Visa and Mastercard are driving evolution in the digital payments market, with payments expected to grow from $3.8 trillion this year to more than $5 trillion by 2020, according to new predictions from Juniper Research.
The new report has found that while Visa and Mastercard have adopted differing strategies when it comes to encouraging adoption of digital payments, both firms have helped accelerate consumer take-up. Their distinct evolutionary strategies in the area will underpin the success that the market is expected to see over the next few years.
Mastercard has a two-pronged approach to digital payments, developing partnerships with third-party wallet providers such as Apple and Samsung while also introducing its own API-based wallet. Meanwhile, Visa has attempted to reduce friction in online payments by implementing a one-click login system called Visa Checkout, which is helping to increase conversion rates and overall online customer speed.
The two financial services giants weren’t the only companies singled out for praise by Juniper’s report. The research also highlighted PayPal as the leader in the digital wallet space, with its decision to enable in-store NFC payments using Host Card Emulation technology a “potential game-changer for the US digital wallets space”, and Vodafone, for its continuing success in driving digital payment adoption in sub-Saharan Africa via a number of subsidiaries.
The research also defined a series of key strategic approaches that players across the digital payments market need to adopt to continue growth. For example, payment service providers (PSPs) need to be able to offer merchants a range of options, including hosted payment pages and API integration, enabling them to choose how much direct control they wish to have over the payment process.
“To succeed in an increasingly competitive environment, it will be essential for PSPs to provide merchants with an array of flexible, localised solutions with transparent pricing structures,” said Dr Windsor Holden, author of the research.