Payment Facilitators Expected to See $15 Billion in Transaction Revenue by 2025: Industry Forecast

Over the next five years, payment facilitators are expected to process more than $4 trillion in global gross payment volume, representing a 28.4% compound annual growth rate. During that same time period, PFs could collectively generate up to $15 billion in transaction revenue.

This is according to a forecast recently released by PaymentFacilitator partner Infinicept, which analyzed the growth of the payment facilitator market.

(Note: You can access the executive report cited in the above news article at: Payment Facilitator Global Opportunity Analysis and Industry Forecast, 2018-2025)

An expected influx of new payment facilitators will contribute to this growth rate, the report said. There were 1,075 payment facilitators operating across the world in 2019. Estimates conducted for the report by AZ Payments Group predict that number has the potential to grow to more than 4,200 by 2025.

“This growth is being driven by investments from payment networks, PFaaS solutions which reduce market barriers, and the proven benefits early adopters have achieved,” Todd Ablowitz, co-founder and co-CEO of Infinicept, said in a press release.

The report further details the benefits and the ways they have contributed to PF market growth.

The seamless onboarding offered by payment facilitators has made accepting electronic payments simpler for many merchants, particularly small and micro-merchants. This simplified process has resulted in a competitive advantage for many payment facilitators. Their merchants can be up and taking payments within minutes of applying, rather than having to seek out a separate payments provider, apply, and wait days or even weeks to begin accepting payments.

The payment facilitator model also gives companies the ability to tailor payments products to uniquely fit the needs of their customers. Many software providers focused on specific verticals – Toast in the restaurant industry or Phreesia in healthcare, for example – are choosing to become PFs, the report said. They know the unique requirements of businesses operating in those verticals, and they can offer payments products that help them operate more effectively.

Finally, operating as a payment facilitator increases software companies’ revenue. Companies that own their customers’ payments process also own the payments revenue, which is expected to increase significantly in the next few years. According to the report, transaction volume for these companies is expected to grow at a 28.5% CAGR between now and 2025.

These benefits extend beyond the payment facilitators themselves. The card networks benefit from increased usage of digital payments, which in turn increases their own revenue.

And governments benefit from this shift to digital payments, because it aids them in collecting tax revenue, the report said. Many economies still heavily depend on cash transactions, which are difficult to track. This has led some governments to actively support the growth of the payment facilitator model to help make it easier for merchants who were previously cash-only to accept digital payments.

Click here to view the report.