Us Payment Card Market

The U.S. payment card market size was estimated to be USD 934.3 million in 2017. Technological advancements, improvement in security and standardization by regulatory authority are some of the major factors due to which the U.S. payment card market is expected to grow over the forecast period.

U.S. has the world’s largest user base of magnetic stripe cards and was the last developed country to adopt EMV cards. Increase in the number of magnetic card frauds such as theft, card cloning and ATM machine frauds were rising exponentially over the years. The robust fraud prevention system of the U.S. government was falling short to solve the situation and had an only option of implementing EMV standards. Meanwhile, EMV cards had been successful in reducing the number of frauds across Europe and Asia Pacific as it added tokenization to the security layer. Replicating this trend, the U.S. payment card market is expected to witness significant growth over the forecast period.

The global US Payment Card market is expected to develop 23.66 billion by 2030, at a compound annual increase in price (CAGR) of 16.2% throughout the forecast period.

One of the reasons the U.S. had not adopted EMV cards was its robust fraud prevention system. On the other hand, the lack of such a strong system was the reason for other countries to adopt microchip cards. The U.S. has always had real-time transaction logs which means the card information is immediately sent by the merchant to the issuer for verification, whereas, in other countries, the data was stored by the merchant during the day and sent for verification the next day. Consequently, fraudsters had more time to commit unauthorized transactions.

The EMV cards which requires personal identification number PIN at the time of transactions offer more security compared to magnetic stripe cards transactions that are authenticated by visual inspection and card holder’s signature. The magnetic stripe card can be cloned and the data from the card can be easily stolen by using card readers which are easily available in the market. However, the chip in EMV cards cannot be cloned and the data stored in it is safe. The PIN adds another level of security and makes it difficult for the fraudsters to make the transaction.

The U.S. government’s initiatives to shift from cash to cashless is one of the major factors to drive the growth of payment cards. For instance, according to the Bank for International Settlements, in 2015, North America dominated the overall market in the number of non-cash transaction by contributing around 34%. The non-cash transactions include payment cards, cheques, mobile wallets and online payments. Such a shift is expected to drive the U.S. payment card market during the forecast period.

The advancement in technology has changed the way payments were made using microchip cards. The new and emerging technology known as near field communication (NFC) has enabled contactless payment through mobile phones and wearables such as smartwatches, rings, jewelry and other accessories. The transaction is completed conveniently by holding the devices near the payment terminal. As the technology is new and emerging, most of the devices which are to be launched in the coming years will be embedded with a chip and NFC technology. As a result of this, the growth of U.S. payment card market is expected to hinder in the coming years.

The contact-based payment card dominated the U.S. payment card market in 2017 and is expected to maintain its position over the forecast period. Majority of the U.S. citizens use contact-based traditional and EMV smart cards to complete the transaction. As the chip card requires a PIN to authenticate the transactions, it is the most preferred type of card. Moreover, most of the business and commercial transactions are done using contact-based credit and debit cards as they require personal identification number to complete the transaction. The data stored on these EMV cards is impossible to clone thus reducing the number of frauds occurring by data theft. The segment is anticipated to witness a revenue growth at a CAGR of 6.7% over the forecast period.

The U.S. payment card market is witnessing a strong growth as people are adopting and shifting towards the digital and cashless economy. Moreover, companies are innovating new products and services with improved security features in the financial industry which is further increasing the penetration of payment cards in the market. For instance, in August 2014, Oberthur technologies acquired Nagra ID, a player that develops and markets powered cards which offer secure access to the cloud. They developed cards with interactive keypads with digital displays on the front and back side of the card. The front displays the OTP while the back displays dynamically-generated CVV. Major players in the U.S. payment card market include Perfect Plastic Printing, Oberthur Technologies, Gemalto, CPI Card Group, Giesecke & Devrient, Valid USA, Inc., Goldpac Group Ltd, MCT Cards & Technology Pvt. Ltd, dz card and CardLogix Corporation.

US Payment Card Market Scope

Key Segments of the U.S. Payment Card Market

Type Overview (USD Billion)

• Contact
• Contactless
• Dual Interface

Regions

• North America
• Europe
• Asia Pacific
• Middle East and Africa
• and South America