Trusted Business Insights answers what are the scenarios for growth and recovery and whether there will be any lasting structural impact from the unfolding crisis for the Payment As A Service market.
Trusted Business Insights presents an updated and Latest Study on Payment As A Service Market 2020-2029. The report contains market predictions related to market size, revenue, production, CAGR, Consumption, gross margin, price, and other substantial factors. While emphasizing the key driving and restraining forces for this market, the report also offers a complete study of the future trends and developments of the market. The report further elaborates on the micro and macroeconomic aspects including the socio-political landscape that is anticipated to shape the demand of the Payment As A Service market during the forecast period (2020-2029).
It also examines the role of the leading market players involved in the industry including their corporate overview, financial summary, and SWOT analysis.
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Report Overview: Payment As A Service Market
The global payment as a service market size was valued at USD 5.1 billion in 2020 and looks set to grow at a compound annual growth rate (CAGR) of 15.8% from 2021 to 2027. Payment as a Service (PaaS) uses the SaaS model to streamline the payment for the customer. The merchants and Independent Software Vendor (ISV) play a integral role in the process. Digital payments are increasing day by day. Thus, payment service providers are enabling transactions through e-wallet, websites, and other applications. They accept the payment electronically with the help of credit cards, debit cards, or bank transfers. It helps in managing the transactions between a buyer and a seller. The consumers and sellers trust the platform as they offer risk-free and secure payment transactions and safeguards the payment information.
The payment industry has undergone a drastic change, and the traditional payment modules have been replaced by the new modules where the payment is just a click away. PaaS is not only altering the merchant landscape; however, banks are identifying that the increase in PaaS adoption is an opportunity to provide a trustworthy option for their customers. The financial crisis in 2008 has led to imposing new regulations on the banks to restructure their old model instead of developing a completely new model. Thus, after the integration of PaaS into their practice, banks have realized the probable solutions that are scalable, secure, and can process numerous transactions at reduced costs.
The increase in the transition from an on-premise model to a cloud-based service model is the other factor contributing to market growth. Payment providers are increasingly transforming their traditional physical servers and on-premise model to cloud-based deployment to reduce operating costs and provide products at a faster rate. The shift in the cloud deployment model has increased the development of alternate omnichannel solutions and digital wallets.
Amidst the ongoing COVID-19, the cash transactions have drastically reduced. Thus, the pandemic has resulted in increasing mobile payments. As a result, consumers have adopted different digital and contactless payment technologies such as e-wallets for the transactions. Despite the virus outbreak, the consumers tend to buy essential needs such as groceries and medical supplies. Digital wallets play a crucial role for the sellers and the consumers. These wallets store the payees information and eliminate the need to carry physical wallets and cash, hence reducing the outspread and driving the market.
Component Insights: Payment As A Service Market
The platform segment held the largest market share of more than 83.0% in 2019. The platform segment includes merchant financing, regulatory compliance, security and fraud detection, payment applications, and gateways. Executing payments is not a part of the business for retail, e-commerce, banking, healthcare, and other industries. Therefore, integration of payment platforms with online stores has remained an important factor for several industries. The payment service providers thus provide the required payment platforms, security and fraud detection, and payment gateways to these industries. In addition, AI and machine learning-based solutions are provided for fraud prevention and risk management.
The services segment is expected to grow at the highest rate over the forecast period 2021-2027. The segment includes professional services and managed services. Managed services help in enhancing the customer experience, thus allowing the companies to focus on the core business process. They offer skills required to update the API based payment platforms. In addition, other customer requirements are also fulfilled with the help of these services.
Services Insights: Payment As A Service Market
The professional services segment held the largest market share of over 67.0% in 2019. Professional services include consulting, training, maintenance, integration, and deployment. The rising demand for API based services along with transformation of traditional checks to digital payment is anticipated to fuel the growth of the segment from 2020 to 2027.
The managed services segment is expected to witness the highest CAGR of 6.9% from 2021 to 2027. Companies are actively looking to serve through managed services, simultaneously focusing on their core businesses. Such services help in reducing the operational costs as well as the infrastructure complexity, thereby providing a secure infrastructure. Companies providing managed services offer a complete package of solutions to its customers, thus enabling excellent customer experience management.
Industry Vertical Insights: Payment As A Service Market
The retail and ecommerce segment held the largest share of more than 40.0% in 2019. The industry vertical segment analyzed in the study includes retail and e-commerce, travel and hospitality, healthcare, BFSI, and others. The increasing trend of online shopping and rapid adoption of SaaS has led to an increase in the implementation of payment services. Consumers prefer a safe and secure platform to pay for their purchases. In addition, the retailers have adopted new technologies such as Artificial Intelligence (AI) and digital stores to increase the presence and visibility in the market. Payment through e-wallets, credit cards, debit cards, and online banking has reduced transaction time, improved operational efficiency, and reduced operating costs.
The healthcare segment is expected to witness the highest CAGR from 2020 to 2027. The increase in healthcare spending on medicines, and other medical supplies and equipment, is expected to drive the market over the forecast period. The outbreak of the COVID-19 has impacted the majority of population and countries across the globe, thereby driving the payment as a service market.
Regional Insights: Payment As A Service Market
North America held the largest share of more than 29.0% in 2019, owing to the highest adoption of the payment as a service model over traditional models in the region. North America is a hub for the number of small enterprises/startups, medium, and large enterprises. According to the World Payments report 2019, the number of non-cash transactions in the region has remained the highest and grew at a rate of 5.4% from 2013 to 2017. The U.S. has the highest penetration of digital payment instrument, therefore accounting for the majority of share in the region in 2019. Google Pay, Apple Pay, and Paypal are the leading digital payment applications offered by U.S. companies.
Asia Pacific is expected to emerge as the fastest-growing market over the next seven years. The growing retail sector in China, India, and Japan, and the presence of the majority of small and medium scale retail enterprises in the region is anticipated to boost the growth of the market in region. The predominant use of payment apps such as Alipay and WeChat Pay is expected to drive the market over the forecast period. These apps provide quick payments, further reducing the time taken for the transaction. The government of China has destroyed the banknotes to mitigate the spread of the coronavirus specifically in the containment zones. Thus, the consumers have effectively implemented the use of e-wallets, and payment apps for purchasing essentials, household goods, and medical supplies in the region.
Key Companies & Market Share Insights: Payment As A Service Market
Key companies offer various platforms and services and provide guarantees for risk-free operations. The companies are mainly involved in mergers and acquisitions to sustain their position in the market. For instance, in May 2019, Global Payments Inc. merged with TSYS to provide solutions on payment technologies. In January 2019, First Data was acquired by Fiserv Inc. Some of the prominent players in the payment as a service market include:
Key companies Profiled: Payment As A Service Market Report
- Agilysys Inc.
- First American Payments Systems
- Alpha Fintech
- First Data (Fiserv Inc.)
- Pineapple Payments
- TSYS (Global Payments Inc.)
This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2027. For the purpose of this study, Trusted Business Insights has segmented the global payment as a service market report on the basis of component, organization, Industry vertical, and region:
Component Outlook (Revenue, USD Million, 2016 – 2027)
Services Outlook (Revenue, USD Million, 2016 – 2027)
- Professional Services
- Managed Services
Industry Vertical Outlook (Revenue, USD Million, 2016 – 2027)
- Retail & eCommerce
- Travel & Hospitality
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