Fintech-as-a-Service Market Share

North America Market Insights

The North America market is predicted to maintain a leading revenue share of 40.4% during the forecast period, attributed to the mature digital payment ecosystem. The supportive regulatory ecosystem in North America, such as the CFPB guidance, the open finance initiatives in Canada, and the U.S. sandbox environments, supports faster product deployment. Moreover, the ongoing investments in AI and blockchain have supported continued growth in revenue, expanding the scope of improvements in FaaS platforms, which is slated to improve end user experience.

The U.S. FaaS market has emerged as the epicenter of fintech innovations. The market landscape of the U.S. is supported by the rising adoption of digital payments and BaaS models. Major players in the U.S. market are PayPal and Stripe, which are striving to expand the scope of their FaaS offerings. The push by the major market players has ensured a dynamic market that has faster product cycles and a growing integration into enterprise workflows. The trends have laid the groundwork for innovations in next-generation FaaS.

Asia Pacific Market Insights

The APAC FaaS market is expanding at a CAGR of 21.5% during the anticipated timeline, registering the fastest expansion rate. The rising growth is supported by the national-scale investments in digital payments infrastructure, and a rise in open-banking initiatives in economies such as China, India, Indonesia, etc. The expansion is supported by mobile payment volumes predicted to exceed USD 39 trillion by the end of 2037 in established markets like China. Additionally, a key aspect of APAC has been the considerably high penetration of smartphones, creating opportunities for investors to target regional scale-ups addressing SME credit infrastructure.

The India market is poised to remain one of the most lucrative regional markets globally. The government has supported nationwide digitalization of payment infrastructure, leading to large-scale popularity of Google Pay, PayTm, PhonePe, etc. Additionally, the National Payments Corporation of India (NPCI) has reported a rapid increase in UPI volumes over the years. In another aspect of the supportive regulatory ecosystem, the Reserve Bank of India has supported the push to improve the fintech cloud infrastructure in tier 1 cities in a bid to improve local hosting. With a significantly large base of end users and the B2B demand for FaaS platforms intensifying, the India market is estimated to expand its revenue share by the end of 2037.

APAC Spending Trends

Europe Market Insights

The Europe FaaS market is supported by the growth of open banking under the PSD2 and PSD3 directives. The market is further supported by the steady funding to improve digital infrastructure. For instance, the €1.2 billion Digital Finance Package has been vital in contributing to the increase in FaaS adoption. Additionally, markets such as Germany, France, the Netherlands, etc., are leading in FaaS deployments, especially in cross-border fund transfers. An emerging trend in Europe has been the rising popularity of ESG-linked fintech solutions among Gen-Z consumers.

The Germany market is poised to expand at a fast pace during the forecast timeline, supported by the rise in FaaS infrastructure deployments by neobanks and challenger banks. The increasing deployment is supported by the Digital Now initiative. Additionally, the German Banking Industry Committee (GBIC) has been instrumental in standardizing PSD2-compliant APIs, that has reduced integration timelines for FaaS providers. With SME adoption expected to rise in the coming years, the market is poised to maintain growth by the end of 2037.

Europe Spending Trends