Virtual Payment Systems Market Overview
Global Virtual Payment Systems Market is forecast to reach $85.2billionby 2025, growing at a CAGR of 16.5%during the forecast period from 2020 to 2025. The Virtual Payment Systems market is driven primarily by the factors such as increasing adoption due to Ecommerce sector as well as efficient cash flow process. Moreover, government initiatives towards promoting cashless transactions in developing countries are also helping in higher demands towards virtual payment systems. Rising technology advancements towards enhancing payment processes along with huge dominance from small businesses are also promoting the market growth of virtual payment systems.
The report: “Virtual Payment Systems Market – Forecast (2020-2025)”, by IndustryARC covers an in-depth analysis of the following segments of the Virtual Payment Systems Market.
By Type: Digital Wallets, Mobile Money, Digital Money from Banks, Blockchain and P2P apps
By End Users: Retail and Ecommerce, Transportation, Healthcare, Education, Hospitality
By Application: Online shopping, Online Banking, Utility bills payment, Tax payments, In store shopping & Others
By Geography: North America, South America, Europe, Asia-Pacific, Middle East and Africa
• Digital wallets are having high dominance in the virtual payment systems market owing to the additional benefits such as bonus cards, special discounts and many more.
• Paytm and PhonePe are some of the key players who have helped APAC region especially in India towards significant market growth of virtual payment systems.
• Rising growth of ecommerce industry along with providing an efficient cash flow process are some of the major driving factors affecting the growth of virtual payment systems market.
Type - Segment Analysis
With rapid technology advancements and rising demands towards contactless payments, digital wallets are facing huge dominance in the market. Digital wallets help in eliminating the need of carrying various bank cards and thus causing hassle free payments of mobile, electricity and many others. Moreover, these digital payment apps act as a time-saving option in case of online shopping as well as traditional shopping by providing faster payment experience. These applications require a one-time verification of account details, thus eliminating regular data updating while payment processing. Usage of such wallets eventually helps users in improving expense tracking standards due to storage of all transactions within the app. Features like providing users with additional benefits such as special offers or bonus are also helping in higher utilisation of digital wallets. Since digital wallets are gaining popularity due to easier and efficient payment process, they are facing high dependency by the users thus causing significant market growth.
Geography - Segment Analysis
Asia Pacific is expected to have a major growth in the global virtual payment systemsmarket during the forecast period from 2020 to 2025. Rising growth of e-commerce sector along with growing adoption of smartphones are acting as major drivers for the market growth of virtual payment systems in this region. Additionally, government initiatives towards promotingcashless payments in developed countries is also helping in higher adoption of virtual payment systems, thus gaining popularity among the consumers.Presence of some majorplayers such as PhonePe and Paytm have been contributing with major shares in the virtual payment systems market in India.
Drivers – Virtual Payment Systems Market
Increasing adoption for e commerce
Rising growth of ecommerce sector has been causing higher adoption of virtual payment systems, thus acting as a major driver for significant market growth. Online shopping has gained much popularity in the market and is facing higher dominance compared to traditional methods. Virtual payment systems help in improving the shopping experience along with providing a faster and efficient user experience. Moreover, certain shopping websites offer additional benefits such as bonus cards, discounts, free delivery and many others on using virtual payment systems. This eventually attracts the consumers towards virtual payment systems, which causes higher adoption by the consumers in the market. Virtual payment systems serve as a convenient method during online shopping payments by providing data privacy. With higher productivity of e-commerce sales, virtual payment systems have been facing significant market growth by the customers.
Increases cash flow efficiency
Higher efficiency of cash flow process is one of the major driving factorstowards higher adoption of virtual payment systems in the market.While making transactions through cheques, demand drafts and many others, certain additional administrative costs such assuch as cashing, tracking as well as payment filling makes them highly expensive. Adoption of virtual payment systems helps in reducing these associated costs along with saving time, thus increasing customer savings. Moreover, virtual payment systems helps in easy cash transfer of large amounts compared to traditional systems, thus offering higher efficiency. Virtual payment systems offer more reliability and flexibility which causes its major dominance in the market. With the help of virtual payment systems, cash flow process is improved, thus eliminating the need to carry massive amounts of cash or cheques. Higher efficiency of cash flow process has been causing a substantial market growth of virtual payment systems.
Challenges – Virtual Payment Systems Market
Rising rate of cyber crimes globally has been adversely affecting the market growth of virtual payment systems. Since the personal or account details are linked within the app interface, there are high chances of data hacking by cybercriminals. Moreover, cyber hacking leads to serious threats such as frauds, high amount fund transfers along with misuse or exploitation of user’s personal details. Though transactions made through virtual payment systems are secured with passwords, issues like loss of smartphones can also eventually make it an unsafe payment method. Data privacy is one of the major factors while making online transactions to improve customer satisfaction as well as reliability. High concerns regarding safety and security of virtual payment systems have been causing lesser adoption, thus restraining its market growth.
Partnerships and acquisitions along with product launches are the key strategies of the players in the Virtual Payment Systems Market. The major key players in the Virtual Payment Systems Market include Paytm, Samsung, Google, PhonePe, PayPal Holdings, Inc., ACI Worldwide Inc., PayU, Paysafe Group LimitedApple Inc. and MobiKwik.
- In January 2020, SBI launched a one use virtual card in order to control net banking frauds for its net baking users. This virtual card is capable of making online payments without revealing the real details to the merchant about debit and credit cards. As said by SBI, this card functions as a limit debit card and can be generated using its internet banking platform. This is a single usage card valid for 48 hours or till transaction gets completed with no reuse option available.
- In February 2020, Airtel Payments Bank launched Aadhaar enabled payment system (AePS) in order to help people to do transactions over 2,50,000 in banking points across India. This system was introduced to help the customers having linked bank accounts with aadhaar to carry out transactions and access bank accounts with their aadhaar number or virtual ID. The bank enabled model AePS offers online financial transactions using aadhaar authentication and thus provides a secured banking experience.