Digital Payment Market Research Report and Outlook by 2028

The global digital payment sector is projected to expand from US$ 89,045.67 million in 2021 to US$ 243,426.71 million by 2028, reflecting a compound annual growth rate (CAGR) of 15.4% during this period.

The advancement of the digital payment sector is crucial for enhancing a nation's economy, as it can improve productivity, increase transparency, boost tax collection, promote financial inclusion, and generate new economic opportunities. The proliferation of digital payment solutions globally is a significant driver of this market's growth. Online retailers are incentivizing customers to embrace digital payment options through promotions like point-of-sale discounts, which further stimulates demand. The swift development of e-commerce, mobile payment technologies, and the rising popularity of mobile wallets are pivotal elements fueling the expansion of the digital payment market. Additionally, governments around the world are implementing measures to encourage digital payments, which not only supports economic growth but also benefits consumers in various regions.

MARKET DYNAMICS

The rise of e-commerce platforms and the emergence of digital wallet providers have significantly accelerated the adoption of digital payment methods. Digital wallets often offer appealing discounts and cashback incentives to attract users to this payment option. The ease of use and the growing prevalence of smartphones have also played a vital role in the widespread acceptance of digital wallets. Furthermore, digital wallet companies are promoting the use of their services for offline point-of-sale transactions in locations such as shopping malls, supermarkets, grocery stores, restaurants, and gas stations, thereby broadening their market appeal. These point-of-sale transactions are anticipated to dominate the digital payment landscape in the near future. Consequently, digital wallets are witnessing rapid growth and are integral to the overall expansion of the digital payment market. However, the growth of this sector faces challenges, particularly from cyberattacks, which represent a significant threat to the payment industry.

IMPACT OF COVID-19

North America has experienced the most substantial impact from the COVID-19 pandemic on the digital payment market across various sectors. As vaccination efforts progress and businesses resume operations, an increase in demand for digital payment solutions is expected in the upcoming years. The initial half of 2020 saw a decline in sales revenue due to lockdowns and operational halts in numerous industries, but the latter half of 2020 witnessed a notable rise in online sales. Market participants are investing in technologies aimed at enhancing customer experience to drive sales and revenue. The adoption of artificial intelligence, cloud computing, edge computing, machine learning, and IoT technologies is increasing in North America. Moreover, the advent of 5G technology, in conjunction with IoT, is likely to create lucrative opportunities for improving efficiency and reducing resource wastage across various sectors. Therefore, the digital payment market in North America is anticipated to experience significant growth post-COVID-19.

REGIONAL OVERVIEW

Numerous governments globally are spearheading initiatives to digitize payment systems, which fosters economic growth and benefits end-users in many nations. A notable example occurred in June 2021 when Okay and FSS Technologies collaborated to enhance authentication security for consumer payments, particularly focusing on transaction validation and authentication on mobile devices. FSS is actively expanding its commercial reach in Europe by leveraging its advanced products, technologies, and solutions. Governments are making substantial investments in the digital payment sector and are undertaking various initiatives to modernize payment processes. For instance, the Indian government has implemented several initiatives to boost transaction rates through Immediate Payment Service (IMPS), Unified Payments Interface (UPI), Unstructured Supplementary Service Data (USSD), Aadhar Pay, and debit cards. The shift towards digital payments is being driven by initiatives like Digital India, the launch of UPI, and the establishment of the 14444 helpline. Various companies, including IRCTC (Railways), Makemytrip, Yatra, Ibibo, Cleartrip (Airlines and hotels), Trivago (hotels), redBus (buses), and Bookmyshow (events), are actively working to enhance their product offerings for online transactions, thereby contributing to the growth of the digital payment market in India.

The size of the digital payment market has been assessed through a combination of primary and secondary research methodologies. Initially, extensive secondary research was conducted using both internal and external sources to gather qualitative and quantitative data related to the digital payment market. This approach aimed to provide a comprehensive overview and forecast for the digital payment market across all relevant segments and regions. Following this, numerous primary interviews were held with industry participants and experts to validate the findings and gain deeper analytical insights. These participants included various industry professionals such as VPs, business development managers, market intelligence managers, and national sales managers, as well as external consultants like valuation experts, research analysts, and key opinion leaders specializing in the digital payment sector.