What’s Driving Growth in the Merchant Acquiring Market? Insights into Key Trends and Opportunities
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What is the Anticipated CAGR of the Merchant Acquiring Market, and What Factors Will Drive It?
In the past few years, the merchant acquiring market has experienced significant growth. The market size, which is predicted to be $25.43 billion in 2024, is expected to expand to $28.2 billion in 2025, with a compound annual growth rate (CAGR) of 10.9%. Factors contributing to the growth during the historic period include increasing needs for cross-border e-commerce, the expansion of peer-to-peer (p2p) payment systems, the rise of digital banking and fintech innovations, e-commerce growth, and an increased demand for alternatives to cash.
In the coming years, the merchant acquiring market is projected to experience fast-paced expansion, elevating to $42.16 billion by 2029 at a 10.6% compound annual growth rate (CAGR). The anticipated growth for this period is primarily due to the widespread use of smartphones for mobile payments, the increasing preference for contactless payments, a burgeoning demand for digital payment solutions, and the growing necessity for secure, fraud-proof payment methods. Additionally, capital infusion in payment technology is another significant driver. For the forecast period, key trend forecasts include technological progress, AI incorporation, subscription-based models, the rise of digital currencies, and the prevalence of contactless wearable tech.
What Drivers Are Shaping the Growth of the Merchant Acquiring Market?
The surge in the necessity for digital transactions is projected to boost the expansion of merchant acquisition in the future. Digital transactions are the online exchange of funds between two entities, eliminating the requirement for physical cash or cheques. Various elements contribute to this growing necessity for digital transactions, including the expansion of e-commerce, the emergence of contactless payment techniques, and the universal access to the internet. Digital transactions in merchant acquisition simplify processes, minimize cash management, and improve payment safety, resulting in improved business efficiency. For example, the Consumer Financial Protection Bureau, a US government agency, reported that in September 2023, American consumers spent $65.2 billion at retail outlets in 2022 using Google Pay (a mobile transaction service devised by Google to enable in-app, online, and face-to-face contactless purchases via mobile gadgets), a significant increase from $24.8 billion in 2021. Hence, the rising necessity for digital transactions is fuelling the expansion of the merchant acquisition sector.
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Who Are the Top Companies Contributing to the Growth of the Merchant Acquiring Market?
Major companies operating in the merchant acquiring market are Commercial and Industrial Bank of China, JPMorgan Chase & Co., Bank of America Merchant Services, Citi Merchant Services, American Express Company, ING Group N.V., Banco Bilbao Vizcaya Argentaria S.A., Fiserv Inc., Fidelity National Information Services Inc., Global Payments Inc., Sberbank, The Royal Bank of Scotland plc, Shift4 Payments Inc., Worldpay Group plc, Heartland Payment Systems Inc., Adyen N.V., Paysafe Group, Elavon Inc., Crédit Agricole S.A., Zettle by PayPal, Chase Paymentech Solutions LLC, PayCommerce Inc.
How Are Technological Trends Affecting the Growth and Development of the Merchant Acquiring Market?
Leading firms in the merchant acquiring sector are centering their efforts on the establishment of strategic partnerships to secure a stronger market position. These partnerships often comprise collaborations among financial institutions, payment processing firms, and technology providers to improve payment solutions and broaden market influence. For example, in July 2024, US-based payment processing firm, Shift4 Payments, Inc. teamed up with Bulgaria-based software firm, Phos, to strengthen Phos’ acquiring abilities and accelerate the uptake of its SoftPOS solution by European merchant customers. This collaboration brings about the opportunity for Phos customers to take advantage of Shift4’s global acquiring and payment processing services, enabling them to process payments via global card networks and digital wallets.
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Which Key Market Segments Comprise the Merchant Acquiring Market and Drive Its Revenue Growth?
The merchant acquiringmarket covered in this report is segmented –
1) By Type: Digital Commerce, Traditional Commerce
2) By Payment Method: Visa, Mastercard, American Express, Discover, Japan Credit Bureau, Local Card Networks, Alternative Payment Models
3) By Sales Channel: Direct Channel, Distribution Channel
4) By Application: Small And Medium Enterprises, Large Enterprises, Other Applications
Subsegments:
1) By Digital Commerce: E-commerce Payment Gateways, Mobile Payment Solutions, Online Point-of-Sale (POS) Systems, Digital Wallet and NFC Payments, Subscription-Based Payment Solutions, Peer-to-Peer (P2P) Payment Platforms
2) By Traditional Commerce: In-Store POS Systems, Card-Not-Present (CNP) Transactions, Retail Payment Solutions, Contactless Payment Solutions, Terminal-Based Payment Systems, Multi-Channel Payment Processing
What Are the Key Regions Powering Growth in the Merchant Acquiring Market?
North America was the largest region in the merchant acquiring market in 2024. The regions covered in the merchant acquiring market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.
What Are the Defining Features of the Merchant Acquiring Market?
Merchant acquiring refers to the process through which financial institutions, known as acquiring banks or acquirers, provide services to merchants for accepting card payments. This involves setting up the necessary infrastructure for processing credit and debit card transactions, including point-of-sale (POS) systems and payment gateways. Acquirers also handle transaction processing, settlement, and risk management, ensuring that merchants receive funds from card transactions efficiently and securely.
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