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By 2026, revenue leakage from fraud and platform inefficiencies to cost CPaaS $1.4 billion

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CPaaS providers

XConnect, a Somos Company which provides world-class numbering intelligence solutions, has reported that revenue leakage from fraud and platform inefficiencies will cost Communications Platform as a Service (CPaaS) $974.3 million in 2022. This is expected to rise to $1.4 billion in 2026. The report shows that despite this estimated rise, over 25% of respondents believe that they would not lose revenues to fraud or platform inefficiencies.

To establish an understanding of the biggest barriers to growth for CPaaS providers and identify future revenue trends, Mobilesquared surveyed 75 CPaaS providers and mobile operators across the globe for XConnect.

According to the research, the voice channel will experience the greatest threat from fraudulent practices and platform inefficiencies which will be 34% of total fraud in 2022, and 39% by 2026. The report identified that termination rate charges, followed by traffic inflation are the biggest threat to voice traffic. Around 25% of respondents identified the supplementary threats of information accuracy and premium rate call back.

“The CPaaS industry is a rapidly expanding market that holds many opportunities and challenges for service providers. Over recent years, we’ve seen an increase in threats to omnichannel revenue as robocalling and termination charges affect more businesses than ever before,” said Tim Ward, VP Number Information Services, at XConnect. “This is driving the need for greater number intelligence services for CPaaS providers. It is critical that they understand the risk to revenue and have the solutions in place to tackle potential business disruptions and deliver better communications.” 

The research also showcases that consolidation will have a key role in the growth of CPaaS in the coming years. Service integration followed by platform integration are the biggest business challenge for CPaaS providers.

“As digitalisation becomes more far reaching, the changing needs of modern consumers are pushing service providers to innovate and integrate their service offerings. The research shows that traditional voice and messaging service providers need to be ready to enhance their offerings to drive growth in CPaaS,” said Nick Lane, Chief Insight Analyst & Founder, Mobilesquared. Today’s communications market is ready for evolution. To successfully capture the huge opportunity in omnichannel, service providers must embrace diversity with their end users in mind.” 

According to Mobilesquared, voice will be one of the fastest growing CPaaS channels, attributing $4 billion to CPaaS revenues in 2022, and $9.5 billion by 2026. Overall, Mobilesquared expects that CPaaS will generate revenues of $29.7 billion in 2022, increasing to $52.8 billion in 2026.

Download the full report here.

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