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Third Party Payment Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

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  • 100 Pages
  • January 2021
  • Region: Global
  • Mordor Intelligence
  • ID: 4534385
UP TO OFF until Sep 30th 2023
The Third Party Payment market registered a CAGR of 35.1% in the forecast period (2021 - 2026). With the evolution in technology, which has changed the way we interact and do transactions in the digital era, more people and enterprises are using third-party transactions through online payment platforms. For example, PayPal is an online payment portal that acts as a third party in a retail transaction, whereas seller and a buyer can do a transaction and the payment is carried out using the PayPal gateway.
  • There had been a significant push by businesses across industries to accept digital payments, especially for B2B transactions which are of a relatively larger amount. This is primarily due to the convenience and relatively easy that third party involvement has brought into the transactions.
  • A report published by MasterCard in January 2018 states that 63 percent of the businesses in the US now accept non-cash transactions. It further adds that there is at least 34 percent of Small Businesses in the US that are interested in exploring mobile wallet payments.
  • Moreover, with better technology proliferation of digital payments at the Point of Sale is expected to drive Third-party Payment Market growth. The recently published Global Payments Report has projected that the use of Cash at the PoS will come down by at least 14 percent worldwide by 2022.

Key Market Trends

PoS Segment will Drive the Market
  • The PoS segment remains dominated by Cash transactions, and predictions of a Cashless future aren’t expected to be realized any time soon. However, this segment continues to witness radical transformations as there is a dramatic shift from cash to eWallets.
  • According to the Global Payments Report published in November 2018 by Worldpay, cash will be superseded by debit cards as the leading PoS method in 2019. It further adds that Cash will fall to fourth place by 2022 behind debit cards, credit cards, and eWallets.
  • High growth regions like APAC and EMEA that will drive the growth of Third Party Payment Market in the future are projected to witness a double-digit reduction in the use of Cash at PoS, the report further adds.
  • For instance, PoS has a huge opportunity in India. The number of PoS terminals in India stands at 3.4 million in 2018 with the total number of PoS transactions using credit and debit card at 554.45 million. There has been an entry of big players like Reliance which launched its operations in six cities Mumbai, Bangalore, Hyderabad, Chennai, Pune, and Kolkata, on a pilot basis.
  • The other factor that will lead to the growth of this segment is the increasing use of mobile point-of-sale (mPoS) devices. According to a recent blog by Mobile Payments Today, industry experts predict that the number of mobile PoS transactions will triple by 2023. Experts further add that larger merchants are driving growth in the mPoS, expected to cross 27 million devices worldwide by 2020.
  • Further according to the US Payments Forum’s press release of Dec 2018, counterfeit card fraud in 2018 has come down by 80 percent. This has been possible because 99 percent of the top 200 retailers are now chip-enabled, and chip-on-chip transactions make 60 percent of the total transactions in the U.S., highlighting the fact that the industry is capable enough to fight back against any fraud taking place due to the digital transactions at PoS terminals.

Asia-Pacific is Expected to be the Fastest Growing Market
  • Asia leads the payment innovation, particularly in mobile payments. Consumers in Asian markets expect equal measures of seamless ease and security in all facets of their digital lives, more so when it comes to payments and shopping.
  • The other factor that is driving the relatively mature APAC market is the government initiatives to promote digital payments. Hence eCommerce, the proliferation of PoS and Government Initiatives remain the three most important factors that shall drive the Third Party Payment Market in Asia-Pacific.
  • Going forward the eCommerce market is expected to be defined by extraordinary rates of growth with five-year compound annual growth rates for Malaysia, Vietnam and Philipines & Indonesia projected at 21.3%, 20.2% 18.6% respectively, the WorldPay report stated.
  • The contours of regional commerce will be redefined by the proliferation of PoS segment. According to the Global Payments Report, 2018, Taiwan’s Point of Sale is projected to grow at 10%, trailing close behind the expected 11% Point of Sale growth of China.
  • Government initiatives are driving Asia’s non-cash transactions. For example, Australia’s payment modernization will be led by the New Payments Platform launched by the government. Singapore has established payments council, PayNow, a standard QR code, cashless public transport, and unified PoS terminals to drive the growth of e-payments.

Competitive Landscape

The Third Party Payment Market is a highly competitive market. It has some players who have been in the business for quite some time. Subsequently there are many startups coming up to seize the huge opportunity this market offers. Some players have a presence only in a particular geography. The major players include PayPal Holdings Inc, Stripe, Inc., Alipay.com Co., Ltd, and Amazon Payments, Inc., among others. The recent developments in the market are as follows:-
  • January 2019 - Fiserv announced the acquisition of First Data for USD 22 billion. Two of the most important players in the fintech arena, both Fiserv and First Data have clearly stated that the merger will help them offer a range of financial and payment solutions.
  • February 2019 – Alibaba owned Ant Financial announced the acquisition of UK based payments company WorldFirst for USD 700 million, a move that has marked the entry of the e-commerce and online payment giants’ entry into Europe.

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Table of Contents

1.1 Study Deliverables
1.2 Study Assumptions
1.3 Scope of the Study
4.1 Market Overview
4.2 Introduction to Market Dynamics
4.3 Market Drivers
4.3.1 Penetration of Internet Leading to Proliferation of Digital Payments
4.3.2 Cloud Based Systems Leading to Growth of B2B Sales and also Higher Sales in the POS Segment
4.3.3 Growth of E-Commerce Across the High Growth Regions of the World
4.4 Market Restraints
4.4.1 Security and Privacy Concerns will Act as Restraint
4.5 Industry Value Chain Analysis
4.6 Industry Attractiveness - Porter's Five Force Analysis
4.6.1 Threat of New Entrants
4.6.2 Bargaining Power of Buyers/Consumers
4.6.3 Bargaining Power of Suppliers
4.6.4 Threat of Substitute Products
4.6.5 Intensity of Competitive Rivalry
5.1 By Type
5.1.1 Online
5.1.2 Mobile
5.1.3 Point of Sale
5.2 By End-User
5.2.1 BFSI
5.2.2 Retail
5.2.3 E-Commerce
5.2.4 Other End-User
5.3 Geography
5.3.1 North America
5.3.2 Europe
5.3.3 Asia-Pacific
5.3.4 South America
5.3.5 Middle East and Africa
6.1 Company Profiles
6.1.1 PayPal Holdings Inc
6.1.2 Stripe, Inc.
6.1.3 Alipay.com Co.,Ltd
6.1.4 Amazon Payments, Inc.
6.1.5 Authorize.Net (CyberSource Corporation)
6.1.6 WePay, Inc. (JPMorgan Chase & Co.)
6.1.7 2checkout.Com, Inc. (Avangate B.V.)
6.1.8 Adyen NV
6.1.9 First Data Corporation (Fiserv, Inc.)
6.1.10 One 97 Communications Limited

Companies Mentioned

A selection of companies mentioned in this report includes:

  • PayPal Holdings Inc
  • Stripe, Inc.
  • Alipay.com Co.,Ltd
  • Amazon Payments, Inc.
  • Authorize.Net (CyberSource Corporation)
  • WePay, Inc. (JPMorgan Chase & Co.)
  • 2checkout.Com, Inc. (Avangate B.V.)
  • Adyen NV
  • First Data Corporation (Fiserv, Inc.)
  • One 97 Communications Limited