Fintech as a Service (FaaS) Market Size, Share, Trends, Industry Analysis Report: By Type (Payment, Fund Transfer, Loan, and Others), Technology, Application, End-Use, and Region (North America, Europe, Asia Pacific, Latin America, and Middle East & Africa) – Market Forecast (2024–2032)
- Published Date:Oct-2024
- Pages: 118
- Format: PDF
- Report ID: PM5113
- Base Year: 2023
- Historical Data: 2019-2022
Fintech as a Service (FaaS) Market Overview
The fintech as a service market size was valued at USD 312.77 billion in 2023. The industry is projected to grow from USD 367.06 billion in 2024 to USD 1,329.12 billion by 2032, exhibiting a CAGR of 17.4% during 2024–2032.
Fintech as a service (FaaS) allows companies to integrate financial services such as payments and banking into their offerings using ready-made fintech infrastructure. Rising demand for digital financial solutions is driving demand for fintech services. Businesses are increasingly looking to offer integrated financial services such as payments, loans, and digital wallets to enhance customer experience, thus driving the market growth. In addition, the continuous improvement in cybersecurity and fraud prevention mechanisms on FaaS platforms enhances trust and dependability, thereby attracting businesses to embrace these solutions. This, in turn, propels the growth of the FaaS market.
-market.png)
To Understand More About this Research: Request a Free Sample Report
Partnerships between fintech firms and traditional financial institutions are catalyzing the fintech as a service market growth. Increasingly, traditional banks and financial institutions are collaborating with FaaS providers to seamlessly integrate digital financial services into their offerings. This allows for expedited market entry and augmentation of technological capabilities, thereby propelling market expansion. Moreover, the growing innovation and interest in cryptocurrencies drive demand for FaaS solutions that facilitate secure and efficient trading and management of digital assets.
Fintech as a Service (FaaS) Market Trends
Increasing Adoption of E-Commerce
The e-commerce sector is witnessing rapid expansion across the world owing the growing usage of smartphones, and increasing adoption of 5G technology, among others. For instance, according to IBEF, the Indian e-commerce market is projected to reach a valuation of USD 350 billion by 2030. It demonstrated a robust growth trajectory in 2022, achieving a notable 21.5% increase to reach USD 74.8 billion. Owing to the increasing dominance of online shopping, businesses face challenges in seamlessly integrating efficient and secure payment solutions into their platforms. FaaS presents a viable solution by delivering comprehensive financial infrastructure and tools that are easily incorporated into e-commerce systems. These solutions enable retailers to streamline payment processing, boost transaction security, and enhance overall customer experience. Therefore, the rising adoption of e-commerce is expected to propel the growth of the fintech as a service (FaaS) market during the forecast period.
Rising Innovations in Fintech Technology
The evolution of fintech technology, particularly blockchain and artificial intelligence (AI), is playing a pivotal role in propelling the growth and complexity of fintech as a service (FaaS) offering. Blockchain technology is enhancing the security, transparency, and efficiency of financial transactions through features such as secure payment processing, smart contracts, and tamper-proof records. These advancements are instrumental in mitigating fraud, ensuring regulatory adherence, and optimizing operations, thereby catalyzing the broader acceptance and expansion of FaaS solutions. Furthermore, AI is revolutionizing FaaS by introducing advanced capabilities such as predictive analytics, personalized financial services, and automated customer support. AI-driven solutions are augmenting decision-making processes, enhancing user experiences, and streamlining operational efficiencies. The synergistic integration of blockchain and AI technologies would drive the development of more sophisticated and customized FaaS offerings, which is projected to attract a diverse customer base. Owing to all these benefits, the fintech as a service (FaaS) market is expected to witness robust growth in the future.
-market-infographic.png)
Fintech as a Service (FaaS) Market Segment Insights
Fintech as a Service Market Breakdown by Type Insights
The global FaaS market segmentation, based on type, includes payment, fund transfer, loan, and others. In 2023, the payment segment accounted for the largest market share due to its critical role in facilitating secure, efficient, and seamless financial transactions. The growing adoption of digital payment solutions and the increasing demand for real-time payment processing have driven significant investment and development in this segment. For instance, in August 2023, according to IBEF, India established itself as a prominent force in the realm of digital payments, commanding 46% of global real-time transactions in 2022. In the same year, the country recorded 89.5 million digital transactions, with close to 40% of the overall payment value being digital. This significant digital payment volume contributed to a USD 3 trillion digital payment market.
Fintech as a Service (FaaS) Market Breakdown by Application Insights
The global fintech as a service market segmentation, based on application, includes KYC verification, fraud monitoring, compliance & regulatory support, and others. The KYC verification segment is expected to experience rapid growth during the forecast period due to increasing regulatory demands an9999999d the rising need for enhanced security measures in financial transactions. The governments and financial institutions worldwide have established stringent regulations to combat fraud, money laundering, and terrorist financing, propelling the need for robust KYC processes. This is particularly critical in sectors such as banking, fintech, and securities, where verifying customer identities and ensuring compliance are paramount. For instance, in May 2024, according to the CDSL, in the fiscal year 2023–2024, more than 32.6 million new demat accounts were opened, with a record 10.9 million accounts registered in Q4 alone. This surge in account openings reflects the growing investor base, with each registration requiring mandatory know your customer (KYC) verifications, ensuring compliance with regulatory standards and reinforcing the integrity of the financial ecosystem. Thus, the KYC verification segment is expected to be the fastest-growing market segment during the forecast period.
-market-segment.png)
Regional Insights
By region, the study provides market insights into North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa. North America accounted for the largest share of the global fintech as a service market in 2023 due to the region's advanced technological infrastructure and widespread adoption of digital financial solutions that boost the strong demand for FaaS offerings. North America's mature financial sector, combined with its robust regulatory frameworks, has created an environment conducive to innovation and the rapid deployment of fintech services. Additionally, the presence of major financial institutions, fintech startups, and technology companies has driven collaborations and the development of sophisticated FaaS solutions. The high penetration of digital payment systems, along with increasing investments in emerging technologies such as blockchain and AI, further contributed to the region’s dominance in the fintech as a service (FaaS) market.
The US held a larger share in the fintech as a service market in North America in 2023 due to the country’s highly developed financial ecosystem, combined with a strong culture of innovation, which has driven significant adoption of fintech solutions across various sectors.
-market-region.png)
The Asia Pacific fintech as a service (FaaS) market is expected to record the highest CAGR during the forecast period due to the rapid digitalization across the region, particularly in emerging markets such as India, China, and Southeast Asia, that has significantly increased the demand for fintech solutions. The widespread adoption of smartphones and internet access, coupled with a growing preference for digital payments and financial services, is fueling the growth of the market. Additionally, supportive government initiatives and regulatory frameworks aimed at fostering financial inclusion and digital banking are accelerating the adoption of FaaS. The region’s thriving fintech ecosystem, marked by the emergence of innovative startups and collaborations with traditional financial institutions, further boosts market expansion.
The India fintech as a service (FaaS) market is expected to grow significantly during the forecast period due to rising government initiatives, such as the promotion of digital payments through the unified payments interface (UPI) and financial inclusion programs such as Jan Dhan Yojana, are further accelerating fintech as a service (FaaS) market.
Fintech as a Service (FaaS) Market – Key Players and Competitive Insights
The competitive landscape of the fintech as a service market is marked by a dynamic interplay between established financial institutions, technology giants, and emerging fintech startups. Leading players such as Stripe, Square, and Adyen are at the forefront, offering comprehensive platforms that provide a range of financial services, including payment processing, lending, and fraud detection. These companies leverage their extensive experience and advanced technologies to deliver scalable and flexible solutions tailored to diverse business needs. Additionally, major technology firms such as Microsoft and Amazon are entering the FaaS market, providing cloud-based financial services that integrate seamlessly with other enterprise solutions. The market is also witnessing significant innovation from fintech startups that are disrupting traditional models with niche solutions, such as blockchain-based payments and AI-driven financial analytics. Strategic partnerships, mergers, and acquisitions are prevalent as companies seek to expand their service offerings and enter new markets. Block, Inc.; Braintree; Envestnet, Inc.; Mastercard Incorporated; PayPal Holdings, Inc.; Railsbank Technology Ltd.; Rapyd Financial Network Ltd.; Solid Financial Technologies, Inc.; Synctera Inc., and Upstart Holdings, Inc. are among the major players.
PayPal Holdings, Inc. operates a technology platform enabling digital payments for merchants and consumers worldwide. The company facilitates fund transfers; online and in-person transactions; and withdrawals using various funding sources, including bank accounts, Venmo account balances, credit products, debit cards, and cryptocurrencies. In August 2024, PayPal Holdings, Inc. partnered with Adyen, a global financial technology platform for businesses. Adyen will be integrating Fastlane by PayPal to streamline guest checkout processes for its enterprise and marketplace clients in the US.
Mastercard Incorporated is a technology company specializing in global transaction processing and a wide range of payment solutions. The company offers products and services, including deferred payment credits, fund access solutions, prepaid program services, and various payment products, for account holders, merchants, financial institutions, digital partners, businesses, and government entities. In June 2024, Mastercard launched its new 'Mastercard for Fintechs' initiative aimed at providing comprehensive support to fintech companies in Western Europe. The program is specifically tailored to empower these firms with the necessary tools and industry knowledge to facilitate sustained expansion and enable them to reach new heights of success.
Key Companies in Fintech as a Service (FaaS) Market
- Block, Inc.
- Braintree.
- Envestnet, Inc.
- Mastercard Incorporated
- PayPal Holdings, Inc.
- Railsbank Technology Ltd.
- Rapyd Financial Network Ltd.
- Solid Financial Technologies, Inc.
- Synctera Inc.
- Upstart Holdings, Inc.
Fintech as a Service (FaaS) Industry Developments
In September 2024, Rapyd expanded its Payment Partner Programme to boost revenue growth and collaboration for partners in high-opportunity industries such as eCommerce, online gaming, content creator economy, and financial services.
In May 2024, Mastercard selected seven high-growth startups for its Start Path In Solidarity program, aiming to accelerate fintech growth by providing financial tools and a global network for equitable opportunities. The startups operate in various sectors such as AI, healthcare, and sustainability and are focused on driving fintech innovation.
In October 2023, Envestnet launched an Embedded Investing Solution to assist financial institutions in catering to the increasing need for banking applications that encompass various aspects of a customer's financial situation.
Fintech as a Service (FaaS) Market Segmentation
By Type Outlook (Revenue – USD billion, 2019–2032)
- Payment
- Fund Transfer
- Loan
- Others
By Technology Outlook (Revenue – USD billion, 2019–2032)
- API
- Artificial Intelligence
- RPA
- Blockchain
- Others
By Application Outlook (Revenue – USD billion, 2019–2032)
- KYC Verification
- Fraud Monitoring
- Compliance & Regulatory Support
- Others
By End-Use Outlook (Revenue – USD billion, 2019–2032)
- Banks
- Financial Lending Companies
- Insurance
- Others
By Regional Outlook (Revenue – USD billion, 2019–2032)
- North America
- US
- Canada
- Europe
- Germany
- France
- UK
- Italy
- Spain
- Netherlands
- Russia
- Rest of Europe
- Asia Pacific
- China
- Japan
- India
- Malaysia
- South Korea
- Indonesia
- Australia
- Vietnam
- Rest of Asia Pacific
- Middle East & Africa
- Saudi Arabia
- UAE
- Israel
- South Africa
- Rest of Middle East & Africa
- Latin America
- Mexico
- Brazil
- Argentina
- Rest of Latin America
Fintech as a Service (FaaS) Report Scope
|
Report Attributes |
Details |
|
Market Size Value in 2023 |
USD 312.77 billion |
|
Market Size Value in 2024 |
USD 367.06 billion |
|
Revenue Forecast by 2032 |
USD 1,329.12 billion |
|
CAGR |
17.4% from 2024 to 2032 |
|
Base Year |
2023 |
|
Historical Data |
2019–2022 |
|
Forecast Period |
2024–2032 |
|
Quantitative Units |
Revenue in USD billion and CAGR from 2024 to 2032 |
|
Report Coverage |
Revenue Forecast, Market Competitive Landscape, Growth Factors, and Trends |
|
Segments Covered |
|
|
Regional Scope |
|
|
Competitive Landscape |
|
|
Report Format |
|
|
Customization |
Report customization as per your requirements with respect to countries, regions, and segmentation. |
FAQ's
The global fintech as a service market size was valued at USD 312.77 billion in 2023 and is projected to grow to USD 1,329.12 billion by 2032.
The global market is projected to register a CAGR of 17.4% during the forecast period
North America accounted for the largest share of the global market due to advanced technological infrastructure across the region and widespread adoption of digital financial solutions that have fostered a strong demand for FaaS offerings.
A few key players in the market are Block, Inc.; Braintree, Envestnet, Inc.; Mastercard Incorporated; PayPal Holdings, Inc.; Railsbank Technology Ltd.; Rapyd Financial Network Ltd.; Solid Financial Technologies, Inc.; Synctera Inc.; and Upstart Holdings, Inc.
The payment segment dominated the market in 2023 due to its critical role in facilitating secure, efficient, and seamless financial transactions.
The KYC verification segment accounted for the largest share due to increasing regulatory demands and the rising need for enhanced security measures in financial transactions.
© 2024 Polaris Market Research and Consulting. All rights reserved
