Payments : A bright present and future

Interest in the payments sector (BNPL, B2B, Real-time) drives a strong M&A deal market

James Brannan

James Brannan

Advisory Managing Director, Financial Due Diligence, KPMG US

+1 212-954-1987

Jack Whitt

Jack Whitt

Principal, Advisory Strategy, KPMG US

+1 703-286-8807

Bob Ruark

Bob Ruark

Principal, Banking & Fintech Strategy Leader, KPMG US

+1 704-371-5271

Global M&A in the payments subsector surged in the first quarter versus the fourth quarter of 2021. Through February, the first-quarter deal value rose 40 percent to $8.3 billion, as volume increased 13 percent1. Financings by venture capital and private equity firms accounted for most of the transactions.

We attribute the strength in first-quarter activity to the same forces that should continue to drive payments M&A going forward:

  • Record-high and fast-growing acceptance of electronic forms of payment
  • The pressing need to update outdated technologies
  • Traditional payments providers search for diversification and new sources of growth
  • Significant dry powder and interest from both strategic and financial buyers
  • Ongoing demand for consumer-friendly electronic products and services

These are the major trends that we expect to drive deal-making in payments in the coming quarters:

Buy now, pay later:

Buy now, pay later (BNPL) is one of the hottest payments categories. Valued at $90.7 billion in 2020, the global BNPL market is projected to reach $4.0 trillion in 2030—a sizzling 45.7 percent annualized growth rate2. The BNPL model is a hit with consumers because of its convenience: They can spread purchase costs over multiple installment payments with no interest charge on their bills. Merchants like it because they get full payment upfront, higher average transaction value3, repeat purchases, and access to a larger customer base.

In 2021, Square agreed to pay $29 billion to acquire Australian BNPL leader Afterpay, a strong endorsement of the BNPL trend4. We expect more deals as other traditional payments providers move into BNPL and existing BNPL players look to build scale and market share.


The business-to-business market offers potentially significant upside. The global value of B2B services was $868.0 million in 2020 and is forecast to grow 10.7  percent annually to around $70.0 billion in 2030.7 While North America accounts for the biggest B2B payments market—41.2 percent of global transaction volume—it lags other regions in terms of B2B payments innovation. This is primarily because US companies remain heavily dependent on paper check payments. We believe this will change with the integration of digital payments into corporate payables and receivables systems, which will help to move the US away from paper.

Real-time payments:

Electronic real-time payments (RTP) platforms send money instantly between bank accounts. Analysts valued the global RTP market at $13.6 billion in 20215 and forecast it to grow at a 35 percent annualized rate to $193.1 billion in 2030.

Most RTP payments in the US currently are in the business-to-business market, where companies use the technology to cut dependence on paper checks and digitalize their accounts payable and receivable functions. The only true provider for individuals is Zelle, a situation that should change as more banks begin to process transactions on the RTP infrastructure owned by The Clearing House Payments Company and, likely in 2023, the Federal Reserve.

We expect the RTP market (whether B2B, B2C, or C2B) to enjoy vibrant growth in M&A activity, in line with the increasing number of financial institutions connecting to the infrastructure. The top beneficiaries of deal-making should be companies that already have big payments businesses— think banks and credit card companies— and can take advantage of their scale, relationships with merchants, and geographic reach to grow in RTP.


  1. Source: Payments industry deals total $6.3bn globally in February 2022,”, March 31, 2022.
  2. Source: Buy Now Pay Later Market: Global Opportunity Analysis and Industry Forecast, 2021-2030, Allied Market Research, July 2021
  3. Source: Square changed its name to Block in December 2021.
  4. Source: B2B Payments Transaction Market Size, Precedence Research, September 2021
  5. Source: Real-Time Payments Market Share Report 2022-2030, Grand View Research, January 2022.