Regulation & Compliance
December 11, 2024
BPC, a global leader in payment solutions, has released a comprehensive report in collaboration with Arkwright Consulting, detailing the evolution of the card processing market, the ecosystem involved in facilitating and managing card-based transactions, such as credit, debit, and prepaid card payments
“Next-Generation Card Processing” highlights the trends reshaping the card processing industry and the rapid rise of challenger processors. The report analyses past and present market trends, emerging technologies driving growth in the industry, and the growing market share of challenger processors.
According to the report, new card processing models are gaining significant momentum, driven by technological innovation and the growing influence of non-bank entities like retailers and gig economy platforms.
A sample of 10 challenger processors showed growth rates four times higher than the overall card processing market, thanks to an API-first, cloud-native approach to payments infrastructure. Between 2021 and 2024, challengers secured 127 new client contracts, compared to just 26 secured by incumbents.
This remarkable growth is also reflected in processing volumes, with challengers achieving a compound annual growth rate (CAGR) of 35%, while market share expanded from 2.6% in 2021 to 4.0% by 2024. These results emphasise the growing importance of non-bank entities seeking card processing services, including retailers, gig platforms, and fintechs that need agility and scalability not offered by incumbent processors.
A primary driver of growth for challenger processors is their ability to offer highly scalable, flexible, and technologically advanced platforms. The report highlights that new entrants to the market are embracing cloud-native technologies that provide seamless integration, faster updates, and enhanced security measures. This enables the challengers to meet the needs of a diverse range of customers, from scaling fintechs to established financial institutions.
Additionally, it is highlighted that challengers are leveraging innovative technologies to serve non-traditional banking customers, such as retailers, gig ticketing platforms, and fintech companies, which are seeking processing services that are adaptable, quick to market and customisable in an ever-changing payments landscape.
There has been a significant shift in the card processing industry, transitioning away from legacy bank-centred models to cloud-native infrastructure that is flexible, scalable and efficient. As challenger processors dominate new client acquisitions and increase their market share, they are reshaping the card processing industry. Their ability to provide seamless integrations and highly customisable payments products enables innovation in financial services, empowering banks, fintechs and other non-bank entities to quickly launch new products to customers.
The card processing industry is at the forefront of the growing payments landscape. Those that invest in innovative technologies, customer-centric services and modernized infrastructure are best positioned to make their mark and establish themselves as a major player. Next-Generation Card Processing highlights that the expansion of the market share for challenger processors is likely to continue, combining open APIs, regulatory enablement and advanced technical features to deliver a compelling proposition to banks and non-bank entities.
Commenting on the report, BPC’s SVP of Sales Europe, Peter Theunis, said: “At BPC, we are always looking forward, aiming to help financial institutions, fintechs, and SMEs to drive innovation through our next-generation platform. We recognise the importance of shifting towards cloud-native payments infrastructures and API-first integrations, enabling banks and non-bank entities to quickly launch new products across a wide range. By focusing on providing a future-proven platform and services, we aim to foster innovation and deliver exceptional digital experiences to our customers. The rapid growth of challenger processors demonstrates that banks and fintechs value flexibility, scalability and technical innovation above all else when selecting their card processing partner.”
The Payments Association
St Clement’s House
27 Clements Lane
London EC4N 7AE
© Copyright 2024 The Payments Association. All Rights Reserved. The Payments Association is the trading name of Emerging Payments Ventures Limited.
Emerging Ventures Limited t/a The Payments Association; Registered in England and Wales, Company Number 06672728; VAT no. 938829859; Registered office address St. Clement’s House, 27 Clements Lane, London, England, EC4N 7AE.
Log in to access complimentary passes or discounts and access exclusive content as part of your membership. An auto-login link will be sent directly to your email.
We use an auto-login link to ensure optimum security for your members hub. Simply enter your professional work e-mail address into the input area and you’ll receive a link to directly access your account.
Instead of using passwords, we e-mail you a link to log in to the site. This allows us to automatically verify you and apply member benefits based on your e-mail domain name.
Please click the button below which relates to the issue you’re having.
Sometimes our e-mails end up in spam. Make sure to check your spam folder for e-mails from The Payments Association
Most modern e-mail clients now separate e-mails into different tabs. For example, Outlook has an “Other” tab, and Gmail has tabs for different types of e-mails, such as promotional.
For security reasons the link will expire after 60 minutes. Try submitting the login form again and wait a few seconds for the e-mail to arrive.
The link will only work one time – once it’s been clicked, the link won’t log you in again. Instead, you’ll need to go back to the login screen and generate a new link.
Make sure you’re clicking the link on the most recent e-mail that’s been sent to you. We recommend deleting the e-mail once you’ve clicked the link.
Some security systems will automatically click on links in e-mails to check for phishing, malware, viruses and other malicious threats. If these have been clicked, it won’t work when you try to click on the link.
For security reasons, e-mail address changes can only be complete by your Member Engagement Manager. Please contact the team directly for further help.
