News is Good for Card Market
Several recent research reports indicate that the market for card payment at the point of sale is good and getting only better.
Frost & Sullivan recently said the global point-of-sale terminal market will grow at a healthy 16.4 percent compound annual rate over the next three years. The firm said that demand is up, but prices are falling with average prices dropping by 5 to 8 percent in recent years. Revenue for 10 of the major terminal vendors grew almost 19 percent in 2004 over 2003, the company said.
Part of the growth in the market is due to the banks' conversion to smart card use in many nations, a move that requires terminal upgrades, adds research firm Mercator Advisory Group. That group also said that most banks are requiring personal identification numbers to validate those cards.
Mercator Group also came out with a study on the U.S. prepaid market, which said that spending on open loop cards was $9 billion last year, up almost 92 percent over 2003. Open loop cards are cards such as those produced by Visa and American Express that can be used at any merchant. Total spending on closed loop cards, those that must be used at specified merchants, grew about 18 percent over the last year, Mercator Group said.
Copyright © 2005 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 15, No. 11, 11/05
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