How Payment Providers Can Increase Profits

In 2023, the global payments industry generated $2.4 trillion in revenue. By 2024, that figure had already grown to $2.5 trillion, and McKinsey forecasts the industry will reach $3.1 trillion by 2028. However, revenue growth is decelerating , from 7% annually between 2018 and 2023 to a projected 5% through 2028 , making it increasingly important for payment service providers to diversify beyond traditional transaction fees. Growing competition distracts payment service providers from meeting consumer needs. And as more consumers embrace digital payments, businesses embracing cutting-edge tech have more opportunities to stand out. In this guide, we'll explore actionable strategies to help payment providers, especially those dealing with cryptocurrencies and digital assets, increase profits.

Understanding the Growing Trends in Payments

To stay ahead of the curve, payment providers should watch the trends shaping the future of payments. Here are some of the biggest developments transforming the payment space:

Digital Wallets

Digital wallets have become increasingly popular because of their convenience and security. By mid-2025, the number of global digital wallet users surpassed 4.5 billion , representing over half the world's population , and the global total value of digital wallet transactions reached $10 trillion in 2024. Worldpay projects digital wallets will account for more than $25 trillion in global transaction value by 2027, representing 49% of all online and point-of-sale sales combined.

Digital wallets generate revenue through multiple channels: interchange fees on card-linked transactions, FX conversion margins when users transact in foreign currencies, subscription fees for premium tiers, and merchant transaction processing fees. The global digital wallet market was valued at $47.5 billion in 2024 and is growing at a 19.8% CAGR, projected to reach $119 billion by 2029. For PSPs seeking to understand how digital wallets make money , and how to tap those revenue streams , white-label wallet infrastructure is the most direct path to capturing a share of this market without building from scratch.

Further Reading: White-Label Digital Asset Infrastructure

Unlike physical cards, digital cards are more secure because none of your account information or actual card numbers are stored within the digital wallet. In the event someone steals a credit card, it's quite easy for them to use it. A digital wallet, on the other hand, has several added layers of security: facial recognition, fingerprint scan, or password protection. Digital wallets are also easier to replace or lock if compromised.

Integration of Blockchain Technology and Cryptocurrencies

If you want to enhance your digital asset infrastructure, blockchain and cryptocurrencies are definitely worth considering. Although blockchain and cryptocurrency are often used interchangeably, they are distinct concepts. Blockchain is an extensive distributed database that records all transactions in real time. This technology makes transactions secure and easily traceable. Cryptocurrency is a digital asset that relies on the aforementioned technology. Crypto has made payments faster, cheaper, and more transparent by eliminating middlemen like banks.

The stablecoin segment is accelerating this shift at a remarkable pace. According to McKinsey (2026), total verified stablecoin payment volume reached approximately $390 billion in 2025 , more than double 2024 levels, with B2B payments accounting for roughly 60% of that volume and surging 733% year-over-year. Stablecoin supply itself expanded from under $10 billion five years ago to over $300 billion today, with approximately 10 million blockchain addresses making a stablecoin transaction every day. For PSPs and payment providers, this represents a concrete, quantifiable opportunity: not a speculative bet, but a rapidly maturing infrastructure layer.

Increased Focus on Security and Fraud Prevention

A report by Alloy revealed that, in 2024, around 25% of financial organizations reported fraud losses totaling $1 million. Meanwhile, consumers experienced over $10 billion in fraud-related losses. These numbers highlight the need to focus on innovative tech solutions that protect consumers and businesses. With more online transactions than ever before, traditional security measures like passwords no longer suffice. That's where advanced tech like biometric authentication steps in. Using facial recognition, fingerprints, or even voice recognition adds an extra layer of protection. However, security doesn't stop there. PSPs are also adopting real-time monitoring systems to detect suspicious activity immediately and mitigate threats before they escalate.

Leading digital payment platforms now deploy a multi-layer security architecture that extends well beyond biometrics: device fingerprinting, payment credential tokenization, behavioral analytics that flag anomalous spending patterns in real time, end-to-end encryption, and multi-factor authentication (MFA). McKinsey projects global payment card fraud losses will reach $400 billion over the next decade, reinforcing why a robust, adaptive security stack is not just a compliance requirement, but a direct revenue-protection measure and a competitive differentiator when pitching to enterprise merchants and financial institutions.

Use of AI and Machine Learning

AI and machine learning are also revolutionizing payment systems. First, they're enhancing fraud detection by analyzing transaction patterns in real time. Machine learning algorithms can learn and adapt, continuously improving over time. These technologies can also personalize user experiences. They leverage customer data to predict and recommend what a user may find interesting or useful, while also providing tailored payment solutions. In addition, AI and machine learning help optimize transaction processes through automation. Automating processes improves everything from payment speed to processing accuracy. As these technologies evolve, payment systems are becoming more secure.

5 Strategies for Payment Providers to Unlock Revenue Growth Opportunities

You need a strategic approach to navigate the competitive, evolving market of payment services. Here's how providers can stay ahead of the game.

1. Optimize Transaction Fee Structures

You can boost profitability by optimizing transaction fee structures via strategies like:

• Tiered pricing: Offer lower fees for higher transaction volumes to incentivize merchants to process more payments. Providing tiered pricing not only increases transaction volume but also encourages long-term partnerships.
• Dynamic pricing models: Adjust fees based on payment method, transaction size, and geographic location. For example, you can charge higher fees for international transactions because they typically come with higher processing fees.

A good transaction fee structure is flexible. It should capture value in places where you can afford to charge more while staying competitive in lower-margin transactions.

New pricing architectures are also emerging for digital-first PSPs and embedded finance providers. Wallet-as-a-Service (WaaS) platforms and embedded wallet solutions typically offer flat monthly subscription tiers, API-call-based metering, or revenue-share models on interchange. For high-volume environments , gig economy payouts, in-app purchases, cross-border B2B settlements , flat-fee SaaS pricing increasingly outperforms percentage-based models, delivering greater cost predictability and margin control as transaction volumes scale.

2. Expand Value-Added Services

Offer value-added services to tap into more revenue streams and deliver more useful solutions to consumers and merchants. Some of these services include:

• Digital wallets: Enable customers to hold their cryptocurrencies in one secure place.
• Crypto custody and security: Offer secure storage solutions for digital assets to customers entering the crypto space.
• Crypto liquidity provision: Provide crypto liquidity during high trade volumes or when offering cross-border payments to ensure that assets are available for buyers and sellers.
• Tokenization and asset digitization: Help businesses and individuals convert assets like traditional currencies or loyalty points into digital tokens.
• Blockchain integration and consulting: Assist merchants in adopting blockchain technology for transparent transaction tracking.

Offering value-added services is a smart move that positions PSPs as innovators. For instance, AlphaPoint collaborated with Wenia to launch the Wenia Card. This crypto debit card allows users to spend their digital assets like Ether (ETH) and Bitcoin (BTC) as easily as traditional currency.

Crypto card programs represent one of the fastest-growing value-added services available to PSPs and financial platforms today. When a PSP launches or white-labels a crypto card, they participate in a layered revenue stack: interchange fees from every card transaction (typically shared from the 1.5–2.5% charged to merchants), FX conversion margins when users spend in a different currency from their held assets, and conversion fees when on-chain balances are liquidated at point of sale. By late 2025, crypto card payment volume had grown to approximately $1.5 billion per month , up from just $100 million per month in early 2023. Beyond direct revenue, crypto card programs increase brand visibility in the digital payments space by positioning the PSP as a forward-thinking player at the intersection of traditional payments and digital assets, accessible to users across 200+ countries on Visa and Mastercard rails.

3. Leverage Cross-Border and Crypto Payments

Whether sending money from abroad or buying an item online, global payment solutions connect businesses and people like never before and increase financial inclusion. Just look at El Salvador's Chivo Wallet, which has enabled 4 million Salvadorans to use BTC for affordable transactions and remittances. Payment providers that offer crypto payments and international transfers enjoy several benefits, including:

• Revenue growth: PSPs can tap into international markets, servicing businesses and consumers seeking faster and more cost-effective ways to transact across borders.
• Reduced transaction costs: Cryptocurrencies cut out traditional intermediaries, lowering transaction fees , especially in cross-border transactions.
• Faster processing times: Crypto payments settle almost instantly, enhancing customer satisfaction and streamlining operations.
• Expanded merchant ecosystems: Offering crypto payment solutions will attract merchants looking to stay ahead of digital trends.

Stablecoins are playing an increasingly pivotal role in cross-border payment infrastructure. Traditional international wire transfers can cost between 2–7% in combined fees and take 3–5 business days to settle. Blockchain-based stablecoin payments settle in under three minutes at any time of day. According to Artemis Research (2025), B2B stablecoin payment volumes surged from under $100 million per month in early 2023 to over $3 billion per month by 2025 , a 30x increase in just two years. For PSPs processing significant cross-border volume, integrating stablecoin rails has moved from a speculative experiment to a measurable competitive necessity. Embracing cross-border and crypto payments is a growth opportunity you can't afford to miss.

Further Reading: Stablecoin Treasury Management: The Definitive Guide

4. Form Strategic Partnerships

Collaborate with fintech companies, banks, and technology providers to unlock growth opportunities. Here's how strategic partnerships can help payment providers grow:

• Access advanced technology: Partnering with fintech firms can help you leverage payment technology you may not have access to on your own.
• Larger customer base: Collaborations with banks and tech firms can open doors to broader audiences and introduce you to untapped markets.
• Improved services: You can integrate advanced features like real-time fraud monitoring into your offerings.
• Cost efficiency: Sharing resources with partners reduces operational costs, allowing you to focus on scaling your business.

Strategic partnering can enhance your service portfolio and solidify your position in the competitive payments industry.

5. Embrace Open Banking and API-Based Models

Open banking is the sharing of data between fintech companies, banks, and payment providers. APIs streamline open banking by making data sharing secure and efficient. Here's why you should consider embracing open banking and API-based models:

• Increased innovation: Sharing customer data can foster the creation of new products and services. For example, the involved parties can use data to provide personalized financial services.
• Seamless integration: API-based models make it easier for payment providers to create an interconnected ecosystem by integrating accounting software, loan platforms, or budgeting apps. This provides users with a unified financial experience.
• Cost savings: APIs reduce the need to build infrastructure from scratch. For example, instead of developing a payment gateway from the ground up, you can integrate an existing API for secure payment processing.

Payment orchestration is emerging as a critical capability within open banking architecture. Orchestration platforms give PSPs a single API interface to connect multiple payment service providers (PSPs), dynamically routing each transaction to maximize approval rates and minimize cost by geography, risk profile, or payment method. The global payment orchestration market was valued at $1.7 billion in 2024 and is projected to reach $6.1 billion by 2030, growing at a 23.7% CAGR. In 2024, over 70% of large U.S. enterprises adopted multi-provider payment orchestration systems to enhance cross-border payment efficiency. For PSPs seeking to diversify revenue streams, orchestration unlocks new income from value-added services: smart routing analytics, fraud-as-a-service, reconciliation tools, and cascading fail-over logic that reduces lost revenue from declined transactions.

Unlock New Revenue Growth Opportunities with AlphaPoint

Standing out in the competitive payment industry requires providers to adapt to the changing needs of consumers. Value-added services, innovative tech, strategic partnerships, and open banking are excellent strategies that can help you create new revenue streams and drive customer loyalty. Don't have the team or resources to integrate these solutions into your platform? That's where AlphaPoint comes in. Our battle-tested white-label solutions enable you to launch new digital asset services quickly, efficiently, and securely. With more than ten years of experience working with fintechs, exchanges, banks, and brokerages, we can help you transform your payment system and capitalize on the latest industry trends. Ready to unlock growth and increase profits? Request a demo today!

Frequently Asked Questions

How do digital wallets generate revenue?

Digital wallets generate revenue through interchange fees on card-linked transactions, FX conversion margins on foreign-currency spending, subscription fees for premium tiers, and merchant transaction processing fees. The global digital wallet market reached $47.5 billion in platform revenue in 2024 and is growing at a 19.8% CAGR, projected to hit $119 billion by 2029.

What are the benefits of crypto payment solutions for online businesses?

Crypto payment solutions typically cost 0.5–1% per transaction, compared to 2–3% for traditional credit cards, and settle in under three minutes versus 3–5 days for international wires. Businesses also eliminate chargebacks (on-chain payments are irreversible), gain transparent blockchain-based audit trails, and can reach global markets including unbanked or underbanked populations.

How do crypto cards increase brand visibility in the digital payments space?

Crypto cards position a PSP or fintech as an innovative, digital-asset-friendly brand across everyday merchant touchpoints. By enabling users to spend crypto anywhere Visa or Mastercard is accepted , in 200+ countries , issuers gain continuous brand exposure, attract crypto-native users, and drive engagement through competitive cashback and rewards programs funded by interchange revenue.

What is a crypto card issuer's revenue model?

Crypto card issuers earn revenue through three primary streams: a share of interchange fees (from the ~1.5–2.5% charged to merchants per transaction), FX conversion margins when assets are liquidated from crypto to fiat at the point of sale, and in some configurations, subscription or card issuance fees. By late 2025, crypto-funded cards globally were processing approximately $1.5 billion per month in payment volume.

How can payment orchestration platforms help PSPs diversify revenue streams?

Payment orchestration platforms connect PSPs to multiple payment providers through a single API, routing transactions dynamically to maximize approval rates and minimize cost. Beyond routing, they enable revenue from value-added services: fraud analytics, reconciliation-as-a-service, and smart retry logic. The market for these platforms is growing at a CAGR of 23.7%, reaching a projected $6.1 billion by 2030.

What pricing models do wallet-as-a-service platforms typically offer?

Wallet-as-a-Service platforms most commonly offer three models: flat monthly SaaS subscriptions (tiered by user count or monthly transaction volume), API-call metering (pay-per-use, suited for variable transaction flows), and revenue-share arrangements on interchange. High-volume PSPs increasingly favor flat-fee SaaS models because they deliver cost predictability and stronger margin control as volumes scale.

What are the additional security layers that protect digital payments?

Beyond passwords, leading digital payment platforms deploy multi-layer security: biometric authentication (face, fingerprint, voice), real-time AI behavioral analytics, device fingerprinting, payment credential tokenization, end-to-end encryption, and multi-factor authentication (MFA). Approximately 35% of crypto payment providers had adopted biometric security as of 2024–2025, and McKinsey projects global card fraud losses will reach $400 billion over the next decade.

How can PSPs leverage cross-border crypto and stablecoin payments to grow revenue?

PSPs can integrate stablecoin rails to offer near-instant cross-border settlement , under three minutes , at 2–7% lower cost than traditional wire transfers. B2B stablecoin payment volumes surged 30x between 2023 and 2025, reaching $3 billion per month. PSPs that support stablecoin-powered international transfers gain access to new markets, attract institutional clients, and reduce operational FX risk without holding volatile digital assets.

How can payment providers boost platform growth?

Payment providers can boost platform growth by adding value-added digital asset services (crypto wallets, custody, card programs), leveraging API-based payment orchestration to optimize transaction routing, forming strategic fintech partnerships, and integrating stablecoin rails for cross-border efficiency. Providers that combine diversified revenue streams with white-label infrastructure , like AlphaPoint's battle-tested platform , can scale new services without rebuilding core technology