EMV payment cards market to achieve 4.6% growth in 2017

Online shopping trendsThe Europay, Mastercard and Visa (EMV) payment cards market is expected to achieve annual growth rate of 4.6 percent in 2017, according to ABI Research.

EMV payment card shipments dropped 18 percent in 2016 due to overstocking issues in the U.S. The EMV market in China reached saturation. New legislation limiting the number of accounts one citizen is permitted to own at a singular bank has also impacted the EMV market. China posted 8 percent drop in EMV payment card shipments due to saturation and the new legislation in China.

Over 56 percent of all EMV payment cards issued globally in 2017 will be issued into one of these three countries — the U.S., China and India.

India is currently in the early stage of EMV payment card migration which will help push EMV card shipments to the 3.2 billion mark by 2018. Growth is expected due to the recent demonetization push by the Indian government to help stem corruption alongside its national payments network, RuPay, implemented to improve access to digital banking facilities.

Approximately 259 million EMV cards will be delivered to India in 2017.That number is expected to increase rapidly over the next three years as issuers look to meet the EMV mandate deadline.

Alongside India, focus needs to shift to the remaining volume opportunity, including Indonesia and the Philippines, both of which will prove pivotal in growing global payment card shipment volumes from 2019 onwards.

“Strategic regional positioning is going to prove a vital aspect for the leading payment card vendors including Gemalto, OT-Morpho G&D, GoldPac, CPI Card Group, and Valid to take full advantage of any remaining volume opportunity,” said Phil Sealy, principal analyst at ABI Research.

There will be a significant opportunity in contactless migration, partially in the U.S. and potentially India.

Both the U.S. and Chinese markets will struggle and are likely to record another year of flat growth in 2017.

The next opportunity is in next generation payment cards, most notably dynamic card verification value (DCVV) cards that help address card-not-present (CNP) fraud and biometric sensor integration into payment cards which will add an additional layer of security.

“Any future card-based technology investment will need to be offset by additional value. Using biometric sensors to increase contactless spending limits or providing and utilising new technology as a platform from which issuers can extend current three-year card expiration dates to four or five years,” Phil Sealy said.

Meanwhile, Juniper Research said Visa and Mastercard will drive digital payments market to grow from $3.8 trillion globally this year to more than $5 trillion by 2020.

Mastercard is following a two-pronged approach; the company is developing partnerships with third party wallets from players such as Apple and Samsung, while also introducing its own API-based wallet.

Visa’s attempts to reduce friction in online payments through the implementation of one-click login (Visa Checkout) will increase conversion rates and overall online customer spend.

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