Payment gateways like Visa, Mastercard, and American Express are household names today. These gateways are interfaces that can securely facilitate the payment process, prevent fraud, provide alternative payment options, and outsource electronic payments. According to procurement analysts at Technavio, with the increase in retail e-commerce sales, the demand for online payments across the globe has also grown substantially. Increased online payments have in turn boosted the demand for network payment services as well.
Important drivers of the network payment market
As the Internet of Things (IoT) is largely adopted by business across various verticals, suppliers of network payment services are working on innovative ways through which they can widen their customer base. Some of the chief drivers of the network payment market, as identified by procurement managers are:
- Adoption of digital payment
With the increase in digitization, the adoption of digital modes of payment too has grown substantially. Increased adoption of digital payment, is not only the case in developed economies like the US and the UK alone. Countries such as India and China have also taken to digital payments in a major way. The tech-savvy generation in these countries prefers digital payments, which is contributing to the growth of the overall market.
- Need for immediate payments
With the emergence of smartphones and other connected devices, the demand for fast payments has increased immensely. In fact, this trend has prompted governments to establish real-time transactions by creating an immediate national and regional payment system. As network payment services offer the flexibility of making real-time transactions through smartphones, it facilitates instant payment services.
- Increased number of FinTech Firms
Technological innovations in the banking and finance sector have encouraged the growth of FinTech companies. Thus along with banks, which are the primary providers of secure payment services, FinTech companies provide a secure and convenient mode of payment. 2015 alone witnessed FinTech startups raising funding of around US $12.2 billion. This development has, in turn, contributed to the increased use of network payment services.
- Technological innovations
The need for financial inclusion to reduce the unbanked population has led to a rapid expansion in technologies and innovations. Technological growth has helped people to avail services of e-banking and mobile money. With technological innovations, the network payment service market has grown substantially.
- Integrated payment solutions
Adoption of integrated payment solutions is another important driver of the global network payment services market. As payment solutions get integrated, the role of payment gateways has increased significantly. Most of the suppliers of payment gateways have adopted the latest technology to make their system foolproof, making it easier for buyers to accept their platform.
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