Payment providers | The race to scale and expansion into new markets


Payment providers | The race to scale and expansion into new markets

Trends, opportunities and future outlook

The digital disruptions that started emerging in the payment industry in recent years have been accelerated by the pandemic. Going forward, what changes and opportunities are likely? What global investment activity are we seeing? What does the European payment provider ecosystem look like? And what about M&A and valuation-related challenges?

New phase in the payment industry

For decades, traditional card networks have facilitated electronic funds transfers around the world. But, more recently, we’ve seen digital disruptions emerging. These have been accelerated by the pandemic and could permanently change the digital payments landscape.

Trends in digital payments

  • Customers are migrating away from traditional card-based instruments. They are demanding payment methods and channels – such as wearables, mobile wallets and digital banking – offering a seamless payment journey. On top of that, artificial intelligence, machine learning, automation and the migration to cloud services are spurring competition among alternative cashless and real-time transaction options. These changes will inevitably cannibalize traditional payment methods.
  • While consumers and the competitive market will ultimately determine how technologies such as distributed ledgers and cryptocurrencies are used, central banks and financial institutions are preparing for their adoption and their ability to reduce costs and optimize settlement times. Regulatory bodies are also looking at how to adapt to the changing payment landscape through investments in new infrastructure, modifying central banks’ role and updating payment regulations. These changes are likely to impact both on new and existing market players.
  • The increasing risk of cybercrime and emerging fraud schemes mean transaction data typically used to derive insights for deepening customer relationships is now being leveraged to develop innovative credit models, alongside other fraud-mitigation technologies.

Investment activity

The payments industry is increasingly consolidating in response to rising competition and the race to scale. Our report provides an overview of recent M&A activity, highlighting success stories and also misadventures.

European ecosystem

For a better understanding of the current European payments market, we have used Deepview to visualize the payments ecosystem and to trace the most important and upcoming clusters. You can find the results of this visualization in our report.

Read our report on payment providers and feel free to reach out to our professionals if you have any questions.

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