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The digitization of daily life is making phones and connected devices the preferred payment tools for consumers — preferences that are causing digital payment volume to blossom worldwide.
The Payment Processing Industry Overview
As noncash payment volume accelerates, the power dynamics of the payments industry are shifting further in favor of digital and omnichannel providers, attracting a wide swath of providers to the space and forcing firms to diversify, collaborate, or consolidate in order to capitalize on a growing revenue opportunity.
More and more, consumers want fast and simple payments. Rising e- and m-commerce, surges in mobile P2P, and increasing willingness among customers in developed countries to try new transaction channels, like mobile in-store payments, voice and chatbot payments, or connected device payments are all increasing transaction touchpoints for providers.
This is helping payments become seamless, allowing firms to boost adoption, build and strengthen relationships, offer more services, and increase usage.
But payment ubiquity and invisibility also comes with challenges. Regulatory changes and geopolitical tensions are forcing players to reevaluate their approach to scale. And fraudsters are more aggressively exploiting vulnerabilities, making data breaches feel almost inevitable and pushing providers to improve their defenses and crisis response capabilities alike.
The Payments Industry Explained
In the latest annual edition of The Payments Ecosystem Report, Business Insider Intelligence unpacks the current digital payments ecosystem, and explores how changes will impact the industry in both the short- and long-term. The report traces the path of an in-store card payment from processing to settlement to clarify the role of key stakeholders and assess how the landscape has shifted.
It uses forecasts, case studies, and product developments from the past year to explain how digital transformation is impacting major payment processing industry segments and evaluate the pace of change. Finally, it highlights five trends that should shape the payments industry in the year ahead, looking at how regulatory shifts, emerging technologies, and competition could impact the payments ecosystem.
Here are some key takeaways from the report:
- Behind the scenes, payment processes and stakeholders remain similar. But providers are forced to make payments as frictionless as possible as online shopping surges: E-commerce is poised to exceed $1 trillion — nearly a fifth of total US retail — by 2023.
- The channels and front-end methods that consumers use to make payments are evolving. Mobile in-store payments are huge in developing markets, but approaching an inflection point in developed regions where adoption has been laggy. And the ubiquity of mobile P2P services like Venmo and Square Cash will propel digital P2P to $574 billion by 2023.
- The competitive payments industry landscape will shift as companies pursue joint ventures to grow abroad in response to geopolitical tensions, or consolidate to achieve rapid scale amid digitization.
- Fees, bans, steering, or regulation could impact the way consumers pay, pushing them toward emerging methods that bypass card rails, and limit key revenue sources that providers use to fund rewards and marketing initiatives.
- Tokenization will continue to mainstream as a key way providers are preventing and responding to the omnipresent data breach threat.
In full, the report:
- Explains the factors contributing to a swell in global noncash payments
- Examines shifts in the roles of major industry stakeholders, including issuers, card networks, acquirer-processors, POS terminal vendors, and gateways
- Presents forecasts and highlights major trends and payments events driving digital payments growth
- Identifies five trends that will shape the payments industry ecosystem in the year ahead
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The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of the fast-moving world of payments.
The companies mentioned in the report are: CCEL, Adyen, Affirm, Afterpay, Amazon, American Express, Ant Financial, Apple, AribaPay, Authorize.Net, Bank of America, Barclays, Beem It, Billtrust, Braintree, Capital One, Cardtronics, Chase Paymentech, Citi, Discover, First Data, Flywire, Fraedom, Gemalto, GM, Google, Green Dot, Huifu, Hyundai, Ingenico, Jaguar, JPMorgan Chase, Klarna, Kroger, LianLian, Lydia, Macy’s, Mastercard, MICROS, MoneyGram, Monzo, NCR, Netflix, P97, PayPal, Paytm, Poynt, QuickBooks, Sainsbury’s, Samsung, Santander, Shell, Square, Starbucks, Stripe, Synchrony Financial, Target, TransferWise, TSYS, UnionPay, Venmo, Verifone, Visa, Vocalink, Walmart, WeChat/Tencent, Weebly, Wells Fargo, Western Union, Worldpay, WorldRemit, Xevo, Zelle, Zesty, and ZipRecruiter, among others