with traditional methods like cash and debit cards under threat from innovative technology. The development of Interac in the 1980s paved the way for secure debit card transactions, but in recent years, there has been a growth in contactless payment methods such as mobile wallets like Apple Pay and Google Pay. Canadians are increasingly embracing digital payment methods due to the convenience, security, and growing popularity of e-commerce. Payment methods in Canada have progressed dramatically, with a noticeable shift toward digital options, but at a slower rate than in other regions. The Bank of Canada's 2021 poll emphasized the continued prevalence of traditional payment methods, such as cash and debit cards, while also demonstrating an increasing customer preference for digital wallets. This trend gained traction with the implementation of the Real-Time Rail system in 2022, a big step toward modernizing interbank transfers and improving transaction efficiency across the financial sector. The Canadian government has supported projects aimed at increasing digital payments and financial inclusion. Regulatory organizations such as the Office of the Superintendent of Financial Institutions (OSFI) and the Financial Consumer Agency of Canada (FCAC) strive to create a secure and competitive environment for digital payment innovation. Canada has a vibrant fintech industry, with several startups and technology businesses pioneering in the digital payment field. From mobile wallets to blockchain-based solutions, Canadian fintech companies are creating cutting-edge technologies that are changing the way payments are made and handled.

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

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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