Abstract
There has been a continued strong global transaction growth in both debit and
credit card transactions. The continuous move away from cash to electronic
mode of payment is creasing significant opportunities for payment processors
like First Data, Global Payments and networks like MasterCard and American
Express.
Australia' s share of retail payments through credit and debit cards
is the highest with 51% of overall transactions in the country. Canada, France
and United States follows with 47%, 40% and 37% respectively of overall retail
transactions with credit and debit cards. Cash-centric international markets
like Russia, Japan, China, Germany and Italy holds immense opportunities for
merchant processors and card networks as the level of card penetration is also
rising in these countries.
The merchant services industry is highly
competitive and largely a commoditized industry. The major factors that have
increased competitiveness include aggressive pricing by merchants, increased
adoption of technologies and ease of switching processors.
Increased
competitiveness and aggressive pricing has resulted in negative impact on the
margins of merchant processors. Reduced profitability of the industry has
resulted in consolidation as players are increasingly looking for gaining
economies of scale.
The report is a study on the shift to electronic payments
from cash and the implications of this shift from the perspective of merchant
processors or acquirers. The supply chain in the processing of credit or debit
cards has been studied with a focus on the major entities - card issuer, card
association, merchant, merchant acquirer and electronic processor for credit
and signature debit transactions. The report analyzes the factors that are
driving the growth of paperless transactions. It also assesses the
competitiveness of the merchant processing industry and profiles the
significant processors.
View Cart
