In 2013, banks across the world handled a total payment volume of $ 410 trillion. That is about five times the total GDP of all the countries of the world combined. Furthermore, payment processing generated between 25% to 40% of the total revenue for most banks - that is about $1.7 trillion annually. Many experts believe that this is just the beginning. The payments industry is expected to grow at over 7% over the next five to six years- a remarkable feat considering the lackluster global macroeconomic scenario.

With so much money on the line and such attractive growth prospects, it is no wonder that the sector is being heavily targeted by banks, financial institutions, new FinTech startup and existing Tech giants. All this competition is leading to new and innovative products being launched and a gradual decline in transaction costs and times for consumers. A welcome change in an industry that was opaque in terms of costs and vague in terms of efficiency and processing times.

Key trends in the Global Payment Processing Industry

The emergence and rapid growth of Non-Banking participants is revolutionizing the industry. The threat to banks is not only from new FinTech startups but also established Tech giants which are making inroads into the industry.

Modernization of payment infrastructure. Many financial institutions and banks are updating their domestic payment facilities and infrastructure in order to compete with the digital-only players.

International payment transfers are still rather expensive for banks. The payment charges are often opaque and processing times are long and unpredictable. It is no surprise then that International Money Transfer agents have so successfully penetrated the market for cross border and cross currency payments.
With many customers now relying heavily on the digital channel for their basic banking needs, they are now demanding the same level of service and ease of use in more advanced banking products. More importantly, this demand for faster and cheaper service is not restricted to retail customers but also to corporate clients who wonder why the digital revolution in consumer payments is not percolating quickly into the corporate banking sphere.

The Future

If there is one industry which is witnessing a massive disruption in 2016, it's the banking industry and specifically the payment processing business. With many new entrants with innovative technological solutions, existing banks are finding it difficult to adapt to the changing landscape in time. This is the key reason for success of players like Payzoff who focus aggressively on the technological aspects and can rapidly integrate any new innovations into their platform. By offering consumers the choice to select from dozens of payment platforms across the world, platforms like Payzoff ensure that the customer can always select the method that is cheaper, faster, safer and more convenient to them. Over time as the industry scales new heights (payment processing is expected to hit $ 700 trillion by 2023), such platforms will become even more relevant for merchants who wish to offer their customers the option to pay how they want.