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P2P Payments Market

P2P Payments Market: Information by Transaction Mode (Mobile Web Payments), End-User (Consumer Credit Payment, Student Payment), Application (Retail), and Region — Forecast till 2030

Published At : 10 Aug, 2022
Updated At : 25 Aug, 2022
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Market Snapshot
Base Year:
2021
Study Period:
2020-2030
CAGR:
17.53 %
Fastest Growing Market:
North America
Largest Market:
Asia Pacific

The global P2P payments market size was worth USD 2,219 billion in 2021. It is expected to reach USD 8,078.81 billion by 2030, growing at a CAGR of 17.53% during the forecast period (2022–2030).

Peer-to-Peer (P2P) payment is a method by which a user can send money from his bank account to another person’s bank account using the internet or a mobile device as a digital medium. Payments are divided into two categories according to whether they are transferred to accounts inside or outside the bank. Accessibility and convenience are two of the top desires of modern customers, particularly regarding payments.

Since there is no need for an intermediary because all transactions are conducted electronically, P2P systems have incredibly cheap transaction fees of around 2% to 3%, and some may even be free of charge. P2P networks may also be safer because they can detect fraud and are encrypted. Certain apps and online solutions for every transaction have begun to include biometrics and automatic notifications.

The global P2P payments market is expanding as customers increasingly accept online, mobile, and e-commerce services. Younger generations are also adopting smartphones at a faster rate. Additionally, developing the m-commerce sector in emerging nations has a favorable effect on the market expansion. The COVID-19 pandemic had a beneficial effect on the expansion of the P2P payments industry as a consequence of rising non-cash transaction demand worldwide to curb the spread of the virus and increasing consumer demand for P2P payments as a simple and convenient method of payment.

P2P Payments Market Share

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Market Dynamics

Global P2P Payments Market Drivers

Increased Smartphone Penetration and Low Operation Cost to Drive Market

The market is driven by an increase in smartphone penetration in developed and developing economies like China and India, as well as a rise in the knowledge of the advantages of online and mobile payments. As high-speed internet connectivity options like 4G and 5G become more widely used, users may now use hassle-free payment systems on their smartphones, which fuels the market expansion.

Additionally, the distribution network of smartphone manufacturers has expanded significantly, making smartphone devices widely accessible to end customers. Since they have a widespread distribution network in India, major mobile phone manufacturers like Samsung, Micromax, and Karbonn, for example, can make online services available to the rural populace via their mobile phones. People now receive and make payments through their cellphones due to increased smartphone usage and quicker connectivity, driving the global P2P payments market.

Furthermore, P2P payment platforms seek to increase business growth by reducing the costs of hiring staff, managing branches, and maintaining physical components to reduce operational costs. These networks give borrowers a reliable framework for securing repayment, reducing the market risk for investors. With the aid of a P2P payments service, investors can facilitate a range of market risks, including interest rates, unemployment rates, and risk of property prices, which helps the expansion of the worldwide P2P payments sector.

Global P2P Payments Market Restraints

Associated Market Risks to Hinder Market Growth

Increased data leaks and security issues are likely to impede market expansion. Due to these associated risks, most individuals opt for banks instead of peer-to-peer payment services. This is anticipated to drastically restrain the global peer-to-peer payment market. Consequently, service providers risk losing money because they offer assurances against the debt without collateral, which can further negatively impact the market growth.

Global P2P Payments Market Opportunities

High Competition and Technological Advancements to Spur Market Opportunities

The market for peer-to-peer (P2P) payments is highly fragmented. The struggle for a prominent position is fiercely contested by many players. Key players either buy out new competitors or merge with them. Additionally, the players spend a lot of money on research and development projects. The P2P payments market expands due to these efforts, resulting in technology improvements, upgrades, and new features for P2P payments. The P2P payments market growth trajectory includes many mergers, acquisitions, joint ventures, and partnerships. The participants engage in these events to strengthen their position as thought leaders in the P2P payment space, eventually improving growth prospects.

 

Segmental Analysis

The global P2P payments market is segmented into transaction mode, end-user, application, and region.

On the Basis of Transaction Mode

Based on transaction mode, the global market is categorized into Mobile Web Payments, Near Field Communication, SMS/Direct Carrier Billing, and Others.

The Near Field Communication section is projected to expand significantly and hold the largest market share over the forecast period. By providing customers with a straightforward and hassle-free payment method, strong demand in the NFC (near field communication) segment would help customers better serve themselves. Retailers may now include customer loyalty programs into their payment plans due to NFC technology, and customers can quickly redeem coupons on their mobile devices. The growth of online business platforms and the ongoing use of cutting-edge technology for financial transactions are likely to support the development of this segment. The increasing popularity of wearable installment devices and the emergence of a flexible trade pattern would likely hasten the adoption of NFC-based installments.

On the Basis of End-User

Based on end-user, the global market is categorized into Consumer Credit, Real Estate Payments, Student Payments, and Small Business Payments.

The Small Business Payment section is projected to expand significantly and hold the largest market share over the forecast period. The growth of small enterprises in Singapore and India is to blame for this expansion. The market for P2P payments will have a lot of room to develop due to the advantages associated with these transactions, such as their speed, convenience, effectiveness, and ease of use. Additionally, money is sent with the touch of a button. Therefore, the demand for P2P payments is anticipated to increase based on these factors.

On the Basis of Application

Based on application, the global market is categorized into Media & Entertainment, Energy & Utilities, Healthcare, Retail, Hospitality & Transportation, and Others.

The Retail section is projected to advance significantly and hold the largest market share over the forecast period. The segment's future growth is encouraged by rising cell phone usage and the associated expansion of portable trade agreements. The most popular way to buy something is now, more often than not, mobile applications.

According to the 2020 E-trade Payments Trends Report from J.P. Morgan, 54% of flexible business payments are done using certain shopping apps. Expanded cross-line acceptance is another critical factor driving the trend for flexible installments. A few banks are attempting to forcibly forward portable installments, escalating the fragment's current situation. Organizations are also working on implementing a modified set-up of complete installment solutions to address specific issues in the abundance of the executive, lending, and security areas.

 

Regional Analysis

Region-wise, the global P2P payments market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.

Asia-Pacific Surpasses Other Regions

P2P Payments Market Regional Analysis

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Asia-Pacific is projected to advance significantly and command the largest market share during the forecast period. This is attributed to several governments' encouragement to adopt digital payments. Additionally, emerging nations like India are launching numerous programs and initiatives to encourage digital payments. One such example is the "Digital India" effort. China and Indonesia are also among the market leaders in Asia-Pacific for P2P payments. The availability of cutting-edge FinTech services in China is the primary driver of the prospective P2P payments business there. China has also been drawing investors due to the lack of alternative investment opportunities and the greater returns offered by P2P investments.

Asia-Pacific’s landscape for digital financial services is rapidly improving. Asian marketplaces, particularly Southeast Asia, have adopted digitalization at a breakneck pace due to the pandemic. The traction of digital and P2P payment offers dramatically increased in this region. The emerging markets are growing and taking up key roles within the financial technology ecosystem. For instance, Indonesia's fintech industry generated a remarkable USD 329 million in 2020, with the payments industry alone bringing in a staggering USD 158 million. Modern online buying habits, rising smartphone penetration, and changing lifestyles will also drive the regional market during the forecast period.

North America will rise at a significant growth rate. The region is characterized by the presence of numerous prominent market participants. Additionally, North America has been a pioneering consumer of cutting-edge products. The usage of flexible payment methods is also being driven by the growing quantity of automated stores in the United States. The widespread use of flexible payment options in North America is typically attributable to the growth of web-based business. Applications for remote payments are being created by a few companies, enabling customers to make purchases from anywhere. For example, Sum-up announced the launch of flexible payments and invoicing across Europe in 2020 to assist customers in making payments securely and remotely through mobile devices. Extension of the fuel classification is anticipated to result from the growing use of virtual terminals for distant charging. These elements are expected to drive the region's P2P payments market.

 

Key Market Players

  • Alibaba.com 
  • Apple Inc. 
  • Circle International Financial Limited 
  • Google LLC 
  • One97 Communications Limited (Paytm) 
  • PayPal Holdings Inc. 
  • Square, Inc. 
  • WePay Inc.
  • Wise Payments Limited 
  • Zelle

 

Recent Developments

  • 2022 - Alibaba.com announced the introduction of Energy Expert, a sustainability platform that will assist clients globally in measuring, analyzing, and managing the carbon emissions their business operations and goods produced. To help clients accelerate their sustainability journeys, the software-as-a-service products also offer actionable information and energy-saving suggestions.

 

Global P2P Payments Market: Segmentation

By Transaction Mode

  • Mobile Web Payments
  • Near Field Communication
  • SMS/Direct Carrier Billing
  • Others

By End-User

  • Consumer Credit Payment
  • Real Estate Payments
  • Student Payment
  • Small Business Payment

By Application

  • Media & Entertainment
  • Energy & Utilities
  • Healthcare
  • Retail
  • Hospitality & Transportation
  • Others

By Regions

  • North America
  • Europe
  • Asia-Pacific
  • LAMEA
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