Cards And Payments Market Definition
The cards and payments market consist of sales of cards and payment services by entities (organizations, sole traders and partnerships) that engage in storing, processing and transmitting payment card data.
The card and payments industry include issuing and acquiring banks, card processing and issuing companies, payment processing institutions such as banks, and non-banking financial corporations. Revenues generated from the cards and payments market include the processing and services fees or commissions levied by the banks and financial institutions for payment processing. This market excludes interest charged by the banks on credit cards or other cards.
Cards And Payments Market Size
The global cards and payments market reached a value of nearly $721.9 billion in 2019, having grown at a compound annual growth rate (CAGR) of 7.0% since 2015, and is expected to grow at a CAGR of 8.5% to nearly $999.3 billion by 2023.
Growth in the historic period resulted from emerging markets growth, increase in internet penetration, demonetization increases card usage and rise in consumer spending/increase in disposable income. Lack of security in digital payments negatively affected the growth in the historic period.
Going forward, increase in e-commerce market, increased security in digital payments, and increase usage of credit cards due to additional benefits will drive the growth. Factors that could hinder the growth of the cards and payments market in the future include security issues related to contactless technologies.
Cards And Payments Market Drivers
The key drivers of the cards and payments market include:
Going Cashless
The COVID-19 pandemic is making a major impact on the cards and payments market, driving the markets growth. The World Health Organization urged people to use contactless payments instead of cash to avoid infections from COVID-19. For instance, according to the Mobile Payments Today report, in the USA, the Port Authority of New York and New Jersey stopped accepting cash at three of the major bridges and tunnels into New York City, including the George Washington Bridge and the Lincoln and Holland Tunnel, in response to the emergency orders from New York and New Jersey related to the COVID-19 pandemic. Non-cash transactions are estimated to accelerate at a CAGR of 12.7% globally with emerging markets growing at 21.6% from 2016-21. In 2019, emerging markets that account for about one-third of global non-cash transaction volume are expected to contribute nearly half of the global volume in 2021, driven mainly by sustained digital innovation, adoption of mobile payments. Therefore, increasing use of cards and payments driving the growth of the market.
Cards And Payments Market Restraints
The key restraints on the cards and payments market include:
Security Issues Related to Contactless Technologies
Contactless card is an emerging mode of payment as they are more convenient for use but risk factors involved in it can restrain the growth of the cards and payments market in the forecast period. A contactless card doesn’t require any PIN to access therefore, if the card is lost or stolen, anyone who finds the card can just swipe the card to make payment and the money gets deducted. For instance, in 2018, a total of £1.8 million was stolen by fraudsters from contactless cards users in UK. This type of instances is expected to increase in future and this can hinder the growth of the market for cards and payments during the period.
Cards And Payments Market Trends
Major trends influencing the cards and payments market include:
Use Of Artificial Intelligence (AI) In Fraud Prevention
Cyber Frauds are becoming more complex, businesses and payment services are increasingly using artificial intelligence technology to detect and prevent potentially fraudulent payments. Cybercrime and fraud risks for retailers who accept digital payments are evolving in unexpected ways. Therefore, digital businesses are increasingly turning to AI to help them make quicker and better decisions, particularly when it comes to approving good transactions and rejecting fraudulent ones. AI will be crucial for successful payments’ fraud prevention strategies. It can detect emerging fraud by uncovering anomalies and detecting fraudulent patterns. For example, American Express, uses AI in avoiding any fraudulent payments.
Doorstep Payment Services For Senior Citizens And Disabled
To assist senior citizens and differently abled or infirm persons making financial transactions or payments, doorstep services were initiated for people who cannot make go to bank branches or make any financial transactions by themselves. For instance, in 2019, State Bank of India (SBI) introduced priced doorstep services for senior citizens above 70 years and also for disabled and infirm customers, including visually impaired people. The facility is available for those who live within a 5 km radius of bank branches. These services are available for payment of a fee Rs 100 ($1.2) for financial transactions. In order to avail these services, customers have to register at their home branch; infirm and disabled customers have to submit their medical certificate to register. However, many payment providers are yet to introduce a policy for providing doorstep services for customers.
Opportunities And Recommendations In The Cards And Payments Market
Opportunities – The top opportunities in the global cards and payments’ market segmented by type will arise in the cards segment which will gain $154 billion of global annual sales by 2023. Market-trend-based strategies for the cards and payments market include offering contactless cards to customers to offer convenient transactions and increase their share in the market, invest in mobile payment technology to enhance convenient transactions for customers and increase their revenue, invest in EMV technology to enhance safety relating to card transactions, offering prepaid cards to customers to offer convenience to customers and increase the share in the market and introducing new security measures and implement guidelines to prevent card related frauds. Player-adopted strategies in the cards and payments industry include strengthening its commercial payment business through innovative products and payment solutions, strengthening its cards and payment business through strategic acquisitions, strengthen its P2P, commercial and B2B payment services, expanding its cards and payment business through strategic partnerships diversifying its businesses by scaling up its capabilities to newer geographies and expanding is customers through strategic acquisitions.
Recommendations – To take advantage of the opportunities, the business research company recommends the cards and payments companies to focus on offering contactless cards, p2p payment applications, and fuel credit cards, focus on increasing awareness on security related to contactless payments and offering event sponsorships.
Cards And Payments Market Segmentation
The cards and payments market is segmented by type of product and by geography.
By Type Of Product -
The cards and payments market can be segmented by type of product
The payments market was the largest segment of the cards and payments market, accounting for $402.9 billion or 55.8% of the total in 2019. The cards market is expected to be the fastest-growing segment going forward at a CAGR of 10.3%.
The cards market is further segmented by type into
- a) Credit Card
- b) Debit Card
- c) Charge Card
- d) Prepaid Card
Credit card market was the largest segment of the cards market, grew from $97 billion in 2015 to $137.7 billion in 2019 at a compound annual growth rate (CAGR) of 9.14%. The market is expected to grow to $206.8 billion in 2023 at a compound annual growth rate (CAGR) of 10.71%.
The payments market is further segmented by end-user into
- a) B2B
- b) B2C
- c) C2B
- d) C2C
B2B end use market was the largest segment of the payments market, grew from $219.7 billion in 2015 to $257.3 billion in 2019 at a compound annual growth rate (CAGR) of 4.02%. The market is expected to grow to $313.7 billion in 2023 at a compound annual growth rate (CAGR) of 5.08%.
By Type Of Institution-
The cards and payments market can be segmented by type of institution
- a) Banking Institutions
- b) Non-Banking Institutions
Banking Institutions market was the largest segment of the cards and payments market, grew from $435.2 billion in 2015 to $540.9 billion in 2019 at a compound annual growth rate (CAGR) of 5.58%. The market is expected to grow to $703.7 billion in 2023 at a compound annual growth rate (CAGR) of 6.8%.
By Geography–
The cards and payments market is segmented into
- o North America
- o Western Europe
- UK
- Germany
- France
- Spain
- Italy
- Denmark
- Switzerland
- Ireland
- Sweden
- Netherlands
- Austria
- Belgium
- Portugal
- Norway
- Finland
- o Asia Pacific
- China
- Japan
- India
- Australia
- Philippines
- Vietnam
- Indonesia
- Malaysia
- New Zealand
- Hong Kong
- Singapore
- South Korea
- Thailand
- o Eastern Europe
- Poland
- Russia
- Romania
- Czech Republic
- o South America
- Peru
- Argentina
- Chile
- Brazil
- Colombia
- Venezuela
- o Middle East
- Saudi Arabia
- UAE
- Turkey
- Israel
- o Africa
- Nigeria
- Egypt
- South Africa
Asia Pacific was the largest region in the cards and payments market, accounting for 32.8% of the global market in 2019. It was followed by Western Europe, North America and then the other regions. Going forward, the fastest growing regions in the cards and payments market will be Asia Pacific and Africa, where growth will be at CAGRs of 13.2% and 11.7% respectively. These will be followed by Middle East and North America where the markets are expected to grow at CAGRs of 7.5% and 6.0% respectively.
Cards And Payments Competitive Landscape
Major Competitors are:
- • American Express Company
- • Visa Inc.
- • MasterCard Incorporated
- • Citigroup Inc.
- • PayPal Holdings, Inc.
Other Competitors Include:
- • Bank of America Corporation
- • JPMorgan Chase & Co.
- • Wells Fargo & Company
- • Agricultural Bank of China
- • Barclays PLC
- • Alipay
- • Tenpay PayEase
- • AsiaPay
- • NTT Com Asia
- • PaySec
- • Red Dot Payment
- • MOLPay
- • 2C2P
- • econtext Asia
- • HDFC Bank
- • Mandiri Bank
- • CIMB Niaga
- • UOB
- • DBS
- • Citibank BHD
- • Malaysian Banking
- • Shinhan Card
- • KB Kookmin
- • BDO Unibank
- • Metropolitan Bank
- • ICBC Bank
- • China Merchants Bank
- • JCB
- • Credit Saison
- • M&S Bank
- • Sainsbury Bank
- • Barclaycard
- • Aqua
- • TF Bank
- • Advanzia Bank
- • PayPal
- • Worldpay
- • Earthport
- • Adyen
- • Hyperpay
- • Visa
- • MasterCard
- • American Express
- • Discover
- • Helcim
- • BBVA Bancomer
- • BanCoppel
- • Banco de la Nación Argentina
- • Banco de Galicia y Buenos Aires SA
- • Banco Macro SA
- • Banco Santander Río SA
- • Banco Galicia
- • Banco Provincia
- • Banco Francés
- • Cabal
- • Tarjeta Naranja
- • Diners Club
- • Nexxus
- • Middle East Payment Services (MEPS)
- • Network International
- • MasterCard
- • CyberSource
- • Mercury
- • Payfort
- • HID Global Corporation/ASSA ABLOY AB
- • PayTabs
- • CASHU
- • Telr Pte Ltd.
- • Tap Payments
- • Mint Middle East LLC.
- • African Payment Solutions
- • IVeri
- • Wirecard
- • PayPal Pte. Ltd.
- • Peach Payments
- • Safaricom
- • PayFast
- • Tola Mobile
- • BusinessCardSA
- • Yoco
- • PayGate (Pty) Ltd
- • Payments Afrika
- • Sureswipe
- • Wallets Africa
