The global payment security market size was valued at USD 33.96 billion in 2021, and is projected to reach USD 97.63 billion by 2030, registering a CAGR of 12.45% from 2022 to 2030.
Payment security is a system of security solutions and services to prevent financial fraud, unlawful transactions, and data breaches. Data encryption, firewalls, and data loss prevention (DLP) protocols protect all types of online financial transactions. Identity and access management, anti-malware, endpoint security, risk and compliance management, and intrusion detection are all included. This, in favour, contributes to the design of a reliable platform, minimises the loss of financial data through routine monitoring of criminal activity, and protects against ongoing cyber security risks. Consequently, payment security solutions are utilised extensively in the information technology (IT), healthcare, banking, financial services, and insurance (BFS) businesses.
Global expansion of the banking, financial services, and insurance (BFSI) business positively impacts the market forecast. Payment security aids banks in streamlining and automating finance management procedures, boosting operational effectiveness, and ensuring correct records throughout recurring processes, such as invoicing and reconciliation. In addition, the increasing acceptance of digital payment methods and the use of wireless networks in computing devices to facilitate payments are contributing to the expansion of the industry. In addition, several technological breakthroughs, including the incorporation of connected devices with the Internet of Things (IoT), machine learning (ML) and artificial intelligence (AI) solutions, are fueling the market's expansion. These technologies aid in monitoring transactions, tracing the location of financial crime, enhancing precision, safeguarding data, limiting risks, detecting fraud, and managing regulatory compliance. Increasing payment fraud, cyber-attacks, cyber-crimes, and worries over confidential and sensitive data favour the market's expansion.
The expansion of the payment security market is being propelled forward by the concurrently expanding need for digital payment systems. People's worry about the safety of their payment data has also given rise to the payment security market. The use of advanced payment security mitigates the inherent security threats associated with using digital payment gateways. Companies have a responsibility to strive toward reducing the security risks associated with digital payments. As a result, one of the essential things propelling the growth of the payment security market is the research and development of more advanced secure payment systems. Another critical factor propelling growth in the payment security market is the growing awareness among consumers about the importance of using secure payment channels. In addition, government activities aimed at elevating people's awareness of the need for data security and introducing new data security guidelines are essential factors driving the market.
The burgeoning e-commerce and retail industry in Asia-Pacific, the requirement for PCI DSS compliance, rising consumer spending on travel and accommodation, and the advent of artificial intelligence (AI) and machine learning are among the key trends driving market expansion. In addition, an increase in the use of electronic transactions and the advent of mobile-based payment systems such as Android Pay, Apple Pay, and e-wallets such as Google Wallet are anticipated to boost the industry. Several linked devices and wearables are gaining payment capabilities due to the internet of things (IoT) rise. MasterCard, for instance, has established a platform that enables various consumer products, including wristbands, key fobs, and jewellery, to function as payment devices. Visa Inc. is developing a connected automobile solution enabling consumers to pay for various services, including fuel, parking, and restaurants, from within the vehicle. IoT contributes to improving the precision of financial regulations and data modelling. Traditional payment transaction infrastructure has been restructured using machine learning. This aids in safeguarding data and providing consumers safety when doing online transactions, which is projected to promote market growth in the coming years.
The global payment security market faces several limitations, just like every other significant business that is now operational. The transition to using digital payment channels is currently underway in many businesses. However, the rate of adaptation to the new age technologies is not nearly as fast as it should be. This presents a considerable obstacle to entering the market for companies in the payment security sector. Another obstacle for the Payment Security business is the incapacity of firms to investigate security flaws and take steps to reinforce the platform. This is a problem because many organisations are unable to do both. In most instances, stronger regulations serve as a constraint, even though government standards encourage research and expansion in the payment security industry.
Currently, the Payment Security market is ripe with expansion potential. For the continued expansion of the Payment Security Market, the market's key participants must seize the available chances promptly. The key development opportunity for the Payment security business is the overall increase in digital payment platforms. Almost every app has its payment interface today. People have numerous payment apps on their mobile devices. The leading players in the Payment Security Market might capitalise on this opportunity to enhance payment security technologies and the industry as a whole. In the era of COVID 19, the expansion of the E-commerce market presents an opportunity to investigate the Payment Security Market. As every website evolves into a digital market interface, the Global Payment Security sector has numerous expansion potential. Payment security providers are engaged in research and development (R&D) and are intent on developing more innovative payment security solutions. The United States has an established consumer market that prioritises innovation. PayPal and Apple Inc. have a substantial presence in the region.
Encryption, fraud detection & prevention, and tokenization play a crucial part in securing consumer card data by transforming the name and numbers into tokens or encrypting it with algorithms. Detection and prevention of fraud is the most used payment security solution. It offers numerous fraud analytics solutions, including big data analytics, social media analytics, customer analytics, behavioural analytics, predictive analytics, governance, risk, and compliance solutions. These solutions are crucial to every electronic transaction that takes place. In 2021, the segment was valued at $9.17 billion. During the projection period, encryption solutions are expected to display the highest CAGR of 13.2 %. Using point-to-point encryption (P2PE), the card information is transformed into a string of digits. Due to budgetary constraints, small and medium-sized businesses cannot invest in fraud detection and prevention systems. Conversely, the rising demand for retail and e-commerce businesses to protect transaction data boost investments in encryption and tokenization solutions.
The security of card-not-present (CNP) payments and electronic transactions is crucial for businesses. Payment security problems and scams are rising due to the proliferation of mobile and POS transactions. These electronic transactions necessitate lower transaction fees, cryptographic methods for enhanced transaction security, quicker transaction settlement, and respite from the burden of chargebacks and product returns. The segment of POS-based platforms is anticipated to lead the market throughout the projection period. Growing consumer interest, the simplicity and comfort of online buying, and other conveniences are causing the POS-based platform to experience tremendous growth. Payment security companies employ diverse AI-based techniques for various goals, such as fraud detection and consumer engagement. It aids in the rapid analysis, prediction, and processing of system threats and frauds. This assists providers in supplying fraud detection and prevention solutions and accurately diagnosing system threats and data breaches.
In 2021, the market for payment security was dominated by large corporations. The daily occurrence of high-value transactions in major organizations compels them to adopt premium payment security solutions. In 2021, the small and medium enterprises market category was valued at USD 5.89 billion. The segment is anticipated to have a higher CAGR throughout the foreseeable future. Small and medium-sized businesses are increasingly using encryption and tokenization technologies. Small- and medium-sized enterprises (SMEs) are susceptible to cyberattacks and may lose financial information and other crucial documents, making payment security equally vital.
The retail and e-commerce businesses will be the leading revenue producers throughout the projected period. In 2021, it represented 30 % of the total market. Increasing smartphone usage, 4G technology adoption, and rising consumer buying power are accelerating the retail and e-commerce industries' adoption of payment security solutions. The travel & hospitality and, media & entertainment industries are anticipated to record a significant CAGR during the projected period. Increasing consumer spending and the expanding use of mobile payments and e-wallets contribute to the market's expansion.
While it is predicted that the region of North America will hold the most significant share of the overall market, it is also estimated that Asia Pacific will display the highest CAGR for the forecast period. The expansion that has taken place in APAC is partly attributable to the fact that there is a growing number of retail and consumer products startups in countries such as China, India, and Japan. The rise in the popularity of mobile payment methods among customers is driving an increase in the use of digital payment methods throughout the region. One of the vital development boosters for the regional market is China's thriving retail business, which has been around for quite some time.
The United States of America is a driving force behind the expansion of the North American market. Because the region is home to the headquarters of several significant market players, including PayPal, Bluefin, Braintree, and Elavon, it is expected to maintain its preeminent position for the forecast. Additionally, the region is home to several critical market participants, including big businesses and others.
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