Since the e-payment giant Paypal Holdings (NASDAQ:PYPL) joined the public equity markets last year, its stock price has fluctuated sharply between $31 and $38, as shown in the chart below. The sharp fluctuations in the PayPal’s stock price have been triggered by overall market weakness, the company’s quarterly performances and e-payments market developments. PayPal has been growing at an astonishing pace of 28% CAGR in past six years, which positions the company as the biggest pure-play e-payments company with a strong presence in online, in-store, and peer-to-peer transactions, with a broad portfolio that includes other successful services like Venmo,Braintree, and Xoom beyond the core PayPal activity.

The total transactions value processed through digital payments methods is expected to reach $2T in 2016 and climb to $4T in 2020, which reflects an amazing 16.4% annual growth rate. Assuming that e-payments service providers charge between 1.5% to 3% for a transaction fee, the e-payments market size is estimated to grow from $48B in 2016 to $89B in 2020. The enormous size of the e-payments market and its incredible growth rate has attracted many new players, including tech giants like Apple (NASDAQ:AAPL), Samsung Electronics (OTC:SSNLF), Google, and Facebook (NASDAQ:FB), as well as financial institutions like Visa (NYSE:V),Mastercard (NYSE:MA), and JP Morgan Chase (NYSE:JPM) and independent initiatives by leading retailers like MCX’s CurrentC.

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As the number of players is increasing rapidly, the e-payments market is becoming so crowded that it is preventing some players from generating substantial revenues that will justify their efforts. Even though the e-payment companies are struggling to generate significant revenues from their e-payments business, the credit card networks, which receive a fee for every  transaction, are benefitting from the market expansion.