The Business Research Company’s Digital Payments Global Market Report 2021: COVID-19 Growth And Change To 2030
One of the leading fintech players, Square Inc, announced the acquisition of a key buy-now-pay-later (BNPL) player, Afterpay, in a massive all-stock deal of about $29 billion. The transaction will be complete in early 2020, subject to the fulfilment of certain closing conditions. Afterpay is a key player in the BNPL space that was instrumental in bringing this new payment service to masses. As of June 2021, it has served more than 16 million consumers and nearly 100,000 merchants across the globe. Over the past couple of years, BNPL services have become immensely popular, particularly in the younger generation who wants to move away from credit cards and make interest-free payments in instalments. The increasing demand for BNPL services is one of the several key factors that are driving the growth of the digital payments market, which is expected to see good growth in the next few years according to the latest forecast by The Business Research Company.
As per data on the Global Market Model, the digital payments market size is expected to grow from around $29 billion in 2020 to over $32 billion in 2021, at a compound annual growth rate (CAGR) of 9%. The market is expected to reach $47 billion in 2025 at a CAGR of 10%. North America is the largest region in the global digital payments market, accounting for around 40% of the market in 2020. Asia Pacific is the second largest region accounting for 33% of the global market.
There has been continuous action in the BNPL space of the digital payments industry over the past several months. Another key US player Affirm, co-founded by PayPal cofounder Max Levchin, went public earlier this year in January. In June this year, the Swedish BNPL player Klarna raised about $639 million in its latest round of funding, taking the company’s valuation to $45.6 billion. Will there be further consolidation among industry players to strengthen themselves in this market? This is an important question at this point as other tech giants are looking to venture into this space. Apple is reportedly planning to enter this space in partnership with Goldman Sachs by providing a BNPL service for Apple Pay users.
Features such as quick onboarding and ease of use are expected to drive the global digital payments market. People require flexible, transparent, and friction-free onboarding for their payment options. They are more attracted to processes that are frictionless in nature, and as a result, software innovators such as Square and PayPal are using automation for decreasing the onboarding time to only a few minutes. Digital payments are very easy to use compared to the conventional methods as they only require a bank account or a phone number and a smart phone with an internet facility.
In the broader digital payments market, contactless payments technology is increasing in popularity. Many users are increasingly opting for contactless payments technology such as mobile wallets, contactless cards, and others, as these are more secure and convenient to use. Contactless payment technology uses radio frequency identification (RFID) or near field communication (NFC) for the transmission of amounts among users.
The Digital Payment Global Market Report is one of a series of new reports from The Business Research Company that provides digital payments market overviews, analyzes and forecasts digital payments market size, share, digital payments market players, digital payments market segments and geographies, the market’s leading competitors’ revenues, profiles and market shares.
About The Author
Moïn has over a decade of experience in market research, analysis, and consulting. He has worked with some prominent market intelligence firms in India including Progressive Digital Media, Ovum, and GlobalData. At TBRC, he is involved in reporting insights on technology and media sectors, along with market data and trend analysis, and understanding competition dynamics. His project experience includes a market strategy study for an AI-based marketing software for telecom companies. He has worked for several clients including Amazon, Sony, Flytxt, Fujitsu, and several tech companies. He has a bachelor’s degree in Biotechnology and a postgraduate degree in management from IMI Belgium.
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