The payments market is becoming increasingly complex, writes GlobalData analyst Bhavika Shah. Alternative payment tools are proliferating, and geographic markets are developing their own unique regulatory environments and unique mixes of payment tools to match the needs of consumers. Consumers can now buy online from anywhere using any number of tools, depending on where they are located and where they are buying from. As a result of this complexity, payment processors and acquirers are consolidating their market position to achieve the scale necessary to serve the ever-expanding needs of a global merchant client base.
Global Payments’ $22 billion merger with TSYS marks the third mega-deal in the payments industry since the beginning of 2019. This move is part of a recent trend by merchant acquirers to increase globalisation of their services in order to better compete in the omni-channel, e-commerce, and digital payment spaces.
Payments were previously driven primarily by cards, but globalisation in consumer payments (especially online) means alternative tools are seeing increased usage. Indeed, GlobalData’s Online Consumer Payments Analytics shows that since 2011, card-based online payments have been declining in terms of their share of online payments in favor of alternative tools, which exceeded a 50 percent share of the e-commerce market in 2018.
Payments Market Consolidation Driven by Need to Compete at Scale Globally
As a result of these changes, payment processors and acquirers need to support payment transactions wherever in the world they take place, using whatever payment tools the customer wants to use. In order to do that, many merchant acquirers and processors are entering into mergers that will allow them to offer truly end-to-end global payment acceptance services to their clients.