Financial Transaction Processing NAICS 522320

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Industry Summary
The 3,500 financial transaction processing companies provide payment processing, reserve and liquidity, and check or other financial instrument clearinghouse services. As intermediaries between buyers and sellers, clearinghouses validate, settle, and finalize financial transactions. Payment service providers (PSP) act as middlemen between banks, merchants, and card networks and aggregate credit card and other forms of electronic payment processing for tens of thousands of small to medium-sized businesses. Peer-to-peer (P2P) payment systems, which include money transfer applications, allow users to send money directly to another user through a linked bank account.
Extensive Regulation and Oversight
Because financial transaction processing deals directly with money and private accounts, the industry is subject to extensive regulation and oversight by government and other organizations.
Industry Concentration and Competition
The payment processing industry is highly competitive and dominated by large companies.
Recent Developments
Apr 25, 2025 - Industry Embraces AI Integration
- Financial transaction processing industry employment decreased 3% year over year in January 2025 as AI plays an increasingly larger role to play in the industry and displacing some workers. Research from International Data Processing predicts that the financial services industry will spend $632 billion by 2028, of which financial transaction processing will account for 20%. Fraud detection has emerged as the primary benefit of AI. Mastercard asserts that last year it used AI to protect about 125 billion payment transactions, a scale that wasn’t previously possible. Automation is also a key benefit of AI with industry players able to simplify tedious accounting and compliance tasks and speed up transaction processing. J.P. Morgan predicts AI’s next application will be embedded finance, which is the inclusion of payment systems into non-financial apps and services.
- Social media company X announced in late January 2025 that it had signed a partnership with Visa for the credit card giant to be the main financial partner for X Money, its coming payment platform. It is part of X’s quest to become an “everything” app and compete with the likes of CashApp and Venmo in not only business transactions but peer-to-peer payments as well. Visa is keen on expanding its digital services with a particular focus on payments to influencers, content creators and marketplaces. A survey of social marketplaces from Visa showed that two out of three merchants wait too long for payment and it negatively impacts growth. Payment systems have been available across social media apps for years, but the X Money service is the first time such a technology is built directly into a social platform.
- Digital wallet penetration among Americans is approaching 90%, according to professional services firm McKinsey. A majority of Americans now use their digital wallets more frequently than traditional payment methods, according to Forbes. The most widely used digital wallet is PayPal, used by 40% of digital wallet holders, followed by Apple Pay at 28%, and Venmo at 22%. Apple Pay is the preferred choice among consumers who use their digital wallet for purchases five or more times a month, while those who use their wallet just once a month tend to favor Venmo and Cash App Pay.
- About 51% of US consumers use Peer-to-Peer (P2P) apps to send money, according to financial transaction processing news site PYMNTS. P2P payment has been dominated by FinTech players like Venmo and Zelle, but consumers are increasingly expecting their primary financial institutions to offer P2P capabilities, according to PYMNTS. The appeal is clear: convenience, speed, and the added security of dealing with a trusted financial partner. Banks that fail to provide P2P services risk losing customers to FinTech disruptors, according to PYMNTS.
Industry Revenue
Financial Transaction Processing

Industry Structure
Industry size & Structure
The average financial transaction processing services provider operates out of a single location, employs about 40 workers, and generates about $30 million annually.
- The financial transaction processing industry consists of about 3,500 firms that employ about 134,000 workers and generate over $100 billion annually.
- The industry is concentrated; the top 50 companies account for over 85% of industry revenue.
- Automated Clearing House (ACH) operators include the Federal Reserve, the Reserve Banks, and the Electronics Payment Network (EPN). The EPN is part of The Clearing House (TCH), which is owned and operated by the world’s largest commercial banks. THC also owns the Clearing House Interbank Payment System (CHIPS), the primary clearinghouse in the US for large banking transactions.
- Owned by the Depository Trust & Clearing Corporation (DTCC), the National Securities Clearing Corporation (NSCC) clears nearly all corporate equity and bond trades in the US. The Options Clearing Corporation (OCC) specializes in equity derivatives clearing for 20 exchanges and trading platforms.
- Large companies with payment processing and/or peer-to-peer (P2P) payment operations include PayPal (Venmo), Block (Cash App, Square), Stripe, and Fiserv.
Industry Forecast
Industry Forecast
Financial Transaction Processing Industry Growth

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