PAYMENT FACILITATOR

GLOBAL OPPORTUNITY
ANALYSIS AND
INDUSTRY FORECAST
2018–2025
 As software companies are increasingly
becoming the platform for electronic payment
acceptance, they are in need of a structure that
allows them to take control of their customers’
payment experience. This will enable them
to do what they do best: provide the best
possible experience for their customers.

The payment facilitator (PF) model, which was popularized by PayPal, Square
and Stripe then later embraced by Mastercard and Visa, allows software
companies to own their own payments product. This gives them the ability to
dictate underwriting and onboarding processes, fee structures and funding
schedules. This increase in control also translates to a significantly larger
share of the payments revenue for payment facilitators.

The payment facilitator model also provides a streamlined process for

merchants to begin accepting electronic payments. Early payment facilitators
like PayPal, Square, Stripe, and Shopify (known as “payment facilitator mega-
players”) pioneered a system that contains fewer hurdles and roadblocks for
emerging merchants looking to process digital payments, setting the stage
for software companies across all verticals to follow suit.

According to recently collected data1 from AZ Payments Group (AZPG), in 1 Source Data: AZPG
calculations using data
partnership with Infinicept, in 2019, payment facilitators processed $929
from Double Diamond
billion in gross payment volume (GPV) globally, accounting for 6% of all Group / Infinicept, Boston
transactions worldwide, and with the influx of new payment facilitators, future Consulting Group, Cap
Gemini, World Bank,
rates of growth will be exponential.
Bank of Mexico, Visa,
MasterCard, PayPal,
Between 2018 and 2019, the GPV processed by all PFs worldwide increased Square, Shopify, Owler.com,
Clearbit.com, interviews
from $699.11 billion (2018) to $928.64 billion (2019), an increase of over 32%
with global payments
in just one year. By 2025, the global GPV processed by payment facilitators consultants, integrated
is expected to reach over $4 trillion, experiencing a 28.4% compound annual payments executives,
growth rate (CAGR) (figure 1). payment facilitators, and
others.

PAYMENT FACILITATOR GLOBAL OPPORTUNITY ANALYSIS AND INDUSTRY FORECAST, 2018–2025 2

 Global Payment Facilitator GPV Figure 1
Global Payment Facilitator
US$ billions, All PFs
GPV 2018–2025
4,013

3,185
CAGR = 28.4%
2,521

1,987
1,558
1,211
929
699

2018 2019 2020 2021 2022 2023 2024 2025

Number
Such growth can of Global
be explained Payment
by an Facilitators
increased number of payment facilitators
worldwide and an expansion of current payment facilitators’ customer bases.
Global Payment Facilitator GPV
Many payment facilitators’
US$ billions, All PFs customer bases are rapidly growing 2,381 due to the
seamless onboarding process they CAGR provide
= 13.8%their customers. Payment
2,108 4,013
facilitator mega-players like Shopify and Square have
1,860 shown that offering a
quicker, frictionless onboardingCAGR process 1,635
results in a competitive
3,185 advantage in
= 28.4%
1,430
the marketplace, especially1,244 when operating in the small and micro-merchant
2,521
spaces. 1,075
966
1,987
1,558
In 2018, there were 966 payment
1,211 facilitators, increasing to 1,075 in 2019.
AZPG estimates that 929the number of PFs will increase at a CAGR of 13.8%,
699
fueled by the influx of software companies becoming payment facilitators.
2018 2019 2020 2021
By 2025, it is predicted by that there will 2022 2023
be 2,380 2024
PFs 2025
operating worldwide
(figure 2). 2018 2019 2020 2021 2022 2023 2024 2025
Global Payment Facilitator GPV
Number of Global Payment Facilitators
US$ billions, excluding Figure 2
PayPal, Square, Stripe, Shopify Total Number of Global
1,580
Payment Facilitators
1,324 2018–2025
CAGR = 25.7% 2,381
CAGR = 13.8% 1,097 2,108
897 1,860
1,635
722
1,430
569
1,244
436
1,075
966
319

2018 2019 2020 2021 2022 2023 2024 2025

2018 2019 2020 2021 2022 2023 2024 2025

Number of Global Payment Facilitators Global Payment Facilitator GPV
Global Payment Facilitator GPV US$ billions, excluding
PayPal, Square, Stripe, Shopify
PAYMENT FACILITATOR GLOBAL OPPORTUNITY ANALYSIS AND INDUSTRY FORECAST,
4,2292018–2025 3
US$ billions, excluding
PayPal, Square, Stripe, Shopify
1,580
 1,558
1,211
929
699

2018 2019 2020 2021 2022 2023 2024 2025

One of the largest

Numbersegments of companies
of Global Paymentbecoming payment facilitators
Facilitators
is the vertically focused software provider. Companies such as Toast in the
restaurant vertical, Phreesia in the healthcare vertical, or RunSignup in the
event management vertical have all become payment facilitators.2,381
These
companies are now able to tailor their payments
CAGR = 13.8% product
2,108 to uniquely fit the
needs of their customers, allowing those customers
1,860 to operate as effectively
as possible. 1,635
1,430
1,244
AZ Payments Group 1,075
966 estimates that payment facilitators (excluding the
payment facilitator mega-players) processed a total of $436 billion in
electronic payments in 2019. As the number of payment facilitators increases,
this is anticipated to grow at a CAGR of 25.7%, with PFs crossing the trillion-
dollar GPV mark in 2023 (figure 3).
2018 2019 2020 2021 2022 2023 2024 2025

Global Payment Facilitator GPV Figure 3

Global Payment Facilitator
US$ billions, excluding GPV Excluding “Mega-
PayPal, Square, Stripe, Shopify
1,580 Players” 2018–2025

1,324
CAGR = 25.7%
1,097
897
722
569
436
319

2018 2019 2020 2021 2022 2023 2024 2025

The scenario inNumber of Global Payment

the aforementioned Facilitators
table is AZPG’s conservative estimate.Global Payment Facilitator GPV
Figures 4 & 5 show a likely scenario in which payment networks, such asUS$ billions, excluding
Mastercard and Visa, and governments bullishly invest in the growth of PayPal, Square, Stripe, Shopify
4,229
payment facilitators. This would increase the predicted CAGR from 13.8% in
the baseline scenario to 27.4%. As opposed to 2,381 payment facilitators by
CAGR = 27.4% 1
2025, the number could be as high as 4,229. By the end 3,095
of 2021, there could CAGR = 28.9%
be close to 1,500 PFs worldwide, all of whom 2,340will be processing just over 1,185
CAGR = 11.3%
$745 billion in payments, and in 2023 they will be processing $1.9 trillion 941
1,836
(figures 4 & 5). 1,500 746
1,260 584
966 1,075 446
326

2018 2019 2020 2021 2022 2023 2024 2025 2018 2019 2020 2021 2022 2023

Global Payment Facilitator Revenue Global Payment Facilitator Revenue

PAYMENT FACILITATOR GLOBAL OPPORTUNITY ANALYSIS AND INDUSTRY FORECAST, 2018–2025 4
US$ billions, excluding US$ billions, excluding
PayPal, Square, Stripe, Shopify PayPal, Square, Stripe, Shopify
 436
319

2018 2019 2020 2021 2022 2023 2024 2025

2 2023 2024 2025

Number of Global Payment Facilitators Global Payment
FigureFacilitator
4 GPV
Total Number of Global
GPV US$ billions, excluding
Payment Facilitators
PayPal, Square, Stripe, Shopify
4,229 (Accelerated Scenario)
2018–2025
1,580 CAGR = 27.4% 1
3,095 CAGR = 28.9%
1,324
% 1,185
2,340
1,097 CAGR = 11.3% 941
1,836
7 1,500 746
1,260 584
966 1,075 446
326

2018 2019 2020 2021 2022 2023 2024 2025 2018 2019 2020 2021 2022 2023

2 2023 2024 2025

Global Payment Facilitator Revenue Global Payment Facilitator Revenue

t Facilitators Global Payment Facilitator GPV Figure 5
US$ billions, excluding US$ billions, excluding
PayPal, Square, Stripe, Shopify Global
PayPal, Square, Stripe, Payment Facilitator
Shopify
US$ billions, excluding
PayPal, Square, Stripe, Shopify GPV Excluding “Mega-
4,229 13
1,928 Players” (Accelerated
Scenario) 2018–2025
CAGR = 28.5% CAGR = 31.8%
27.4% 10
1,502
3,095 CAGR = 28.9% 9
8
7 1,185 7
2,340
6
5 941
6
4 746 4
3 584 3
2 446 2
326

2018 2019 2020 2021 2022 2023 2024 2025 2018 2019 2020 2021 2022 2023 2

2 2023 2024 2025 2018 2019 2020 2021 2022 2023 2024 2025

Revenue Globaland
Payment networks Payment
governments Facilitator Revenue
alike have strongAccelerated
incentives scenario to invest in
PF expansion. As more payment facilitators offer merchants a seamless path
US$ billions, excluding
to begin accepting electronic
PayPal, Square, payments, usage of digital payments increases,
Stripe, Shopify
15
boosting payment network revenue.
13
12
% At the same time, many governmentsCAGR = seek
31.8%increased tax collection, a goal
10
that is greatly facilitated by replacing hard-to-track
9 cash transactions with
8
easy-to-track electronic ones. Many are now 7 actively supporting and fostering
6
the payment facilitator model to help expand electronic payment acceptance
within their countries. Companies
4 like Innovectives, a PF based in Nigeria, are
3
providing merchants
2 throughout their region who were primarily cash-based
with the ability to easily begin accepting electronic payments.

2 2023 2024 2025 2018 2019 2020 2021 2022 2023 2024 2025

PAYMENT FACILITATOR GLOBAL OPPORTUNITY ANALYSIS AND INDUSTRY FORECAST, 2018–2025 5

 2018 2019 2020 2021 2022 2023 2024 2025

2 2023 2024 2025

Number of Global Payment Facilitators Global Payment Facilitator GPV

GPV This expanded electronic payments acceptance also contributes to these
US$ billions, excluding
countries’ economies. A recent study conducted for Visa by Moody’s PayPal, Square, Stripe, Shopify
4,229
Analytics examined 70 countries/regions and concluded that the growth
1,580
in electronic payments added $296 billion to the collective gross domestic
CAGR = 27.4% 1
1,324 product (GDP) of those 70 countries between 2008 and 2012.
3,095 CAGR = 28.9%
% 1,185
1,097 2,340
By owning more of the
CAGR customer’s payments process, software companies
= 11.3% 941
7 1,836
will see a significant increase in payments
1,500 revenue by becoming payment 746
1,260 584
facilitators. As 966
payment1,075volumes increase, transaction revenue growth will 446
follow suit. PFs will generate between $13 and $15 billion in transaction 326
revenue by 2025 with the transaction volume growing at a 28.5% CAGR
(figures 6 & 7).
2018 2019 2020 2021 2022 2023 2024 2025 2018 2019 2020 2021 2022 2023

2 2023 2024 2025

Global Payment Facilitator Revenue Global Payment

FigureFacilitator
6 Revenue
t Facilitators Global Payment Facilitator GPV Global Payment Facilitator
US$ billions, excluding US$ billions, excluding
Transaction Revenue
US$ billions,
PayPal, excluding
Square, Stripe, Shopify PayPal, Square, Stripe, Shopify
PayPal, Square, Stripe, Shopify Excluding “Mega-Players”
4,229 1,928 2018–2025
13

27.4% CAGR = 28.5% 1,502 CAGR = 31.8%

3,095 CAGR = 28.9% 10
9
1,185
8
2,340 7 7
941 6
6
5
746
4
584 4
3
446 3
2
326 2

2018 2019 2020 2021 2022 2023 2024 2025 2018 2019 2020 2021 2022 2023
2 2023 2024 2025 2018 2019 2020 2021 2022 2023 2024 2025

Revenue Global Payment Facilitator Revenue Accelerated scenario Figure 7

Global Payment Facilitator
US$ billions, excluding Transaction Revenue
PayPal, Square, Stripe, Shopify
15 Excluding “Mega-Players”
(Accelerated Scenario)
13
12 2018–2025
% CAGR = 31.8%
10
9
8
7
6

4
3
2

2 2023 2024 2025 2018 2019 2020 2021 2022 2023 2024 2025

PAYMENT FACILITATOR GLOBAL OPPORTUNITY ANALYSIS AND INDUSTRY FORECAST, 2018–2025 6

CONCLUSION
The number of payment facilitators will grow rapidly in the coming years. The
benefits to software companies have become clear and governments and
payment networks are investing heavily to cultivate further growth.

Early adopters and innovators have shown

that owning more of the overall payments
experience on their platform and creating a
more seamless path for merchants to begin
accepting credit card payments helps create
a better payments ecosystem for them and
their customers.

At the same time, many large processors and banks have joined in and are
aggressively promoting products to support payment facilitators. Also,
companies like Infinicept provide all of the payments infrastructure and
expertise needed to help new PFs get up and running quickly and operate
efficiently for years to come.

PAYMENT FACILITATOR GLOBAL OPPORTUNITY ANALYSIS AND INDUSTRY FORECAST, 2018–2025 7