A recently published study by Fact.MR expects the global Fintech-as-a-Service market to augment at a 17% CAGR from 2022 to 2032. By the end of the said assessment period, a valuation of US$ 1,300 Billion is expected for the market. With the incidence emphasis on cashless transactions rising exponentially, the market for Fintech-as-a-Service platforms is expected to rise impressively.
From 2017 to 2021, the industry experienced noteworthy growth, registering a value CAGR of 17% and closing at US$ 269.2 Billion. Demand for AI-based technology for the development of FaaS platforms has especially spiked in the past few years, given the increasing adoption of innovative technologies by tech giants. This transition was further expedited when the COVID-19 pandemic struck since people were looking out for a no-contact transaction.
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The notion of a digital economy is prospective to prevail in the coming years. Besides, financial institutions are focusing on developing a secured FaaS platform to offer enhanced protection and value-added functions to their, products. Prominent players are making hefty investments that are prospective to establish an advanced fintech infrastructure.
Key Segments Covered in the Fintech-as-a-Service Industry Analysis
- By Type :
- Fintech-as-a-Service for Payment
- Fintech-as-a-Service for Funds Transfer
- Fintech-as-a-Service for Loans
- Fintech-as-a-Service for Other Types
- By Technology :
- API-based Fintech-as-a-Service
- Artificial Intelligence-based Fintech-as-a-Service
- RPA-based Fintech-as-a-Service
- Blockchain-based Fintech-as-a-Service
- Other Technology based Fintech-as-a-Service
- By Application :
- KYC Verification
- Fraud Monitoring
- Compliance & Regulatory Support
- Other Applications
- By End Use :
- Financial Lending Companies
- Other End Uses
- By Region :
- North America
- Latin America
- Asia Pacific
- Middle East & Africa
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Key Takeaways from the Market Study
- Fintech-as-a-Service market growth to rise nearly 5x until 2032.
- By Application, Compliance & Regulatory Support segment of Fintech-as-a-Service to flourish at a 16.2% CAGR
- Financial Lending Institutions to be the top end-use area for Fintech-as-a-Service, growing at over 16.6% CAGR
- North America to emerge as the fastest growing market, expected to flourish at a 16.6% CAGR
Competitive Landscape: What are the Leading Players in the Fintech-as-a-Service Market Up to?
New product launches, innovation, geographical expansion, and mergers & acquisitions are some of the key strategies adopted by the players to strengthen their position in the market and gain a higher market share.
- PayPal Holdings, Inc. agreed to buy Paidy, a prominent two-sided payments platform and supplier of buy now, pay later solutions in Japan, for 300 billion yen (about US$2.7 billion) in cash in September 2021. PayPal’s capabilities, distribution, and importance in Japan’s domestic payments sector will be expanded as a result of the purchase.
- Mastercard Incorporated agreed to buy Aiia, a major European open banking technology provider that offers a direct link to create and deploy innovative digital products that suit the demands of everyday living, work, and play, in October 2021.
- Square, Inc. and Afterpay Limited entered into a plan Implementing Deed in August 2021, under which Square committed to purchase all of the outstanding shares of Afterpay through a proposed court-approved Scheme of Arrangement.
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Will North America Hold a Significant Position in the Global Fintech-as-a-Service Market?
Regarding market revenue. North America will control roughly 35% of the fintech-as-a-service (FaaS) industry in 2022. According to the Fact.MR analysis, the area is expected to retain its supremacy during the projection period. This market expansion might be ascribed to North America’s increased desire for digital financial services.
According to the most recent MasterCard Contactless Consumer Polling, 51% of U.S. consumers utilise some form of contactless payment method. Consumer preferences for digital payment methods and fintech services are driving industry expansion. According to Visa, roughly one out of every ten Visa card transactions in the United States are completed at the point-of-sale (POS), with the majority using a contactless card.