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Global Next Generation Payment Technology Market Research Report 2018 To 2023

  • Id : RNR-54183
  • Category : Service Industries
  • Publish Date : 2018
  • Pages : 121
  • Publisher : BIS Research
License Type

With the exponential growth of mobile and digital payments, service providers and customers have expressed interest in next generation payment technology, mostly due to change in spending pattern and increased convenience. The massive infrastructure changes required to upgrade outdated and legacy payment systems and the increasingly high number of security standards imposed by the regulatory bodies have given impetus to usage of latest payment technology. Technology companies and financial institutions have laid a foundation to create a simple, global and secure payment solution which will enable customers to make payments easily. There is a dynamic shift in the security requirements and that has boosted overall business of companies from every vertical or sector. 

The advent of digitalization in the payment transactions have caught the attention of global industrial ecosystem and it is expected to drastically change the dynamics of the payment technology market by creating new participants across mobile network carriers, handset original equipment manufacturer (OEM), terminal and readers’ manufacturers, near field communication (NFC) technology enablers, Europay MasterCard Visa (EMV) chip makers and financial institutions among others. All major players from each payment technology aim to record good share of revenues from payment technology products and solutions. Traditional stakeholders such as issuers, payment networks, and acquiring banks will need to focus on maintaining their current share of revenue from card transactions to newer forms of payment transactions such as mobile app and mobile wallet.

Next generation payment technology has helped to deliver secure financial services in various circumstances where threat to login data and financial information prevails. Latest payment technologies such as Europay MasterCard Visa (EMV) Chip, Near Field Communication (NFC), Bluetooth Low Energy (BLE), Quick Response Code (QR Code) and Magnetic Secure Transmission (MST) have made the payment transactions both technically and commercially feasible.

Evident transformation has taken place in the world of digital and mobile payments in the last 4 years (2013-2018). The rise of internet, the success of mobile point-of-sale devices and smartphones in terms of usage by various applications and the availability of large unbanked population in emerging economies have created new and exciting opportunities for service providers.  These opportunities have been sensed by technology, and commercial organizations and by even telecommunication players. Banks and other financial institutions in the financial transaction ecosystem have developed in-house payment products in order to preserve their payments revenues and take advantage of emerging payment platforms such as mPOS, mobile wallets, virtual terminals, mobile apps and mobile money.

The next generation payment technology market is expected to progress at a significant rate since the end customers belong from diversified application portfolio ranging from retail to healthcare. The growth for this market is being driven by factors such as:

•    Massive proliferation of smartphones and tablets with payment technology capabilities
•    Growing popularity of wearable technology
•    Increasing adoption of e-commerce and m-commerce services

The payment technology market is expected to grow in the coming future due to its convenience, cost effectiveness, durability, portability and reliability.

However, the payment technology market consists of certain negative challenges which are inhibiting the overall growth for this market:
•    Cost of deployment of emerging payment technology
•    Integration of payment technology
•    Misuse of stored data/privacy breach

The payment technology market consists of certain opportunities which can lead to augmentation of the payment technology market and its overall growth:
•    Future in e-commerce
•    Global adoption of digitalization services

The payment technology market consists of certain market restraints which may stagnate the payment technology and hinder the overall growth for this market:
•    Pressure of big players
•    Lack of innovative business models

The cost of implementation of next generation payment technology solutions is expected to decline substantially due to the technological advancement and increasing number of business expansions, acquisitions, collaborations and product developments, the market will witness a gradual decrease in the cost of such products. Also the devices and applications have improved to a better acceptance rate among the end-user. Further advancement is expected in the design and concept of payment technology as more established technology players such as Apple, Samsung, Google, MasterCard, Visa, PayPal, Ingenico, Alipay, Square, Verifone, First Data, Cayan, Adyen, and Worldpay etc. launch their product in the market.

The following figure shows estimation of payment transaction value for next generation payment technology from 2018 to 2023. Transaction value is estimated for 3 types of payment technology which are EMV Chip, NFC, and QR Code. For other 2 types of technology namely MST and BLE beacons, estimation was done based on transactions volume. Transaction volume is forecasted from 2018 to 2023 for two next generation payment technologies, MST and BLE.

With associated advantages of multi-level security, convenience and advanced quality, the global next generation payment technology market will witness unprecedented growth and is anticipated to have double digit growth rate in the forecast period. The total transaction value through payment transactions from latest payment technology is estimated to grow over $14,000 billion by 2023 at a CAGR of 35.98% through the forecast period. The retail application segment is expected to grow at a CAGR of 36.64% from 2018 to 2023 as the demand for payment technology integrated smartphones, tablets, and wearable devices and demand of terminals, beacons, readers, point-of-sale devices for merchants is increasing. Also, the mobile payments and mobile point-of-sale entitled transactions are more accepted when compared to payment transactions using fixed POS devices, magnetic strip cards, and bank account transfer as they are more convenient to carry out transactions.

The NFC payment technology market size is growing at the highest rate due to increasing adoption of contactless payment technology in mobile handsets and wearables while EMV will dominate the payment technology market by 2023. Ease of integration of NFC payment technology with existing payment systems and increase in payment transaction is driving the growth of the market.

North America accounted for highest share in global payment technology market with robust growth in transaction value throughout the forecast period. North America is expected to grow at a CAGR of 58.26% in the forecast period from 2018 to 2023. Asia Pacific is the next region leading the payment technology market and will under-go a fast growth rate of 41.58% throughout the forecast period.

Europe is expected to have largest market share of the contactless payment technology market in 2018 due to technological advancements and increasing contactless smart cards such as NFC enabled cards adoption. APAC is anticipated to have the highest growth rate during the forecast period due to increasing number of contactless payment technology enabled smartphones and mobile devices in countries such as China, Australia, Japan and India.

Next generation payment technology has a huge potential market since it is one of the fastest growing markets globally, progressing with rapid integration of technology and financial services such as wearable products and consumer electronics among others. The global payment technology market is expanding and exploring new avenues where it can be deployed, implemented and integrated with existing systems. The government of most countries are formulating regulations and directives and organizations are encouraging heavy investments in major research and development projects to support advanced innovations in payment technology market. As the future of prominent applications and sectors becomes increasingly coupled with payment technology, it has given impetus to investors to direct more funds towards financing more next generation payment technology initiatives and strategies.
The next generation payment technology market is growing steadily owing to the need of secure and simple payment transactions in the present day. The next generation payment technology ecosystem has been supportive in addressing security, authenticity, and latency, inconvenience issues of the individuals doing payments through timely, accurate and convenient deployment of payment technology solutions. The development in the market is accredited to the enormous demand of stringent payment security regulations, innovation by technology companies, reforming payments landscape, speed of transactions, ease of use, secure and robust systems against potential attackers to systems among others. By virtue of this development, technology companies, financial institutions, e-commerce companies, payment service providers and payment hardware suppliers among others have adopted payment technology products to ensure simplified and time saving transactions.

The increasing proliferation of smartphones, popularity of wearable technology, increasing adoption of e-commerce & m-commerce, embrace by banking & financial services, government initiatives, entry of leading technology companies and availability of a diverse range of payment technology products & solutions are expected to keep driving the industry despite the financial, technological and security challenges restraining the ecosystem in several key market regions. Therefore, the global payment technology market estimation and f