The global voice-based payments market size was worth USD 5.92 billion in 2021. It is expected to reach USD 13.62 billion by 2030, growing at a CAGR of 10.98% during the forecast period (2022–2030). The way people engage with their electronics is being radically changed by voice technology. People utilize voice capabilities for various tasks, such as determining how many milliliters are in a cup and locating nearby gas stations and supermarket stores. With a voice-based payments system, people with feature phones can avail of UPI and make payments without using the internet, elevating digital costs to new heights. Voice technology, which uses IVR (interactive voice response) as a voice assistant and is supported by AI and machine learning, allows users to do financial transactions easily.
Setting up a voice payment account is similar to establishing a payment account through an electronic wallet. In either scenario, users must first link their bank account or credit/debit card to their devices. The standard wallet scenario requires the user to open the app, manually enter the recipient and amount, and then tap the OK button to execute the transaction. In contrast, customers can make voice payments by merely speaking to their smartphones. These payment methods are becoming more and more common.
Cash and credit cards are less common as people use their phones for purchases more frequently. Increasing numbers of individuals are shopping for goods and services with their smartphones instead of their wallets, including food and beverage, groceries, clothing, and gas. The market is anticipated to expand due to financial institutions and merchants implementing voice-based payments to access personal data quickly and comprehend consumer behavior. Voice-activated controls have begun to be used by mobile payment companies like Zelle, PayPal, and Venmo for their users to do banking and financial tasks. Traditional banks like Wells Fargo also integrate conversational speech interfaces into their mobile banking apps to make it easier for consumers to access all banking services.
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Growing Use in Online Shopping to Augment Market Growth Prospect
The popularity of voice-based payments for online purchases is encouraging market expansion. Voice-based payments, which necessitate the user to converse into a speaker on their smartphone to approve a purchase, are gradually replacing conventional credit card transactions. The customer can enter the transaction data and select "pay with voice" when purchasing online. This technique is becoming increasingly popular because it eliminates the need to enter credit card information or register for additional apps. The consumer's life is made even more convenient by this technique. Due to their comfort with voice technology, consumers can use it in a variety of settings. Voice is increasingly the preferred way for customers to use their devices, whether paying money to someone, placing an app order for groceries, or engaging with their preferred retailer. These aspects propel the voice-based payments market to expand further.
Governmental Efforts to Encourage Digital Payments to Aid Growth
Many countries are using ICT or information technology to strengthen digital economies worldwide. Many countries are making an effort to modernize the payment process. Among the most critical factors for a country's economic development is the availability of digital payment options. It leads to greater productivity, economic growth, tax revenue, financial inclusion, and new possibilities for end users. It also increases transparency. The Indian government has launched multiple programs to support the development of digital payment methods. Digital India's introduction of the Unified Payments Interface (UPI) and hotline numbers facilitated the transition to digital payments. These kinds of initiatives aid in the marketing of digitalization and increase awareness of the benefits of utilizing contemporary technology.
Issues Concerning Voice-Based Payments' Security and Privacy to Restrict Market Growth
Voice-based payments raise privacy and security issues since customers might not be conscious that their speech is being collected by computer software, which converts the input into digital data. Voice commands are sent to mobile devices across cellular, Bluetooth, and Wi-Fi networks, all vulnerable to hacking. When using mobile payment apps, users do not understand what information is recorded through the app's microphone. Unintentionally, voices may be exchanged when there are other persons around. This impedes the voice-based payments market from expanding.
Advancing Voice-Payment Technology in Banking to Boost Market Opportunities
With each new piece of software launched, voice technologies are used by sectors ranging from banking to eCommerce. Each year, voice-enabled virtual assistants grow more significant in popularity, and the financial industry is one of its top users. Voice payments are increasingly replacing on-the-go tapping as more people use smartphones for banking services. Voice-enabled solutions are driven mainly by personalization. Voice interactions can offer insightful information about consumer demands and behavior, enabling banks and FinTech firms to provide customized services with a distinctive brand touch. Several FinTech pioneers are assisting banks and financial organizations in gaining a virtual voice. This presents significant potential for the voice-based payments market in the upcoming years.
The global voice-based payments market is segmented into component, enterprise size, end-user, and region.
The component segment includes Software and Hardware.
The Software section is projected to hold the largest market share during the forecast period. It is anticipated that virtual assistants like Google Assistant, Alexa, and Siri will play an increasingly important role in the development of voice-based payment solutions for traditional banking, which will, in turn, drive growth in this market segment. Numerous voice-based payment companies actively work to improve their offerings is another positive sign for the industry and will encourage its continued expansion. For instance, Google announced the debut of speech-to-text tools in November 2021. These features let customers use voice commands to add their account details to the app so that they can make payments.
The enterprise size segment includes Large Enterprises and Small & Medium-sized Enterprises.
The Large Enterprise section is projected to have the largest market share over the forecast period. The demand for payments made through voice recognition is mainly growing among large organizations. This is because numerous large enterprises are concerted efforts to implement contactless payment solutions. For instance, a relationship between Walmart and Google was announced in 2019. In line with the partnership's plans, Walmart Voice Order—a new voice ordering feature compatible with various Google Assistant-powered platforms—would be available. Large corporations and banks increasingly employ paperless account opening services, demanding voice-based payments. It is anticipated that the category will advance due to various banks' efforts to get a competitive edge and solidify their market positions.
The end-user segment includes BFSI, Automotive, Healthcare, Retail, Government, and Others.
The BFSI industry is projected to hold the largest market share over the forecast period. Several banks are implementing voice assistants worldwide as part of their attempts to streamline their business processes and improve customer satisfaction. For instance, the retail banking business NatWest revealed plans in 2019 to test voice banking with 500 of its clients. The project planned to provide bank customers accesses to Google Assistant to do various straightforward financial operations. Banks are using voice-based payments to better serve their changing client base, and as a result, voice-based payment service providers are improving payment options for visually impaired people.
Region-wise, the global voice-based payments market comprises North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.
Which Region Accounts for Most Demand for Voice-based Payments?
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North America is expected to command the highest market share during the forecast period. This dominance can be ascribed to key participants in the voice-based payments market and their deployment of cutting-edge technology across various industries. The growing prevalence of contactless payments in North America is projected to help the rise of the regional market. According to MasterCard Contactless Consumer Polling research, more than half of consumers in the United States use at least one type of contactless payment method. These consumers have been making cashless payments regularly. In addition, the growing popularity of smartphones has contributed to an increase in the demand for payment systems based on voice recognition. Such advancements are projected expected to boost the voice-payments market in the region.
Asia-Pacific will expand at the fastest growing CAGR over the forecast period. Increased use of voice-based payment, improved government emphasis on advancing technology adoption, and the rising demand for voice-based consumer electronics products like laptops, smartphones, and smartwatches, are the main drivers of the market growth in Asia-Pacific. The expansion can also be ascribed to a rising understanding of the advantages of voice-based payments in China, India, and Japan. The aggressive campaigns being run by various organizations in Asia-Pacific to encourage the adoption of voice-based payments are also anticipated to aid in the market expansion. For instance, the National Payments Corporation of India declared that it was piloting voice-based payments services for feature phones in India in July 2021. NPCI has previously created digital payment systems, including the Aadhaar Enabled Payment System and Unified Payments Interface.