Contactless Payment Cards Forecast to Account for over 50% of all Cards Delivered Globally in 2018
London, United Kingdom - 03 Oct 2018
Contactless payment card issuance is set to hit 1.5 billion units in 2018, accounting for over 50% of all payment card shipments delivered globally, according to ABI Research, a market-foresight advisory firm providing strategic guidance on the most compelling transformative technologies. Breaking the 50% barrier marks a significant milestone in contactless card migration, where market momentum is expected to continue due to next-generation migration opportunities, most notably in the U.S., India, South East Asia, and Latin America. These opportunities are helping to push contactless card issuance volumes toward 2.3 billion annually by 2022.
The buzz in contactless migration and market expectations has been further heightened thanks to the contactless migration mandates put in place in Latin America and South East Asia. With short deadlines, set by Visa and MasterCard, coming into effect in October 2018 for POS terminals and April 2019 for new card issuance respectively, all eyes are pinned toward these two regions as significant growth areas for the contactless payment card interface.
“All the indicators are positive for a significant level of contactless migration into these two regions and although demand is yet to materialize, activity and heightened interest from issuers in countries including India, Thailand, Colombia, and the Philippines will likely result in an increase of contactless issuance as early as Q4 2018. However, South East Asia is looking more positive than Latin America. It is understood that larger issuers in Latin America are looking to postpone the mandate (particularly in Brazil), driven by price and a lack of readiness,” commented Phil Sealy, Principal Analyst at ABI Research.
Furthermore, ASP degradation will continue to play a significant role in issuer interface choice. Continued ASP reductions will only increase contactless appetite among issuers, particularly as the price gap between contact and contactless narrows. However, contactless enablement and migration programs are only one aspect of driving the payment cards market toward higher value card propositions. The next-generation of technologies and materials are already making their market presence known.
“Differentiation is playing a key role in issuer strategies, in a bid to not only differentiate from the traditional competition, but also as a means of combating Neo/challenger banks. The leading smart card vendors, including Gemalto and IDEMIA, have primed their respective payment card product portfolios to take advantage of a card market which is transforming from one of delivering secure payment authentication, toward new functionality and personalized experiences to stand out from the crowd, create new levels of brand stickiness, and ultimately broaden card portfolios via new form-factors, including metal cards and next-generation powered payment cards with biometric and display enabled form-factors,” Sealy explains.
“Contactless used to be one of the ways to differentiate, but as contactless payment cards become the de-facto interface of choice, banks and financial institutions will increasingly turn toward next-generation technologies, materials, and personalized services in order to execute differentiation strategies,” he concluded.
These findings are from ABI Research’s Payment & Banking Card Technologies report. This report is part of the company’s Digital Security research service, which includes research, data, and Executive Foresights.
About ABI Research
ABI Research provides strategic guidance for visionaries needing market foresight on the most compelling transformative technologies, which reshape workforces, identify holes in a market, create new business models and drive new revenue streams. ABI’s own research visionaries take stances early on those technologies, publishing groundbreaking studies often years ahead of other technology advisory firms. ABI analysts deliver their conclusions and recommendations in easily and quickly absorbed formats to ensure proper context. Our analysts strategically guide visionaries to take action now and inspire their business to realize a bigger picture. For more information about ABI Research’s forecasting, consulting and teardown services, visionaries can contact us at +1.516.624.2500 in the Americas, +44.203.326.0140 in Europe, +65.6592.0290 in Asia-Pacific or visit www.abiresearch.com.
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