A payment processing solution is a process or service that automates the transaction of payments among retailers and merchants. These processing solutions process, verify, accept, or decline online payments or point of sale (PoS) transactions through a secured internet connection.
The global payment processing solution market is expected to grow at a CAGR of 10.8% during the forecast period, 2019–2026.
With the emergence of net banking, smart cards, and mobile payments, among others disrupting legacy business models, payment processing solutions are projected to witness a massive technological transformation. In July 2019, ICICI Bank (India) announced the launch of InstaBIZ, a digital platform curated for MSMEs and self-employed customers. With this, MSMEs can access transactions ‘on-the-go’ without visiting a bank branch, which would enable customers to undertake business banking transactions instantly and digitally.
The rapid adoption of technological advancements such as Near Field Communication (NFC), mobile PoS, and real-time payment methods is expected to drive the demand for payment processing solutions during the forecast period, 2019–2026. For instance, in July 2019, AvidXchange announced a strategic partnership with SAP Concur. This partnership would allow Concur invoice customers to process electronic payments through the AvidPay network of suppliers.
Credit card payment has become the most prevalent payment method for merchants to reach international markets by integrating payment gateway into its business processes. At present, customers prefer credit card or debit card payment methods with the advent of interconnected banking and credit card processing networks, which has drastically accelerated the purchase rate in the market. For instance, in July 2019, OPEN, an SME focused neo-banking platform, announced a strategic partnership with Visa to launch innovative products such as business credit cards for SMEs, payment gateway acquiring, and real-time payments. This partnership would enable the companies to co-create and innovate solutions on credit, expense management, and payment processing for small-scale businesses.
The hospitality industry is projected to be a significant contributor to the payment processing solution market, which includes lodging, event planning, food and drink service, transportation, theme parks, cruise line, and other areas within the tourism industry. Thus, to streamline business processes, mobile payment solutions are gaining popularity in the hospitality industry. For instance, in September 2019, RoomKeyPMS announced the launch of RoomKeyPMS Payments, a product designed to offer hotel-centric solutions to streamline the entire payment process for hoteliers.
North America is expected to witness dynamic growth in the payment processing solution market during the forecast period, 2019–2026. The region is a leader in retail, banking, and other industry verticals. Moreover, North America is an early adopter of technological advancements that accelerate the use of digital transactions in the region. Improvements in transaction processes such as reducing card processing and maintaining charges are expected to drive the demand for payment processing solutions in North America. For instance, in April 2019, Payroc LLC launched card brand-compliant RewardPay surcharge and CashRewards cash discount programs designed to help merchants reduce or eliminate card processing fees and avoid penalties associated with non-compliance. With this solution, merchants could virtually eliminate card processing fees by 60–90%.
Europe is expected to witness significant growth in the payment processing solution market during the forecast period, 2019–2026. Europe aims to be a single digital market, which entails the decentralization of financial services and stringent security regulations. According to Adyen, Swiss, Belgian, Irish, Dutch, and German shoppers are increasingly purchasing goods across borders. On account of this cross-border purchase of products, Europe’s online retail market is growing exponentially. Additionally, according to the European Central Bank, card payments in the European Union accounted for 52% of the total number of non-cash payments with credit and debit transfers accounting to 24% and 19%, respectively.
Asia-Pacific is expected to grow at an accelerated pace in the payment processing solution market during the forecast period, 2019–2026. The increasing use of smartphones and the internet fuels the demand for payment processing solutions. Additionally, the penetration of market players into the region’s marketplace further drives the need for payment processing solutions. For instance, in July 2019, PayU, a Naspers fintech firm, entered Southeast Asia with the acquisition of Red Dot Payment with more than 600 million consumers and rapidly growing access to the internet in the region. Naspers is famous for its payment and fintech businesses in markets such as India, Latin America, Africa, and Eastern Europe. Additionally, in August 2018, PayPal announced a partnership with HDFC Bank to drive incremental digital spends. With this partnership, HDFC Bank will be able to reach millions of existing and potential new PayPal customers in India.
Some of the prominent players in the global payment processing solution market are Adyen, Alipay, Authorize.Net, BluePay Processing LLC, BlueSnap, CCBill, Due, First Data, Global Payments, Jack Henry & Associates, Merchant-Accounts.ca, PayPal, Paysafe, PayU, Square, Stripe, and Wirecard.