New data from technology analyst firm Juniper Research suggests that revenue from payment platforms that enable merchants to transact digitally will grow by nearly 50 percent over the next five years, from $106 billion in 2019 to $158 billion in 2024.
The report forecasts that over half of global payment platform revenue will be generated in China by the end of the forecast period. This is partly due to the growing Chinese economy, but also to the vast adoption rate of social apps, such as WeChat, which allow citizens to pay for goods and services and rate their experiences. Visitors to China are encouraged to download the app.
A new Juniper Research report, Mobile & Online Remote Payments for Digital & Physical Goods: Opportunities, Pain Points & Competition 2019-2024, also presents some downsides for the market. For example, it forecasts that losses from payment fraud will grow by 70 percent over the next five years, making it essential for FinTech firms to put security, anti-money-laundering, and fraud protection at the heart of their offerings.
The also report recommends that providers should diversify their solutions to keep pace with changing consumer demands and growing acceptance of financial applications. In the retail space, FinTech providers should offer merchant services such as store management solutions, customer insights, and capital finance to remain competitive.
The report’s author Dr Morgane Kimmich said, “The market will move beyond solely offering payments in the near future by expanding to new services. These value-added services will enable payment platforms to differentiate themselves in a saturated market and build out new business models to allow vendors to generate additional revenue.”
The research assessed 16 payment gateway platforms, scoring them on their services, portfolio, and future market prospects. In descending order, Juniper Research positioned Fiserv, PayPal, FIS, CyberSource, and Adyen as the top five providers in the space.
Fiserv was commended for its acquisition of First Data, which allowed it to create an end-to-end solution, and for it wide range of capabilities, such as the Clover POS system. Both Fiserv and FIS have significantly increased their customer reach and portfolios through mega-mergers in recent months.
- In February 2019, analyst firm CBInsights forecast the emergence of 50 new technology unicorns (companies valued at over $1 billion). Several were in the FinTech space, including: payment platforms Airwallex (Australia), Flywire (US), and Razorpay (US); and accounting and finance platforms Blend (US), C2FO (US), Cleartax (India), Earnin (US), and Upgrade (US).
Retail-related platforms Faire (US), Glossier (US), and Marqueta (US), and retail systems provider Standard Cognition (US) also made the list, in which the UK had just one entry, location-based service Citymapper. Two-thirds of future unicorns are US-based, according to CBInsights, with India (10 percent) and China (eight percent) in second and third place.