Global Digital Payment market was valued to be US$ 89.6 billion in 2021, and it is anticipated to reach US$ 228.37 billion by 2028 at a CAGR of 14.3% over the forecast period 2022–2028.
Westford, USA, Nov. 29, 2022 (GLOBE NEWSWIRE) -- The number of digital payments continues to grow with more people using electronic methods to pay bills, buy goods and services, and transfer money. Annual global digital payment market volume is expected to reach $8.5 trillion by the end of 2022, which is further expected to surpass a valuation of $15.17 trillion by 2027 at a growth rate of 12% according to a report by World Bank. A big reason for the increase is that mobile banking is becoming more popular, as are virtual and e-commerce payments. The number of mobile wallets worldwide has grown from fewer than 2 million in 2016 to 2.8 billion in 2020. As per our study, more than 74% of the global population is projected to make use of mobile wallet by 2028.
SkyQuest's analysis revealed that the main drivers behind the growth of the global digital payment market are increasing mobile adoption, increased spending on luxury goods, and growing e-commerce. In terms of mobile adoption, it was found that by 2025, more than half of all payments will be made on a mobile device. This increase in mobile payments is likely to be driven by increases in smartphone ownership and usage, as well as rising incomes in developing countries. Currently, more than 5.8 billion population is having smartphone and around 30% of them are making use of the device to perform the digital transactions. In fact, this number is surprisingly high in India due to strong proliferation of UPI. For instance, In July 2022, India processed over 6.8 billion UPI transactions, which went on to increase to 7.3 billion in October 2022.
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Meanwhile, e-commerce is also projected to experience strong growth. By 2025, it is expected that e-commerce will account for almost one-third of global retail sales. However, while the growth of the digital payment market looks promising, there are some challenges that providers will need to address. For example, high costs and security concerns are two major challenges that providers will need to address. SkyQuest also found that there are some potential areas for future growth in the digital payment industry, such as biometric payments and peer-to-peer payments.
SkyQuest Survey Reveals Favorable Reward Program is Spurring Growth of Digital Payment Market
According to a study by SkyQuest, there is potential value in rewarding customers for spending via digital channels, including through the use of rewards programs. The study offers a detailed look at how digital payment platforms and rewards programs can help businesses reach consumers, reduce customer churn, and boost revenue. We found that about half of American adults have used a mobile payment platform in the past 12 months. This includes platforms such as Google Wallet, Apple Pay, and Samsung Pay. The study found that 59% of users say they are likely to use a mobile payment platform again in the next 12 months. In addition, 85% of current users said they were satisfied with their experience using a mobile payment platform.
We have assessed how two types of rewards programs in the global digital payment market- cash and points/credits - could be used to increase customer loyalty and purchase frequency on digital platforms. Cash rewards are the most common type, 72% of customers who receive rewards receive cash instead of points or credits. Rewards with fewer tangible benefits tend to be less satisfying to consumers and generate lower retention rates than rewards with more tangible benefits such as vouchers for merchandise (72% satisfaction) or discounts on future purchases (70% satisfaction). Credit rewards are also popular, 66% of users who receive rewards receive credits that can be spent on future purchases, compared with only 39% who receive cash rewards.
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Mobile Payments to Generate the Highest Revenue in Digital Payment Market
SkyQuest's analysis of digital payment demand shows that mobile payments are the fastest growing segment in the global digital payments market, with a CAGR of 17%. This is followed by online and contactless payments, which both have a CAGR 12%. The key drivers of this growth are the increasing number of smartphone users and the rise in ecommerce spending. The number of smartphone users has increased from 2.2 billion in 2016 to 5.8 billion in 2021, and is expected to grow to 6.8 billion by 2026 in the global digital payment market. On the other hand, more than 6.6 billion smartphones are currently in the use around the globe. Furthermore, ecommerce spending is forecast to grow from $5.2 trillion in 2021 to $8.1 trillion by 2026. This rise in digital payment demand is likely to have a significant impact on the banking sector.
SkyQuest estimates that the total value of digital payments made using cards, smartphones, and other devices will reach $15.17 trillion by 2027. This is likely to lead to a decline in the value of traditional banking products such as loans and deposits, and an increase in the value of banking assets such as deposits in digital banks.
Among the continents, Asia-Pacific accounted for the largest share of the mobile digital payment market in 2021 with a value of $3.1 trillion. North America was second with a value of $2.9 billion, while Europe was third. However, despite this growth, there are still some challenges that need to be addressed when it comes to digital payment market adoption. One issue is the lack of familiarity among consumers with online payment methods. Another is the high cost associated with traditional payment methods such as Visa or MasterCard. There are also concerns about fraudsters using digital payments to steal funds from unsuspecting customers. However, these issues are being tackled by various organizations and institutions such as banks and governments around the world.
Top Players in Global Digital Payment Market
1. More merchants are accepting digital payments: According to a study by Shopcore, 67% of merchants globally now accept digital payments, up from 33% in 2018. This growth is likely due to the widespread adoption of mobile and online platforms, as well as the decrease in the cost of processing digital transactions.
2. Increasing demand for mobile wallets: One of the most popular types of digital payment solutions is a mobile wallet. These apps allow consumers to make purchases through their smartphones without having to carry cash or worry about losing their debit or credit cards. In fact, SkyQuest estimates that annual global mobile wallet volumes will reach $287 billion by 2022.
3. More banks are investing in technology: Major banks in the global digital payment market are investing in cutting-edge technology that can help them process and approve more digital payments faster. JP Morgan Chase, for example, recently announced a new product called ChasePay that allows customers to make and receive payments through their phones even if they don’t have a bank account.
4. Fraudsters are starting to target digital payments: Fraudsters have been known to target all forms of payment, but they seem to be focusing more on digital payments these days. In 2021, alone, there were more than 2 million incidents of fraud in the U.S. involving credit cards and other forms of payment, making it one of the top financial crimes concerns for consumers and businesses alike.
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Top Players in Global Digital Payment Market
- Aliant Payments (US)
- Total System Services, Inc. (US)
- Aurus Inc. (US)
- Authorize.net (US)
- Adyen (Netherlands)
- Wirecard (Germany)
- Financial Software & Systems Pvt. Ltd. (India)
- Global Payments Inc. (US)
- PayPal Holdings Inc. (US)
- ACI Worldwide, Inc. (US)
- Novatti Group (Australia)
- Fiserv Inc. (US)
- Sage Pay Europe Ltd. (UK)
- WEX Inc. (US)
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