According to a new report published by Allied Market Research, titled, “B2C Payment Market," The b2c payment market size was valued at $1.5 trillion in 2022, and is estimated to reach $4736.2 billion by 2032, growing at a CAGR of 12.3% from 2023 to 2032.
The B2C payment market refers to all products, services, and infrastructure that enable transactions of monetary value between businesses and individual consumers. It encompasses the ecosystem of payment instruments, networks, processors, and other intermediaries that facilitate retail customer purchases, bill payments, peer-to-peer transfers, and other flows of funds from consumers to businesses.
Credit and debit cards remain the most ubiquitous payment instrument globally given the vast acceptance network driven by Visa, Mastercard, Amex and other schemes. However, B2C payment market growth is expected to moderate on two fronts user fatigue from complex reward schemes and added costs for merchants, along with technological innovation in alternate digital payment platforms. Contactless tap-and-go card payment adoption on the other hand promises sustained upside focused on transit and retail P2P use-cases.
Furthermore, integration with digital tokenization to store card details directly on cloud under bank or merchant custody would allow card credentials portability to additional devices such as smartphones, wearables fostering incremental transactions by consumers. The emergence of virtual one-time use card numbers for online purchases also aims to tackle e-commerce frauds and bolster confidence. Overall, technology improving the main payment systems points to good growth of payment amounts and number of purchases which in turn propel the B2C payment market growth.
Also, more penetration of automated teller machines (ATMs) and point-of-sale (POS) terminals are being put in developing countries. This is making it easier for people there to use cards to pay. This is supported by government policies and investments by players such as Visa and Mastercard. The rise in e-commerce is driving more online card transactions for both one-time and recurring payments as consumers perceive cards as more secure for online purchases which is expected to support the of B2C payment market growth .
In addition, the banking and financial services industry is seeing massive growth in B2C digital payments driven by efforts to improve financial inclusion, tap underbanked consumer segments, and enhance customer conveniences. Rise of neobanks providing app-based banking is expanding access to digital payment tools for underbanked millennials and Gen Z. Neobanks leverage low-cost operating models to acquire unserved segments. Moreover, proliferation of payment bank models to serve migrant workers, rural populations is bringing financial access via mobile devices. Mainstream adoption of open banking and Banking as a Service is allowing non-bank fintech to embed digital payment capabilities and offer value-added services. These B2C payment market trends further drive the growth.
Moreover, the growth of the digital wallet segment of B2C payment market is driven by rapid consumer acceptance and supported innovations. India and China have already mainstreamed application-based wallets, while North America and Europe expected to mirror adoption curve through enabling smartphones and NFC transit infrastructure. Key opportunities exist around cross-border remittances, micro-P2P payments via social integration.
Cashless payment initiatives by governments in countries such as India, China, Brazil are driving consumer adoption of mobile payment apps and wallets. Investments in merchant acceptance networks by large players such as Alipay, PayPal, Apple Pay are expanding ubiquity of wallets for in-store and online purchases. Partnerships between wallets, banks and financial service providers are promoting consumer preferences for wallets across different purchase types. Contactless transit/micropayment use cases occur due to high speed and convenience relative to cash payments.
Diversification of offerings by wallets platforms beyond payments into financial services, data monetization also provides additional revenue streams. Furthermore, interoperability initiatives around unified QR codes between provider schemes can significantly expand merchant acceptance coverage. In the current landscape, prominent players such as PayPal, Apple Pay, and Google Pay are actively competing to secure a significant B2C payment market share. The consumer wallet space is steadily moving towards establishing itself as the preferred transaction interface.
Banking and financial institutions are expected to continue to remain pivotal stakeholders within the broader B2C payments ambit considering their ownership of underlying payment rails and infrastructure that facilitates transacting. Additional growth levers include expanding services linked to account aggregation, data enrichment and value-added experiences embedded in banking apps. For instance, personalized insights around expenditure patterns, micro savings nudges, offer discovery to drive consumer stickiness. Investments into open banking APIs and infrastructure modernization upgrades also bodes well for banks to retain integral role in payments orchestration.
The B2C payment market is segmented by type, industry vertical, and region. In terms of type, the B2C payment market is fragmented into cards, digital wallet, and others. Depending on industry vertical, it is segmented into BFSI, healthcare, hospitality & tourism, transportation & logistics, retail & e-commerce, energy & utilities, and others. Region-wise, B2C payment market is analyzed across North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa.
Moreover, growing demand for cross-border leisure travel along with staycations focused domestic tourism is benefiting hospitality and related logistics sectors. Payment innovation targeted at easing forex uncertainty and enhancing on-trip mobility experience offers upside for players. For instance, smart mobility cards usable across transit modes, tourist SIMs with attractive data packs bundled along with accommodation bookings can augment prospect experience significantly. Value added services integration with hospitality payments unlocks long term opportunities in B2C payment industry.
The travel and hospitality industries are accelerating adoption of secure, convenient digital payment solutions to cater to post-pandemic revenge travel and capture high consumer spending. Integration of leading digital wallets and mobile payment platforms across hotel and airline booking platforms, rental services, and travel aggregators to enable one-click payments.
Key Findings of the Study
- By type, cards segment accounted for the largest B2C payment market share in 2022.
- Region wise, North America generated the highest revenue in B2C payment market in 2022.
- Depending on B2C payment industry vertical, the BFSI segment generated the highest revenue in 2022.
The key players profiled in the B2C payment market analysis are MasterCard Incorporated, The American Express Company, Visa Inc., Apple Pay, PayPal Payments Private Limited, Capital One Financial Corporation, The Bank of America Corporation, Payoneer Inc., Stripe, and Due Inc. These players have adopted various strategies to increase their B2C payment market penetration and strengthen their position in the usage-based insurance industry.