Payment processing growth is slowing, but structural opportunities remain in mobile wallets, network tokenization, and value-added services

Overview

This report centers on payment processing, merchant acquiring, card networks, digital wallets, BNPL, B2B payments, and Agentic Commerce, analyzing key excerpts from the 2026 edition of the Market Share Handbook. The core backdrop is that the payment processing sector underperformed in 2026; traditional U.S. PCE card penetration and payment volume growth have moderated, but the industry still has several structural growth levers.

Core views

The report's core view is: first, U.S. payment volume and transaction growth have already fallen back from the post-pandemic highs and are expected to remain at moderate levels from 2026E through 2027E; second, e-commerce continues to grow, but its premium over brick-and-mortar retail is narrowing, and the consumption device mix is shifting from desktop to smartphone; third, digital wallets, BNPL, network tokenization, network value-added services, B2B payment digitization, international market card penetration, and software distribution channels are important themes that can supplement growth; fourth, Agentic Commerce has long-term potential, but near-term adoption is constrained by consumer trust, merchant relationships, conversion rates, and price competition.

Analysis framework

The report combines sector index returns, historical growth rates for payment volume and transaction volume, online checkout surveys, payment-button availability among the Top 100 U.S. e-commerce merchants, device-side spending patterns, BNPL usage rates and transaction sizes, card-network value-added services revenue, the network tokenization penetration path, and Agentic Commerce adoption barriers to assess structural changes in the payment industry.

Methodology notes

• Industry growth decompositionHistorical trend comparison of payment volume and transaction volume

  Compare year-over-year growth in payment volume and transaction volume from 1990 to 2027E against recession and pandemic cycles to judge whether current growth is above or below historical trends.

  This framework shows that industry growth has come down from the post-pandemic highs, and 2025 to 2027E is closer to low- to high-single-digit growth.

• Consumer behavior analysisComparison between online checkout preferences and actual spending devices

  Compare consumers' preferred mobile checkout methods with the fact that actual U.S. web spending is still concentrated on desktop.

  This method is used to estimate the potential penetration room for mobile wallets and mobile-native payment methods.

• Product penetration analysisAvailability of payment methods among Top 100 U.S. e-commerce merchants

  Assess the distribution position and monetization opportunity of payment methods by observing BNPL, wallet, and other payment-button support on product pages, carts, and checkout pages at major e-commerce merchants.

  BNPL enjoys relatively high placement on product pages, and Klarna, Affirm, and Afterpay show competitive differentiation across merchants and mobile scenarios.

• Network economics analysisNetwork tokenization benefit framework

  Evaluate network tokenization from the perspectives of security, authorization rates, merchant costs, consumer experience, and card-network pricing opportunities.

  Tokenized transactions are said to have 3% to 6% higher authorization rates, some Visa transaction categories are 10 bps cheaper in interchange, and the long-term monetization opportunity for V/MA may expand.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Visa / Mastercard

  core beneficiaries of card networks and value-added services

  Strengths

  Network tokenization improves security, authorization rates, and potential pricing power, while VAS revenue growth adds a non-traditional fee stream.

  Weaknesses

  U.S. PCE card penetration and transaction growth are moderating, and larger scale naturally slows growth because of the base effect.

  Comparison

  Mastercard has a larger VAS base, while Visa's VAS growth has been faster over the past four years.

  Risks

  Regulation, merchant cost pressure, acceptance of tokenization fees, and a macro slowdown in consumer spending.

• Fiserv / GPN / Worldpay / J.P. Morgan / Chase

  key participants in merchant acquiring and processing share shifts

  Strengths

  Since 2010, FISV, J.P. Morgan, Worldpay, and GPN have all gained substantial transaction share.

  Weaknesses

  The processing segment underperformed in 2026, and growth is below historical levels.

  Comparison

  The dissolution of BAMS has redistributed market share among BAC, FISV, Chase, and other institutions.

  Risks

  Price competition, integration complexity, and competition from bank-led and technology-led acquiring models.

• PayPal / Apple Pay / Cash App Pay

  representatives of digital wallets and consumer-trust use cases

  Strengths

  PayPal benefits from familiarity, and Apple Pay benefits from convenience and speed; wallets may serve as trust intermediaries in Agentic Commerce.

  Weaknesses

  A large share of online spending still occurs on desktop, so mobile-wallet penetration still takes time.

  Comparison

  PayPal has a higher funding preference in agent transactions than in standard e-commerce scenarios.

  Risks

  Browser and merchant distribution placement, platform rule changes, and insufficient consumer trust in LLM agents handling sensitive payment information.

• Klarna / Affirm / Afterpay

  major competitors in BNPL growth and payment-button placement

  Strengths

  BNPL overall is growing at more than 20%, with high visibility on product pages; Klarna leads globally, while Affirm stands out in the U.S. for scale and growth.

  Weaknesses

  BNPL still accounts for only a small part of U.S. e-commerce and credit transactions.

  Comparison

  Klarna has broader coverage among Top 100 merchants, while Affirm has a stronger share among Top 10 merchants.

  Risks

  Credit-cycle risk, regulation, funding costs, and changes in merchant subsidy willingness.

• FLYW / TOST / LSPD / XYZ / FISV / GPN

  software distribution, vertical payments, and embedded-finance-related names

  Strengths

  Transaction share is shifting toward software distribution, and bank customer bases can drive ARPU expansion.

  Weaknesses

  The monetization capability of vertical software and embedded finance depends on industry penetration, customer quality, and upsell success.

  Comparison

  Growth premiums in technology-enabled models are more concentrated than in traditional bank acquiring.

  Risks

  Valuation, industry competition, customer acquisition costs, and macro pressure on small and mid-sized merchants.

Key data

• Global e-commerce growth premium over brick-and-mortar retailabout 4 percentage pointsThe growth premium slowed in 2025 and is expected to remain around 4 percentage points.
• U.S. smartphone share of web spending39% in 2025It was 22% in 2019 and rose to 39% in 2025; desktop still accounts for 56%.
• U.S. desktop share of web spending56% in 2025Although more than two-thirds of Americans prefer to complete online transactions on smartphones, more than 55% of actual spending still happens on desktop.
• Klarna coverage among Top 100 U.S. e-commerce merchants>25% of merchantsKlarna is one of the BNPL providers with the broadest coverage.
• Affirm coverage among Top 100 U.S. e-commerce merchantsabout 15% of merchantsAffirm has a higher share among Top 10 merchants.
• Preference for saved credentials or autofill checkout75% to 81%, average 80%Across first-time visits, frequently used websites, and retailer mobile apps, respondents tend to use some form of autofill or saved credentials.
• Guest checkout preference30% to 39%, average 34%Guest checkout is less preferred than using saved credentials.
• Global card penetration gapabout 15 percentage points below the U.S.The report believes non-U.S. markets still have significant long-term card penetration opportunity.
• Visa VAS growth advantage vs. Mastercardabout 4 percentage points fasterOver the past four years, Visa VAS grew at low-20% rates, while Mastercard grew at high-teens rates.
• V/MA tokenized transaction growthabout 30% YoY growthThe report believes tokenized transactions still have a path toward roughly 70% of transaction share.
• Network tokenization authorization uplift3% to 6%Higher authorization rates can generate more revenue for merchants, PSPs, and issuers.
• Agentic Commerce awareness50% of respondents are unfamiliarOnly about 30% of respondents are at least somewhat open to having an agent buy on their behalf.
• Agentic Commerce payment funding preference36% would like to use PayPalCompared with a 20% PayPal preference in standard e-commerce scenarios, wallet trust matters more in agent transactions.
• 2025 U.S. BNPL sizeabout $108BThis is about 9% of U.S. e-commerce, up about 1 percentage point YoY.
• Global top four BNPL provider sizeabout $250B, +24% YoYKlarna remains the largest globally, while Affirm is the fastest-growing and the largest in the U.S.

Impact & implications

For investment implications, traditional processing and acquiring businesses face slower U.S. growth, intensified competition, and fee pressure, but card networks, wallets, BNPL, B2B payments, software platforms, and payment companies with value-added service capabilities can still capture growth through structural penetration. Visa and Mastercard's value-added services and tokenization opportunities stand out; PayPal and other wallets may benefit in Agentic Commerce settings because of their trust attributes; BNPL remains a high-growth segment, but its scale is still small relative to the U.S. e-commerce and credit-card markets.

Risks

• U.S. payment volume and transaction growth may continue to trail historical trends.
• The e-commerce growth premium over brick-and-mortar retail is narrowing, weakening the high-growth narrative for online payments.
• Agentic Commerce lacks consumer awareness and trust in the near term, and merchants also worry that agent-driven flows could weaken brand relationships.
• If agents optimize prices for consumers, merchant margins may come under pressure.
• BNPL faces credit risk, regulatory risk, and funding cost pressure.
• Pricing opportunities in network tokenization and value-added services may be constrained by merchant, regulatory, or competitive pressure.
• Consolidation in acquiring and processing could create execution risk, and large-scale new integration opportunities are limited.

What to watch

• Whether U.S. payment volume and transaction volume can stabilize or reaccelerate in 2026 to 2027.
• Whether smartphone share of U.S. web spending continues to rise and whether mobile wallets further replace card-on-file.
• Changes in payment-button availability and placement for Apple Pay, PayPal, Klarna, Affirm, and Afterpay among the Top 100 U.S. e-commerce merchants.
• Visa and Mastercard network-tokenized transaction share, VAS revenue growth, and related pricing strategies.
• Progress in Agentic Commerce from a discovery tool to a real transaction loop, especially consumer trust, merchant integration, and checkout conversion rates.
• BNPL penetration in U.S. e-commerce, global origination size, and share shifts among leading providers.
• The pace at which long-term card-penetration opportunities are realized in LATAM, Europe, and APAC.