The Payment Security Market is expected to reach $54.1 billion by 2028, at a CAGR of 16.5% during the forecast period of 2021–2028. The growth of this market is attributed to the increasing adoption of digital payment modes, the rising need to adhere to PCI DSS guidelines, and increasing cyber-attacks on digital payments.
In addition, the rising demand for advanced payment security solutions for digital e-commerce and the increasing use of payment applications across different industry verticals offer significant growth opportunities for the growth of the digital payment market. However, the lack of trust in online banking restrains the growth of this market to a certain extent.
Impact of COVID-19 on Payment Security Market
The outbreak of the COVID-19 pandemic has resulted in increased usage of digital payment modes, leading to a significant increase in the growth of the payment security market. A report issued by the ACI in April 2020 shows that real-time payments are expected to witness exponential growth due to the COVID-19 pandemic, with more than half a trillion transactions and a compound annual growth rate of almost 23% between 2019 and 2024.
Digital payment firms such as PhonePe, Paytm, and Amazon Pay have seen a nearly 50% spike in transactions through their digital wallets since the outbreak of the COVID-19 pandemic. The sudden increase in digital adoption has dramatically advanced the digital transformation agendas for numerous banks, with banking leaders recognizing online banking services as a critical means for increasing customer retention and growing revenue streams through personalized services. The impact of the pandemic has accelerated the adoption of a broad range of digital banking offerings and shifted consumers of all ages away from traditional banking branches and ATMs at an unprecedented pace.
The COVID-19 pandemic has accelerated consumer interest in adopting digital banking and payments interactions. For example, Americans set a record with 1.2 billion transactions on the instant payment network Zelle in 2020, a 62% increase from the previous year. Meanwhile, according to MasterCard’s Global State of Pay report released in October 2020, more than 53% of consumers who had access to a smartphone and a bank account stated that there had been an increase in the utilization of banking apps compared to the pre-COVID-19 pandemic scenario.
The increased usage of digital transactions has resulted in an increase in cyber-attacks. In recent years, there had been a gradual increase in payment fraud activities at organizations as nearly 75% of organizations were targets of a payment fraud attack in 2020 (Source: JP Morgan). Thus, increasing payment-related frauds are expected to propel the growth of the payment security market in the coming years.
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Rise in Fraudulent Activities in E-commerce Offers Significant Growth Opportunities for the Payment Security Market
The retail e-commerce revenue worldwide has been consistently growing even before the outbreak of the COVID-19 pandemic. The pandemic just pushed the adoption of e-commerce software at a faster rate. However, e-commerce payment fraud continues to be a pressing challenge worldwide. Merchants saw payment fraud rise in 2020, compounding unprecedented logistical, safety, and regulatory challenges due to the pandemic. As commerce shifted from physical stores to online and away from cash and physical cards, fraudsters stepped in to take advantage of new routines and distracted consumers.
Online businesses are quickly becoming easy targets for cybercriminals as fraudulent activities in e-commerce continue to rise. Merchants need to implement fraud prevention strategies across all e-commerce channels to prevent losses. Merchants are looking to gain more control over their revenue, and they’re finding solutions in the form of dynamic end-to-end payment protection. According to Cybersource, an E-commerce credit card payment system management company, the overall global spending on fraud management solutions for retail and e-commerce businesses is projected to reach €9 billion by 2023.
Ecommerce continues to grow and evolve, and so does e-commerce fraud. It is now important than ever to adopt modern fraud management systems to identify and safeguard against rapidly shifting fraud strategies. Thus, rising fraudulent activities in e-commerce are expected to provide significant opportunities for the growth of the payment security market.
Key Findings in the Global Payment Security Market Study:
Payment Security Solution to Witness the Largest Share Through 2028
Based on offering, the solution segment commanded the largest share of the overall payment security market in 2021. The rising demand for advanced payment security solutions for digital e-commerce, increasing use of payment applications across different industry verticals, and the increasing need to secure online business-sensitive transactions from advanced cyber-attacks are expected to drive market growth.
Digital Wallet Segment Dominated the Payment Security Market
Based on payment mode, the digital wallet segment commanded the largest share of the overall payment security market in 2021. The emergence of payment-enabled mobile phones, connected and real-time marketing, the social media effect, and the increasing shift to QR code-based transactions are major factors impacting the market growth.
Asia-Pacific: The Fastest Regional Market
Based on geography, the Asia-Pacific payment security market is expected to grow at the highest CAGR during the forecast period. The growth in this region is primarily driven by the increasing adoption of advanced payment technologies within organizations for performing business transactions. Consumers in the region are increasingly opting for digital payments over cash.
The desire to minimize contact during the COVID-19 outbreak has pushed 91% of consumers in Asia-Pacific to pay with cards or mobile apps instead of cash, and 75% of these users plan to retain their digital payment habits even after the pandemic is over, according to a Visa study.
However, there has been an increase in fraudulent activities in the region due to the adoption of real-time payments methods, and financial institutions across the region expect these threats to increase in the coming years. In addition, changing retail landscape and evolving e-commerce industry are expected to drive the growth of this market.
Key Players
The report includes a competitive landscape based on an extensive assessment of the key strategic developments adopted by the leading market participants in the payment security market over the last three years.
The key players profiled in the global payment security market are Bluefin Payment Systems LLC (U.S.), Braintree (U.S.), Cybersource (U.S.), Elavon (U.S.), Ingenico (France), Broadcom, Inc. (U.S.), Thales Group (France), Shift4 Payments, LLC (U.S.), Signifyd (U.S.), TNS, Inc. (U.S.), Tokenex (U.S.), SISA Information Security Pvt. Ltd. (India), Stripe (U.S.), Geobridge Corporation (U.S.), MasterCard (U.S.), and Verifone Systems Inc. (U.S.).
Scope of the report:
Payment Security Market, by Offering
- Solution
- Encryption
- Tokenization
- Fraud Detection and Prevention
- Services
- Integration Services
- Support Services
- Consulting Services
Payment Security Market, by Platform
- Web Platform
- PoS Platform
Payment Security Market, by Transportation Mode
- Banking Cards
- Digital Wallets
- Internet Banking
- Point of Sales
- Others
Payment Security Market, by Industry Vertical
- Retail
- Travel and Hospitality
- Healthcare
- IT and Telecom
- BFSI
- Media and Entertainment
- Others
Payment Security Market, by Organization Size
- Large Enterprises
- Small and Medium-Sized Enterprises
Payment Security Market, by Geography
- North America
- Europe
- U.K.
- Germany
- France
- Italy
- Sweden
- Denmark
- Rest of Europe
- Asia-Pacific
- China
- India
- Japan
- Singapore
- Malaysia
- Indonesia
- Rest of Asia-Pacific
- Latin America
- Brazil
- Mexico
- Rest of Latin America
- The Middle East and Africa
Key questions answered in the report :