A new white paper that will be released by Double Diamond Group on Thursday (Oct. 20) argues that the payment facilitator market holds significant potential for independent software vendors looking to generate new revenue.

The big names operating as payment facilitators already have used the PF model to garner a significant chunk of payment processing volume. According to the paper, large companies such as PayPal. Stripe and Square already collectively process hundreds of billions of dollars a year in gross payment volume. This number has the potential to go much higher as other companies enter the market.

The paper looks at the business trends that are making the payments business attractive to ISVs. Based on current growth patterns, it estimates that even when excluding PayPal, Square, and Stripe, the market could grow to more than $500 billion in gross processing volume over the next five years.

“We’ve been operating in this space for several years, and we have always believed it was a big opportunity,” said Todd Ablowitz, president of Double Diamond Group and publisher of PaymentFacilitator.com. “But the sheer size of the potential market based on this research surprised even us.”

Rick Oglesby, principal of AZ Payments Group and a partner of Double Diamond Group, conducted research for the study. He said the paper looks at total market potential, at the current market size, and at current and near-term penetration rates.

The study estimated that about 10,500 U.S.-based companies currently operating in the business-to-business software-as-a-service (B2B SaaS) space could operate as payment facilitators. It uses current data on the size and growth rates of these companies, current PF adoption rates, and a variety of historical examples to estimate the growth potential, he said.

“We believe that the PF market is unlocking multiple opportunities in emerging market verticals that are far less saturated than the traditionally targeted segments,” Oglesby said.

“Also, cloud-based SaaS platforms in the digital economy have the ability to grow virally and scale globally much more rapidly than traditional models. This is evidenced by the track records of companies such as Adyen, PayPal, Square, and Stripe, all of which have leveraged the PF model to achieve explosive growth. We think this trend can and will continue.”

The white paper is being released at the ETA Strategic Leadership Forum. ETA also plans to launch its new payment facilitator guidelines at the event.