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As the use of payment applications spreads across various industries, the demand for digital payment systems grows. As a result, the quantity of fraudulent transactions in the E-commerce industry has increased, and demand for enhanced payment security solutions for digital e-commerce has increased. The rising frequency of data breaches is one of the primary drivers driving the expansion of the payment security business. The amount of money lost as a result of data breaches grows in lockstep with the number of breaches. As a result, there is a growing demand for payment security solutions..

Market Drivers

Growing Volume of Digital Payments Felicitates Efficient Payment Security Model

In 2020, majority of small firms in every sector suffered a significant setback. However, embracing e-commerce and online payment systems has played a significant part in keeping such businesses afloat a year later. According to a survey by fintech startup Razorpay, digital payment transactions increased by 76% in January to March 2021 compared to same period in 2020 in India alone. According to US Department of Commerce estimates, consumers spent $791.70 billion online with US retailers in 2020, increasing 32.4 percent year over year. This is the highest yearly ecommerce growth in the United States in at least two decades. It's also more than double the 15.1 percent increase from the previous year. As online shopping and mobile e-commerce enable new methods to shop for and buy goods and services, e-commerce continues to revolutionise the retail environment in the United States, and consumer confidence remains relatively high. E-commerce is predicted to rise at double-digit rates every year until 2021.

The rise of the internet of things (IoT) has resulted in the addition of payment capabilities to a number of linked gadgets and wearables. MasterCard, for example, has established a platform that allows consumers to turn wristbands, smart-watches and smart phones into payment devices. Many countries has developing a linked automobile solution that will allow customers to pay for things like gas, toll and parking directly from their vehicle. Traditional payment transaction infrastructure has been reformed thanks to machine learning and IoT. These aids in the security of data and the protection of consumers when completing online transactions, which is expected to enhance the market's growth in the coming years. Moreover, payment security solution providers are engaged in continuous R&D to develop more sophisticated security solution that would make fraudulent activities unattainable. These factors will drive the market in of payment security in the coming years.

Rising Fraudulent Activities in the Digital Payment Space Post COVID-19 Pandemic

According to Europe's policing organization Europol, the coronavirus epidemic has triggered a dramatic increase in online retail fraud, with fraudsters continuing to prey on victims working from home. Criminals sold things without delivering them, swindled online stores with lax security, or utilized delivery services as phishing baits. Criminal gangs posing as delivery services pretended to offer information about a parcel, but in reality, were attempting to obtain the victim's account and credit card information. This includes "smishing," the technique of sending messages via SMS on mobile phones.

The volume and accessibility of sensitive consumer data, as well as the pandemic-driven global boom in internet purchasing, are inspiring fraudsters to be bolder. An ecosystem conducive to card payment fraud has quickly emerged as more customers save their payment card data online and increase their online purchase frequency. Every year, businesses lose about 5% of their revenue to fraud, amounting to nearly €3.6 trillion in fraud losses worldwide. Despite the introduction of Secure Customer Authentication (SCA) and biometrics, online payment fraud losses in Europe would climb by more than 50% by 2024.

Market Segmentation

Payment Security market is segmented based on solution type, platform type and application. Based on solution type, the market is segregated fraud detection & prevention, Fraud Detection and Prevention, and tokenization. By transforming the name and digits into various tokens or encrypting it with algorithms, these solutions play a critical role in securing consumer card data. The most extensively utilized payment security solution is fraud detection and prevention as it offers analysis of fraud activities, predictive analysis, consumer behavioral analysis and compliance & risk. Based on platform type, the market is segmented into web-based and POS based. In terms of application, the market is classified into healthcare, e-commerce & retail, travel, telecom & it, media & entertainment, education, others.

Regional Overview

North America held the major market share in the global payment security market in 2020

Over the projection period, North America is likely to hold the greatest share of the total market, while Asia Pacific is expected to grow at the fastest rate. In the North American market, the United States is leading the way. The region will continue to dominate the market space during the projected period, as it is home to some of the most prominent market participants, including Paypal, Bluefin, Braintree, and Elavon. The region also has the presence of the market's key companies, among others.

Asia Pacific’s rise can be linked to the growing number of retail and consumer products startups in nations like China, India, and Singapore. Consumer acceptance of mobile payments is leading to a rise in digital payment use across the area. One of the key development boosters for the regional market is China's thriving retail industry and India’s digital transformation in last five years which predicts a promising future for payment security market during the forecast period.

Competitive Landscape

The prominent players of the global payment security involve Ingenico Epayments, Tokenex, Intelligent Payments, Bluefin Payment Systems, Geobridge Corporation, Cybersource, Index, Mastercard and Evalon among others

Market Segmentation

Market By Solution Type

• Fraud Detection and Prevention
• Encryption
• Tokenization

Market By Platform

• Web Based
• POS Based

Market By Application

• Healthcare
• E-commerce & Retail
• Travel
• Telecom & IT
• Media & Entertainment
• Education
• Others

Market By Geography

• North America
  • U.S.
  • Canada
• Europe
  • U.K.
  • Germany
  • France
  • Spain
  • Rest of Europe
• Asia-Pacific
  • China
  • Japan
  • India
  • Australia
  • South Korea
  • Rest of Asia-Pacific
• Latin America
  • Brazil 
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • South Africa
  • Rest of Middle East & Africa