The digital payment industry is set to grow to be worth $154.1bn by 2025, according to new research.
Given the market is expected to be worth $79.3bn in 2020, that represents a compound annual growth rate of 14.2% over the next five years, according to MarketsAndMarkets.
The growth is driven by two things: the transforming retail space and the ever-increasing popularity of e-commerce.
“Retailers are modernising their brick-and-mortar stores to provide improved services to their customers and establishing online stores to increase revenue,” the researchers said. “They are also adopting innovative technologies, such as cloud computing, big data analytics, digital stores, and social networks, to increase their visibility and presence in the market.
“They are realising the benefits of digital payments, which include reduced transaction time, increased revenue, improved operational efficiency, and minimised operating costs. Mobile payments at retail stores have helped accelerate the transaction process and reduce counter queues.
“Mobile contactless payments are also assisting retailers in establishing strong customer relationships and enhancing customer loyalty. Similar to financial institutions, retailers can also offer effective purchase-related services as well as loyalty services, such as paperless receipts.”
Looking at the different regions, the North American market is expected to keep accounting for the biggest market share in the world.
This is due to the ubiquity of the solutions and innovators in the market as well as its history of being reliant on a well-established payment infrastructure, according to the researchers.