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Innovation in Payment Systems: The Emergence of Contactless Cards and Payments

  • Published:
  • 80 Pages
  • Timetric

Abstract

Synopsis

The report provides market analysis, information and insights into contactless card payments including:

  • Current and forecast analysis of the contactless cards market, including previous and future market growth
  • Comprehensive analysis of the industry's market attractiveness and future growth areas
  • Analysis of various market drivers and regulations governing the global contactless payments industry
  • Detailed analysis of the marketing strategies adopted by key players globally in order to increase the volume of contactless payments
  • Comprehensive analysis of contactless payments through cards and mobile handsets
  • Key challenges facing the contactless payments market in various regions of the world and profiles of key players in the industry

Summary

Contactless payments are being promoted by payment providers without necessarily being demanded by consumers. Aimed at displacing cash, which is generally disliked by merchants and financial institutions due to the costs of handling it (including security), contactless payments face strong competition from increasingly popular Chip and PIN debit card payments. Although contactless cards are the short-term future for low-value payments, they will over time converge with mobile handsets. Innovators such as Google and Apple have already launched NFC-enabled devices, and other mobile handset manufacturers will follow when acceptance of contactless mobile payments broadens. Many of the trials underway in various countries have been instigated by Visa and MasterCard. Mainly located in large conurbations, Visa payWave and MasterCard PayPass adhere to international standards, and both schemes are open loop, meaning that cards can be used in a wide range of retail outlets, and not just for payment for public transport or where proprietary readers are installed. Much of the trial activity is taking place in Europe, seen as the next region for growth in contactless payments. UK card providers have been the most proactive in the region in terms of card issuance, with over 19.6 million contactless cards in circulation at the start of 2012.

Scope

  • This report provides a comprehensive analysis of the contactless payments industry across the world
  • It provides current values and forecast analysis of contactless payments market size for 2012 and 2017
  • It details the different infrastructural, consumer and business drivers affecting the contactless payments market globally
  • It outlines the current regulatory framework in the industry
  • It details the marketing strategies used by various key players, including banks and card issuers across the world
  • It provides case studies of contactless payments systems in various countries

Reasons To Buy

  • Make strategic business decisions using historic and forecast market data related to the contactless payments market
  • Understand the key market trends and growth opportunities within the contactless payment market in various regions of the world
  • Assess the competitive dynamics in the global contactless payments market
  • Gain insights into the marketing strategies adopted by key players globally in order to increase the volume of contactless payments
  • Gain insights into key regulations governing the contactless payments market all over the world

Table of Contents

1. Executive Summary

2. The Global Future of Contactless Cards and Payments

3. Global Snapshot of Contactless Payments

  • 3.1. Emergence of Contactless Payment
    • 3.1.1. Product launches
    • 3.1.2. Trials and pilots
  • 3.2. Global Market Size and Outlook
    • 3.2.1. Benchmarking contactless market opportunity
    • 3.2.2. Market opportunity
  • 3.3. The Technical Side of Contactless Payments
    • 3.3.1. Emergence of contactless stickers for mobiles that lacks NFC technology
    • 3.3.2. Contactless payments - such as closed loop, transport schemes
    • 3.3.3. Worldwide contactless card schemes

4. Analysis by Region - the Americas

  • 4.1. Introduction
  • 4.2. Market Size and Analysis of Contactless Payments
    • 4.2.1. Overview
    • 4.2.2. Market size by card type
  • 4.3. Key Trends and Drivers
    • 4.3.1. Infrastructure drivers
    • 4.3.2. Business drivers
    • 4.3.3. Consumer preference
  • 4.4. Regulatory Framework
    • 4.4.1. Regulations on debit card interchange fees and the Durbin Amendment in the US
    • 4.4.2. Involvement of NFC mobile payment in code of conduct rule for Canadian payment card
    • 4.4.3. Anti-money laundering legislation in Brazil cards and payments industry
    • 4.4.4. The SBIF requires the following standards with respect to issuance of debit cards in Chile
  • 4.5. Case Studies
  • 4.6. Challenges

5. Analysis by Region - Europe

  • 5.1. Introduction
  • 5.2. Market Size and Analysis of Contactless Payments
    • 5.2.1. Overview
    • 5.2.2. Market size by card type
  • 5.3. Key Trends and Drivers
    • 5.3.1. Infrastructure drivers
    • 5.3.2. Business drivers
    • 5.3.3. Consumer preference
  • 5.4. Regulatory Framework
    • 5.4.1. Mobile Contactless SEPA Card Payments Interoperability Implementation Guidelines (MCP IIGs)
    • 5.4.2. UK Card Association increases the contactless limit on debit and credit cards goes up to GBP20
    • 5.4.3. Prepaid cards regulation in the UK restricts the entry of new players
    • 5.4.4. Stringent card issuing regulation in Turkey presents challenge for card issuers in Turkey
    • 5.4.5. Central Bank initiative to reduce interchange fee will positively impact card use in Poland
  • 5.5. Case Studies
  • 5.6. Challenges

6. Analysis by Region - Asia-Pacific

  • 6.1. Introduction
  • 6.2. Market Size and Analysis of Contactless Payments
    • 6.2.1. Overview
    • 6.2.2. Market size by card type
  • 6.3. Key Trends and Drivers
    • 6.3.1. Infrastructure Drivers
    • 6.3.2. Business drivers
    • 6.3.3. Consumer preference
  • 6.4. Regulatory Framework
    • 6.4.1. Government support has been important in other regions
    • 6.4.2. The regulations on Japanese Payment Services Act (PSA)
    • 6.4.3. Regulations of prepaid payment instruments including contactless cards
    • 6.4.4. Revised eligibility requirements for credit card issuance in Malaysia
  • 6.5. Case Studies
  • 6.6. Challenges

7. Appendix

  • 7.1. Methodology
  • 7.2. Definition
  • 7.3. Background
  • 7.4. Contact Us
  • 7.5. About Timetric
  • 7.6. Disclaimer

List of Tables

  • Table 1: Impact of PayPass on Transaction Behavior Compared with Cash
  • Table 2: Interchange Fees for Visa and MasterCard, 2011
  • Table 3: Cashless Transactions: Asia-Pacific vs. the US and Europe, 2010-2020
  • Table 4: Contactless Payments Key Definitions

List of Figures

  • Figure 1: Factors Driving the Growth of Contactless Cards Among Various Stakeholders
  • Figure 2: Contactless Payment Presents Significant Growth Opportunities Over Traditional Cards
  • Figure 3: Launches of Contactless Cards Worldwide, 2008-2012
  • Figure 4: Brands Accepting Contactless Payment Worldwide
  • Figure 5: Worldwide Contactless Card Market Size (Millions), 2008 - 2017
  • Figure 6: Turkey, France and Canada Present Strong Growth Potential for Contactless Cards
  • Figure 7: MasterCard PayPass Points of Communication
  • Figure 8: Evolution of Payment Systems in the Americas
  • Figure 9: Market Size of Contactless Cards in the US and Canada (Million), 2008-2017
  • Figure 10: Market Shares of Contactless Cards in the US and Canada (%), 2012
  • Figure 11: Market Size of Contactless Prepaid Cards in the US and Canada (Million), 2008-2017
  • Figure 12: Market Size of Contactless Debit Cards in the US and Canada (Million), 2008-2017
  • Figure 13: Market Size of Contactless Credit Cards in the US and Canada (Million), 2008-2017
  • Figure 14: Contactless Technology in the Americas - Key Trends and Drivers
  • Figure 15: NFC Mobile Contactless Payment Stakeholders
  • Figure 16: Smartphone Penetration in the Americas - 2012
  • Figure 17: Consumer Preferences for Contactless Cards Across Various Sectors
  • Figure 18: Consumer Preference to Choose Contactless Cards Over Other Payment Modes
  • Figure 19: Regulatory Frameworks in the Americas
  • Figure 20: Contactless Technology in the Americas - Key Challenges
  • Figure 21: Volume of Contactless Cards in Selected European Countries (Million), 2008-2017
  • Figure 22: Shares of Contactless Cards in Selected European Countries (%), 2012
  • Figure 23: Market Size of Contactless Prepaid Cards in Selected European Countries (Million), 2008-2017
  • Figure 24: Market Size of Contactless Debit Cards in Selected European Countries (Million),
  • Figure 25: Market Size of Contactless Credit Cards in Selected European Countries (Million),
  • Figure 26: Contactless Technology in Europe - Key Trends and Drivers
  • Figure 27: Growth in Smartphone handset volumes in Europe - 2011
  • Figure 28: Security Factors That Drives Merchant For Contactless Payments
  • Figure 29: Consumer Preferences for Contactless Cards in Europe Across Various Sectors
  • Figure 30: Regulatory Frameworks in Europe
  • Figure 31: Market Size of Contactless Cards in Selected Asian Countries (Million), 2008-2017
  • Figure 32: Shares of Contactless Cards in Selected Asian Countries (%), 2012
  • Figure 33: Market Sizes of Contactless Prepaid Cards in Selected Asian Countries (Million), 2008-2017
  • Figure 34: Market Sizes of Contactless Debit Cards in Selected Asian Countries (Million), 2008-2017
  • Figure 35: Market Size of Contactless Credit Cards in Selected Asian Countries (Million), 2008-2017
  • Figure 36: Contactless Technology in Asia - Key Trends and Drivers
  • Figure 37: Consumer Preference on Contactless Cards in Asia Across Various Sectors
  • Figure 38: Consumer Preference on Contactless Cards in Asia Across Various Sectors
  • Figure 39: Regulatory Frameworks in Asia
  • Figure 40: Contactless Technology in Asia - Key Challenges
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