Merchant Services Industry Statistics 2024: Innovations, Payments, and Security
Barry Elad
Updated · Nov 27, 2024
In recent years, the merchant services industry has seen a tremendous evolution, shifting from traditional cash-based transactions to a digital-first ecosystem. Today, businesses and consumers alike are part of a payment landscape that prioritizes speed, security, and convenience. The pace of growth shows no sign of slowing, with innovative technologies like contactless payments, digital wallets, and cryptocurrencies becoming everyday staples. This article delves into key statistics and trends shaping merchant services in 2024, offering a comprehensive view of an industry at the forefront of global commerce.
Editor’s Choice: Key Industry Milestones
- The global merchant services market is projected to reach a valuation of $130 billion by 2024, reflecting a robust compound annual growth rate (CAGR) of 9.8% since 2020.
- Contactless payments surged in popularity, with 85% of consumers preferring this method in 2023, a rise from 78% in 2022.
- In the United States, digital wallet payments accounted for 41% of online transactions in 2023, up from 36% the previous year.
- Cryptocurrency acceptance by merchants grew by 16% in 2023, with Bitcoin and Ethereum leading as preferred digital assets for transactions.
- Point-of-sale (POS) terminals experienced an annual growth of 7.2%, with smart terminals representing 64% of all devices in use as of 2024.
- The eCommerce sector continues to thrive, contributing 30% to the total transaction volume in merchant services, with projections suggesting an increase to 35% by the end of 2025.
- Fraud prevention technologies, including AI-driven solutions, have reduced transaction fraud by 24% in the last year alone, marking a significant improvement in industry security.
Market Size and Growth Projections
- The global merchant services market was valued at approximately $110 billion in 2023, with projections indicating a leap to $130 billion by 2024.
- North America remains the largest market, accounting for 45% of global revenues, driven by extensive adoption of digital payment systems and a high rate of credit card usage.
- Asia-Pacific is the fastest-growing region, with a projected CAGR of 12.5% from 2023 to 2028, fueled by a booming eCommerce industry and digital payment infrastructure in countries like China and India.
- Small and medium-sized enterprises (SMEs) represent 40% of the market, with a growing trend of adopting integrated payment solutions to meet evolving consumer preferences.
- Mobile point-of-sale (mPOS) systems are forecasted to grow by 14.7% annually, reaching a market value of $55 billion by 2025.
- The B2B payments market within the merchant services industry is expected to grow at a rate of 10.3%, driven by the shift towards digital invoicing and real-time payments.
- Embedded finance solutions, such as Buy Now, Pay Later (BNPL), are on the rise and are expected to make up 30% of online sales by 2026.
Payment Processing Market in the USA
- The United States remains the leader in merchant services, accounting for $56 billion in annual revenue, representing over 50% of North America’s total market.
- Credit card payments dominate the US payment landscape, constituting 37% of transactions in 2023, with debit cards following closely at 33%.
- Digital wallet usage has surged, accounting for 24% of all US payments, with platforms like Apple Pay and Google Wallet leading the market.
- In-store mobile payments experienced a 28% growth in 2023, as more consumers embraced contactless payment solutions.
- The U.S. small business sector saw a 5% increase in digital payment adoption, spurred by the need for secure and convenient transaction methods during the COVID-19 pandemic.
- E-commerce transactions accounted for 20% of total payment volume in the United States, a significant increase driven by online shopping habits.
- Real-time payment adoption in the US grew by 22% in 2023, with consumers and businesses alike valuing instant processing capabilities over traditional payment methods.
| Metric | Value |
| Credit Card Transactions Share | 37% |
| Debit Card Transactions Share | 33% |
| In-Store Mobile Payment Growth | +28% |
| Real-Time Payment Growth | +22% |
Number of Merchants and Business Landscape
- As of 2024, the total number of active merchants in the United States is approximately 31 million, reflecting a steady growth rate of 3% annually over the past five years.
- Small and medium-sized enterprises (SMEs) make up 75% of the total merchant market, highlighting the crucial role of smaller businesses in the payment services industry.
- E-commerce merchants constitute 40% of new merchant accounts, driven by the increased consumer preference for online shopping.
- Omnichannel solutions are gaining traction, with 62% of merchants now using integrated payment platforms that support both in-store and online transactions.
- The food and beverage industry leads in merchant services growth, with 29% of transactions processed via mobile and contactless payment methods in 2023.
- Healthcare providers are rapidly adopting digital payments, with 19% of their transactions now completed via mobile payment methods, a jump from 12% in 2022.
- The retail sector remains the largest consumer of merchant services, accounting for 52% of all transactions processed in the industry in 2023.
Payment Method Insights
- Credit cards remain the preferred payment method globally, representing 42% of total transactions processed by merchant services in 2023.
- Mobile payments have surged in popularity, with 46% of millennials now using digital wallets as their primary payment method.
- Buy Now, Pay Later (BNPL) usage among consumers grew by 40% in 2023, as younger shoppers embraced flexible payment options for both online and in-store purchases.
- Cryptocurrency payments saw a 12% increase in adoption among global merchants, with Bitcoin and Ethereum as the most frequently accepted cryptocurrencies.
- Bank transfers continue to be a popular payment option, particularly in Europe, accounting for 27% of transactions in this region in 2023.
- Contactless cards accounted for 60% of in-store transactions in 2023, a notable rise as consumers favored touchless options post-pandemic.
- Cross-border e-commerce payments represent a growing segment, with 32% of merchants now supporting international payment options due to increased global online shopping.
| Payment Method | Percentage/Usage |
| Credit Card Transactions | 42% |
| Millennials using Digital Wallets | 46% |
| Contactless Cards | 60% |
| Cross-border E-commerce Support | 32% |
Technological Innovations and Payment Technology Trends
- Artificial intelligence (AI) is revolutionizing merchant services, with 78% of payment processors now using AI to detect fraud and improve transaction security.
- Blockchain technology is gaining traction, with 15% of payment providers incorporating it into their systems to enhance transparency and traceability.
- Biometric payment systems, including fingerprint and facial recognition, were adopted by 23% of merchants in 2023, primarily for in-store security and convenience.
- Cloud-based payment processing solutions are now utilized by 72% of businesses, enabling flexible and scalable operations for merchants of all sizes.
- Voice-activated payments represent an emerging trend, with 9% of US consumers completing purchases through voice assistants in 2023.
- Tokenization technology, which replaces sensitive card data with unique tokens, is now employed by 88% of digital payment platforms to improve security and reduce fraud.
- Near-field communication (NFC), which powers many contactless payment methods, experienced a 21% increase in merchant adoption in 2023, due to rising consumer demand for fast and secure payment options.
Security Advancements and Fraud Prevention
- AI-powered fraud detection systems reduced fraudulent transactions by 26% in 2023, as more merchants adopted advanced security protocols.
- Tokenization has become a standard in fraud prevention, with 90% of payment processors implementing it to protect consumer data during transactions.
- The adoption of multi-factor authentication (MFA) grew by 34% among merchants, with 60% now requiring additional verification steps for sensitive transactions.
- End-to-end encryption (E2EE) is now employed in 92% of digital transactions, ensuring that sensitive information is protected from start to finish.
- 3D Secure 2.0, an authentication protocol for online transactions, saw a 22% increase in adoption by merchants looking to reduce online fraud and improve transaction security.
- Real-time fraud monitoring solutions are now used by 67% of large merchants, allowing immediate detection and mitigation of suspicious activities.
- PCI DSS compliance rates among merchants have reached 85%, a significant improvement that ensures businesses follow industry standards for data protection.
| Security Measure | Adoption Rate (Year) |
| Tokenization | 90% |
| Multi-Factor Authentication (MFA) | 60% |
| End-to-End Encryption (E2EE) | 92% |
| Real-Time Fraud Monitoring | 67% |
| PCI DSS Compliance | 85% |
Digital Currency and Payments
- Cryptocurrency as a payment method has gained notable traction, with 15% of online merchants now accepting digital currencies like Bitcoin and Ethereum as of 2024.
- The global digital payment market is expected to reach $20 trillion by the end of 2024, marking a 14% year-over-year growth fueled by the adoption of digital wallets and blockchain-based payments.
- Central Bank Digital Currencies (CBDCs) are under development in over 80 countries, with 10% already in the pilot stage, aiming to create a regulated digital payment option.
- Stablecoins pegged to traditional currencies, grew in usage by 25% over the past year, providing businesses a way to manage transaction volatility while benefiting from blockchain’s efficiency.
- Decentralized finance (DeFi) applications are on the rise, with 12% of digital currency users utilizing DeFi for payment processing, lending, and other financial services.
- Cross-border cryptocurrency transactions increased by 18% in 2023, as businesses recognized the speed and cost-effectiveness of blockchain for international payments.
- Digital wallet adoption will expand to 2.8 billion users globally by 2024, spurred by convenience, security, and compatibility with traditional bank accounts and cryptocurrency alike.
Regional Insights
- In North America, 67% of all payments are conducted digitally, with credit cards and digital wallets leading as the preferred payment methods.
- Europe shows a strong preference for bank transfers and debit cards, with 47% of all digital transactions completed through these methods in 2023.
- Asia-Pacific remains the fastest-growing market for digital payments, with mobile payments projected to grow by 16.4% annually, driven by high smartphone penetration in China and India.
- Latin America has seen a 28% rise in e-commerce payments in the last year, with digital wallets like Mercado Pago and PicPay capturing significant market share.
- In Africa, mobile money platforms such as M-Pesa are leading, with 75% of digital transactions conducted through mobile, providing access to financial services in underserved regions.
- Middle Eastern countries have shown strong growth in digital wallet usage, with 20% of consumers now using platforms like Apple Pay and Samsung Pay for online purchases.
- Cross-border e-commerce is booming globally, with 42% of merchants now supporting multiple currencies and payment methods to cater to international shoppers.
| Region | Key Payment Trends/Preferences |
| North America | 67% digital payments; credit cards, digital wallets lead |
| Europe | 47% bank transfers, debit cards (2023) |
| Asia-Pacific | Mobile payments growing at 16.4% annually |
| Latin America | 28% rise in e-commerce payments, digital wallet growth |
| Africa | 75% digital transactions via mobile money |
| Middle East | 20% digital wallet usage |
| Global Cross-Border | 42% merchants support multiple currencies |
Recent Developments
- Real-time payment (RTP) adoption surged in the United States, with 41% of financial institutions offering RTP services to enhance transaction speed and customer satisfaction.
- The Buy Now, Pay Later (BNPL) market grew by 30% in 2023, with major players expanding into new regions to meet consumer demand for flexible payment options.
- Blockchain technology continues to revolutionize the industry, with 15% of merchant services providers now using blockchain for faster, more transparent payment processing.
- Artificial intelligence (AI) advancements have led to a 20% improvement in transaction fraud detection, as payment processors employ predictive models to monitor and flag suspicious activity.
- The Federal Reserve’s FedNow Service, expected to launch in 2024, aims to offer real-time payments, fostering faster transactions for businesses and consumers alike in the United States.
- Voice commerce is an emerging trend, with 8% of consumers now using smart speakers like Amazon Alexa and Google Assistant to make purchases, signaling a shift toward hands-free payments.
- The biometric payment market saw a 27% growth in 2023, with fingerprint and facial recognition systems being integrated into point-of-sale terminals for enhanced security.
Conclusion
The merchant services industry is undergoing a transformative shift as digital payments, emerging technologies, and customer demands reshape the landscape. As we move into 2024, the continued growth in contactless payments, digital currencies, and AI-driven security measures signals an industry that is both dynamic and resilient. Businesses that embrace these innovations are positioned to thrive in a fast-evolving market, while customers benefit from faster, safer, and more convenient ways to transact. Looking ahead, the industry’s focus on enhancing payment technology and expanding digital access suggests an exciting future for merchants and consumers alike, with 2024 set to be a pivotal year for advancements in global commerce.
Sources
Barry Elad
Barry Elad is a dedicated tech and finance enthusiast, passionate about making technology and fintech concepts accessible to everyone. He specializes in collecting key statistics and breaking down complex information, focusing on the benefits that software and financial tools bring to everyday life. Figuring out how software works and sharing its value with users is his favorite pastime. When he's not analyzing apps or programs, Barry enjoys creating healthy recipes, practicing yoga, meditating, and spending time in nature with his child. His mission is to simplify finance and tech insights to help people make informed decisions.
