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The global payment security market size was valued at USD 19.82 billion in 2021 and is projected to grow from USD 22.69 billion in 2022 to USD 63.96 billion by 2029, exhibiting a CAGR of 16.0% during the forecast period. North America dominated the global market with a share of 36.98% in 2021.
The global COVID-19 pandemic has been unprecedented and staggering, with payment security experiencing higher-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a moderate growth of 13.5% in 2020 as compared to 2019.
In the scope, we have considered payment security solutions provided by key players such as Paypal Holdings, Inc., Thales, Cybersource, PayU, and Tokenex, among others.
Payment security involves the process businesses adopt to visualize and gain insights based on correlation, hidden patterns, the market’s changing trends, and more. For instance, in May 2022, Transaction Network Services (TNS) unveiled its recent Point of Sale (POS) terminals at PACE in Adelaide, Australia, part of the TNS accepted product collection for the parking industry. These POS devices provide a secure payment experience for consumers who want to pay by card, digital or contactless wallet in various areas such as retail stores, parking lots, electric vehicle charging, and vending machines.
Increased Adoption of Digital Payments amid the COVID-19 Pandemic Strengthened Market Growth
The COVID-19 pandemic surged frauds, cyberattacks, ransomware attacks, and money laundering, among others. Since COVID-19 hit the world in 2020, there has been an exponential increase in digital payment fraud, owing to the increasing adoption of this technology.
Individuals and corporates are adopting electronic payment and other online digital platforms owing to lockdown restrictions. Online digital payment modes, such as mobile payment, online transactions, digital apps, mobile/digital money wallets, and others, are widely adopted by individuals, government sectors, and corporates. During the period of lockdown, usage of e-wallets increased by 40%. With the increased use of digital transactions, cybercrime attacks also increased by 86%.
With increase in online digital payment platforms, new opportunities are emerging for fraudsters to execute cyber-attacks. This will increase the demand for payment security for online digital payments. Owing to this, an unexpected spike is observed in these solutions in developing nations. This will likely raise the mobile payment transaction and boost the adoption of these solutions globally.
A survey of fraud auditors around the world in August 2020 found that the risk of various types of fraud has increased since the start of the coronavirus pandemic. In May 2020, 24% of respondents reported a significant increase in their risk of payment fraud. Additionally, 47% of respondents expect the risk of payment fraud to increase significantly over the next 12 months.
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Increasing Awareness of Contactless Payments to Aid Payment Security Market Growth
Technology is transforming and touching every aspect of our lives and has compressed how we shop and pay. There has been a significant shift to e-commerce and a rise in digital payments. Further, the number of users adopting contactless payments has increased in the last five years to meet growing consumer demand. From 1.2 million in 2015 to now, there have been over 8 million users. Thus, innovative payment platforms are driving the digital payments revolution further.
Despite the prolonged closure of many stores throughout various lockdowns to inhibit the extent of COVID-19, the significance of contactless payments increased by 7% in 2020 as compared to 2019. For instance,
Thus, the above factors in contactless payments are considered trending factors in the market.
Increasing Frequency of Data Breaches and Advanced Technology in Payment Security to Drive Market Growth
One of the main factors driving the growth of the security industry is the growing frequency of data breaches. As the number of data breaches increases, money is also lost. Thus, as data breaches increase, the demand for solutions increases. For instance,
Additionally, the adoption of advanced technologies, such as 5G, Big Data, and the cloud, by key market players is expected to drive the global market. These major players are partnering with other market players to add advanced technologies to their security solutions portfolio. For instance,
Security Concerns and Lack of Skilled Professionals to Impede Market Growth
Security concerns include phishing scams, hacking tools, unauthorized access, and exposed mobile wallets, which can risk users' data and information. It is also challenging to determine the kind and level of user data protection.
Companies still face data security concerns and lack of skilled professionals, restraining market growth. For instance,
Fraud and Prevention Segment to Dominate Owing to Rising Concerns Regarding Payment Fraud
Based on solution, the payment security market is segmented into tokenization, encryption, and fraud and prevention.
Among these solutions, the fraud and prevention segment dominated the global market in 2021. The fraud and prevention segment is estimated to witness high growth during the forecast period. Payment fraud has also increased in recent years as sales via digital channels have reached new heights.
Therefore, increasing payment fraud surges the demand for fraud and prevention solutions.
Large Enterprise to Lead Owing to the Deployment of Advanced Solutions for Security Business Extension
Based on organization size, the payment security market is bifurcated into SME and large enterprise.
Among these, the large enterprise segment held a major market share in 2021 and the SME segment is predicted to be the fastest growing segment in the coming years.
Due to increased payment fraud among SMEs, the demand for this security is growing among SMEs. Security solutions are gaining traction among SMEs as around 95% of credit card breaches come from SMEs.
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Retail Sector to Dominate Attributable to Increased Online Payment Application Usage
Based on industry, the payment security market is divided into IT & telecom, healthcare, BFSI, retail, travel & hospitality, and others (media & entertainment and others).
Among these, the retail segment dominated the market in 2021 and is estimated to grow with the highest CAGR during the forecast period.
The adoption of mobile payments in retail, especially in the e-commerce sector, is increasing due to government support, smartphone penetration, and online application usage. The promise of a better shopping experience will likely increase the demand for security solutions.
North America Payment Security Market Size, 2021 (USD Billion)
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Geographically, the market is studied across North America, Europe, Asia Pacific, South America, and the Middle East & Africa.
North America dominated with the highest global payment security market share in 2021. As real-time payments in North America are increasing rapidly, with significant year-over-year growth, there has been an increase in the number of payment frauds, and thus the demand for security solutions is increasing.
In North America, the penetration of digital payments reached 78% in 2020 as more than half of consumers shifted from in-store shopping to online shopping due to the pandemic. This has led to an increase in digital payment transactions, which has increased the risk of payment fraud.
Additionally, in North America, leading players in the mobile payment industry, including Samsung, Apple, Inc. and others are focusing on introducing advanced technology-enabled mobile payment services built on these security solutions.
The Asia Pacific region is anticipated to grow with a remarkable CAGR during the forecast period. The rising adoption of online digital payment among consumers in Asia Pacific aids market growth. For instance, around 60% of the APAC population is shifting to online digital payment options. Digital payments are increasing at over 30% per year, according to Kaspersky’s Digital Payments report. Further, the rapid proliferation and adoption of digital payments across several industries, such as retail, hospitality, and others, are surging the demand for payment security. According to Kaspersky’s Digital Payments Report in 2021, more than 46.0%, which is 1.8 billion people of the Asia Pacific region’s online population use an e-wallet regularly. This region uses several online platforms such as Kakao, Paytm, Grab, Line, Gojek, Apple Pay, Stocard, and Samsung Pay.
Further, several leading European players are expanding and developing security solutions to remain competitive. The increased use of contactless payments is also driving the European market. For instance, according to Elavon's survey, around 48% of people in the U.K. said they have started using contactless payment methods or are using them more frequently due to the pandemic. For example, Aldi, a significant supermarket chain in the region, is testing an app that allows shoppers to pay with automated checkout. The overall use of digital payments in Europe is estimated to grow by 70% between 2020 and 2025.
The payment security market growth in the Middle East and South America is due to the increasing demand for advanced security solutions systems to detect and identify cyber-attacks during online payments and transactions. The adoption of mobile payment services, including online payment, mobile banking, mobile wallet transactions, USSD/STK, and SMS has significantly boosted the possibility of occurrences of cyber fraud frequently. To deal with the rising fraud incidents, key market players in the industry are focusing on developing mobile banking applications based on advanced payment security solutions.
Strategic Acquisition to Boost the Market Expansion of Key Players
Leading companies offer payment security solutions across all businesses. Key market players are creating new solutions, updating tools and technologies, and expanding their scope to enhance their technological capabilities. Key players focus on increasing their market share and customer reach through strategic acquisitions. For instance,
August 2022: Bluefin partnered with Etix for Payment Processing and PCI-Validated Point-to-Point Encryption. Etix is a global ticketing service provider for the sports, entertainment, and travel industries and has a presence in 40 countries.
An Infographic Representation of Payment Security market
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The research report includes prominent areas across the globe to get a better knowledge of the industry. Furthermore, it provides insights into the most recent industry and market trends as well as payment security market analysis of technologies adopted quickly on a global scale. It also emphasizes some of the growth-stimulating restrictions and elements, allowing the reader to obtain a thorough understanding of the industry.
By Solution, Enterprise Type, Industry, and Region
By Enterprise Type
The market is projected to reach USD 63.96 billion by 2029.
In 2021, the market stood at USD 19.82 billion.
The market is projected to grow at a CAGR of 16.0% over the forecast period (2022-2029).
Fraud and prevention solution segment is likely to lead the market.
Paypal Holdings, Inc., Thales, Bluefin Payment Systems LLC, and PayU are the market's top players.
North America is expected to hold the highest market share.
Asia Pacific is expected to grow with the highest CAGR.
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