The global payments market is expected to grow from $466.29 billion in 2020 to $517.68 billion in 2021 at a compound annual growth rate (CAGR) of 11%. The market is expected to reach $735.39 billion in 2025 at a CAGR of 9.2%.
Major players in the payments market are PayPal, Square, Inc., Apple Inc, Amazon Payments, Flagship Merchant Services, GoCardless, Bitpay, Stripe, Payline Data, and FIS.
The payments market consists of sales of payments services by entities (organizations, sole traders, and partnerships) that are engaged in facilitating payment transfers between individuals, companies, or both. The payments industry consists of establishments primarily engaged in processing money transfers and payments between various accounts.
This includes all institutions involved in payment processing such as banks, non-banking financial institutions, and others. Revenue generated from the payments market includes all the processing and services fees levied by the banks and financial institutions for payment processing.
The integration of biometric authentication technology in payments is a key trend gaining popularity in the payments market. Biometric authentication is a specific and significant payment method that integrates and offers accuracy, effectiveness, and protection within a single package. The methods of authentication include fingerprint scanners, facial recognition, iris recognition, pulse tracking, and venous mapping.
The payments market is segmented by type into credit transfer, direct debit, check payment, cash deposit, and by application into banks, non-banking financial institutions, others.
In November 2020, Refinitiv, a London-based financial services company acquired GIACT for an undisclosed amount. The acquisition of GIACT’s fraud prevention capabilities brings new offerings to Refinitiv’s customers by enhancing and broadening Refinitiv’s digital identity verification and document proofing solution. GIACT is a USA based financial services company.
The outbreak of COVID 19 is expected to drive the growth of the payments market over the forecast period. Contactless payments are becoming a preferred payment method in the current pandemic situation because less human contact is required. Contactless payment systems at the point of services, such as facial recognition, Quick Response (QR) codes, or Near-field Communication (NFCs), will render the virus less likely to spread to others via payment exchanges. In the first quarter of 2020, the credit card giant Mastercard announced a 40% increase in contactless payments as the global pandemic deepened. Therefore, the widespread of coronavirus is expected to propel the contactless payment market growth in the forecast period.
The increasing frauds in payments impacted the growth of the payments market. Payment fraud is a form of fraudulent or unlawful transaction carried out by a cybercriminal. Fraudsters use third-party platforms such as e-commerce portals to defraud consumers to pay for products or items that are never shipped.