The global payment processing industry is booming. In the next few years, it is expected to reach an estimated $5.5 trillion in annual sales. But it wasn’t always like this. The first commercial payment processing service was launched in the United States in 1958. Today, the payment processing industry has evolved into a sophisticated system that allows consumers to make secure online purchases. With the growth of online commerce, the demand for payment processing solutions has also increased. In this article, we will be exploring the payment processing solutions market and its various segments, including point of sale (PoS) terminals, mobile devices, and online digital wallets. We will also be exploring the market drivers and restraints for the global payment processing solutions market.
Point of sale (PoS) terminals
The PoS terminal is a electronic device that allows merchants to process payments through credit card readers, debit card readers, and other payment terminal interfaces. Currently, the most popular PoS device is the ApplePay. In recent years, the adoption of mobile PoS terminals has seen significant growth, driven by the growth of mobile commerce. The PoS terminal is used to collect payment and record customer information. It has also been used to facilitate in-store payments, loyalty rewards, gift cards, and coupons. The PoS market is segmented based on type, terminal type, and payment method. The most popular segment in the PoS terminal is contactless PoS, which is used in near field communication (NFC) terminals. The PoS market is also segmented by country. Currently, the most popular type of PoS devices in the U.S. is the mag-stripe PoS terminals, which are used for accepting credit cards and other payments. In Europe, the most popular PoS devices are the NFC PoS and the embedded PoS terminals.
Emerging markets are now adopting mobile wallets at a rapid pace. The growth of mobile banking and financial services on smartphones and tablets is increasing the demand for mobile PoS terminals. Many of these devices do not have physical card readers, making them incompatible with the mag-stripe PoS terminals. In developing countries, the adoption of mobile PoS is very low due to the lack of awareness about the security and convenience of mobile payments. The most popular mobile device used for payments is the smartphone. The rise of Android and iPhone smartphones has led to an increase in the number of online retailers that accept mobile payments. Currently, Android leads the mobile OS market with the largest share of the online payment market.
Online digital wallets
Online digital wallets enable users to store and manage payment credentials, such as a credit card or loyalty card, in a single digital location. The most popular online digital wallet is probably the Google Wallet. Google Wallet was launched in 2011 as an attempt to rival the PayPal ecosystem. However, the company failed to gain significant market share in the Payments industry. In 2017, Google announced that it was discontinuing the service. Other leading online digital wallets include Amazon, Apple, Samsung, and Microsoft. Currently, there are over 400 million active users of online digital wallets. The growth of the online digital wallet market is being driven by the growth of e-commerce adoption. Currently, online shoppers in India account for the highest share of online purchases. The online digital wallet market is also being targeted by startups that aim to improve consumers’ experience while using online payments.
The mobile application is becoming a key enabler for the growth of the mobile payments market. The most popular mobile payment method in India is the drop-off mode, which was first introduced by Reliance Jio. In 2017, Jio extended the availability of this service to all mobile wallet users. Currently, there are over 100 million users of mobile wallets that support this service. Other emerging markets are also embracing this trend. In Brazil, over 27 million transactions were recorded in 2017 through mobile wallets. In China, mobile payments through QR codes and mobile apps are becoming more popular.
Increasing Adoption of BPSN Technology
The adoption of blockchain technology in the global payment processing solutions market is still at a very early stage. However, it can be expected that the demand for BPS technology will increase in the future. BPS technology has the potential to improve efficiency in the payment processing system. It can also improve security by recording each payment process individually. BPS technology has been used in select sectors, such as banking, but it has yet to be commercialized on a large scale.
Payments Europe and Asia-Pacific to Lead Growth
The payments market in Europe is gradually emerging from the crisis. The closure of many traditional banks has led to an increase in the adoption of online banking and payment solutions. Currently, more than half of all payments in Europe are conducted online. The payments market in Asia is also growing rapidly. China is the largest market for payments and is also the center of a payments industry that spans multiple regions. In March of 2018, the Chinese government announced plans to standardize the country’s digital currency payments. This move aims to create a system that is fully integrated with existing payment infrastructure.
Restraints on the Global Payment Processing Solutions Market
The growth of the global payment processing solutions market is being restrained by the increasing penetration of online payments. Currently, over half of all retail payments are made online. In countries where online payments are widely accepted, retailers are not necessarily going to a dedicated PoS terminal. This could reduce the overall adoption of payment processing solutions. Another restraint on the global payment processing solutions market is the increase in fraudulent online transactions. Consumers should be careful when using online payment services. They should always ensure that the website they are visiting is secure and the transaction is done via a trusted and secure channel.
Key Industry Participants (Payment Banks)
Some of the key industry participants in the global payment processing solutions market include KeyCorp, Fiserv, Visa, MasterCard, American Express, and Discover.
The global payment processing solutions market is expected to witness huge growth over the next few years. The payments market in Europe and Asia Pacific is particularly attractive due to the rise in online commerce. However, the growth of the payments industry could be limited by the growing problem of fraudulent online transactions. Payment institutions need to be careful while processing online payments. Consumers should also be careful while selecting a payment gateway.