Digital payments have had a huge impact on the traditionally cash-dominated global payments industry, credit card, debit cards and prepaid cards. The rise of smart devices and a growing e-commerce market have led to the rapid adoption of digital payments, in developed and emerging countries alike.
According to data collected by LearnBonds.com, the global digital payments market will reach a record transaction value of $ 4.7 billion this year, with a growth rate of 15.3% year-over-year. This upward trend is expected to continue in the following years, with the overall market reaching $ 6.7 billion by 2023.
China is the world’s largest digital payments market
The global digital payments market is growing at an average annual rate of nearly 14% from 2017 to 2023, Statista’s fintech industry survey revealed. Digital commerce represents the most important segment of the market, which is expected to generate up to 67% of transactions over the next three years.
However, payments at mobile points of sale are expected to experience the largest increase in the future, from $ 745 billion in transaction value in 2019 to $ 2.1 billion by 2023. Average transaction value per user in this segment will also drop from just over $ 791 in 2020 to $ 1,289 in 2023.
Geographically, China is expected to remain the world’s largest digital payments market, with 49% of the global market share by 2023. Just two decades ago, China was primarily a cash economy. . However, e-commerce giant Alibaba and gaming group Tencent have exploited widespread smartphone ownership in the country and have helped drive Chinese consumers overwhelmingly towards digital payments. Today, Chinese companies receive digital payments and use them as an entry point to offer consumers a range of offline and online products and services.
The Statista report shows that together, China and the United States will account for nearly 70% of the value of global digital payment transactions by 2023. While PayPal, Venmo, and Square dominate the U.S. alternative payments market, Tech giants like Google, Apple and Facebook, as well as big banks like JP Morgan, Chase and Wells Fargo, are also entering this market. The aim of this massive change is to increase the speed of money transfers for consumers, reduce transaction costs and integrate payment services into social networks.
Far behind the top two countries, the UK is the third largest digital payments market in the world, with a transaction value of $ 176 billion in 2020. Japan and Germany follow with 173.1 billion, respectively. and $ 127.4 billion. Statistics indicate that the ranking of the leading regions will remain the same over the next three years.
The rise of P2P mobile payments
The global peer-to-peer digital payments market is also booming, with consumers sending billions of dollars through digital apps. Statista figures confirm that the United States has the largest peer-to-peer payments market in the world, with Venmo, Zelle and Square as dominant players.
United States equals The payments industry is competitive, with financial institutions and fintech start-ups offering innovative services and creating sophisticated networks that provide real-time payments. Statistics indicate that the unified market will grow at a compound annual growth rate of over 20% and reach a value of $ 381 billion by 2022.
As one of the fastest growing markets for FinTech companies in the world, the UK is also currently experiencing an increase in equals-bound growth. The entire UK peer-to-peer payments industry is expected to reach $ 70 billion by 2022, with a compound annual growth rate of 23%. The stimuli for this growth have been fueled by the popularity of competing banks such as Monzo and Revolution.
However, the Indian market is the fastest growing in the world, with an average annual growth rate of over 72%, rising from $ 10.5 billion in 2017 to $ 159.2 billion in 2022. Radical government efforts, especially the November 2016 demonetization efforts and the launch of the government in the same year, the real-time instant payment system owned by Unified Payments Interface (UPI) are the main drivers of this incredible growth. UPI transactions have already reached more than half of the value of card transactions in the country.
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