Statista published the latest numbers of FinTech startups worldwide, according to which 26,000 have been active in 2021. That is an impressive number and an even more impressive growth rate of around 20% compared to 2020. The number of newly founded FinTech startups is still growing strongly. Fintechs account for roughly 20% of the revenues in payments-related fields. Yet FinTechs are only a tiny part of the global online financial services industry.
The market for so-called Merchant Service Providers (MSP) is exploding. MSPs are orchestrating payment processes for online merchants, i.e., online shops, online traders, and other online ventures. There are tens of thousands of MPS. Only a few of them are regulated and supervised by financial market regulators.
The total transaction value of digital payments grew from $4.1 trillion in 2019 to $5.2 trillion in 2020. With a 12.8% projected CAGR from 2019 to 2023, the total value of transactions is expected to reach $6.7 trillion by 2023.
Payments revenues globally have been estimated to be somewhere around $1.5 trillion to $2 trillion in 2021. The Boston Consulting Group (BCG) expects the total revenue pool to reach $2.9 trillion by 2030.
The COVID-19 pandemic has forced small and medium-sized businesses (SMB) to digitize their business. This will continue to drive up global online payment volumes over the next few years and with it the demand for MSPs.
Merchant acquiring is one of the fastest-growing businesses in payments. From 2015 to 2019, revenues in this area increased at an average rate of 11.8% globally, driven by e-commerce adoption, new payments methods, and value-added services (VAS) such as risk and fraud management and merchant and consumer finance. BCG estimates that this segment will grow with a CAGR of 11.3% expected through 2025.