Shift to Electronic Payments: Growth Opportunities for Merchant Processors

Date: August 22, 2007
Pages: 25
Price:
US$ 900.00
Publisher: Koncept Analytics
Report type: Strategic Report
Delivery: E-mail Delivery (PDF)
ID: SF8F2A875F7EN
Leaflet:

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Shift to Electronic Payments: Growth Opportunities for Merchant Processors
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.

1. PAYMENTS INDUSTRY: MOVE TO PAPERLESS

This section provides statistics to support the move to paperless form of transaction. Also factors like SEPA have been discussed that is driving growth of electronic payments.
1.1 Growth of Cards Industry
1.2 Factors Driving Growth for Paperless Transactions

2. CARD TRANSACTION PROCESS: THE SUPPLY CHAIN

An effort has been made to provide an in-depth understanding of the dynamics of an entire transaction process

3. MAJOR ENTITIES IN THE CARD TRANSACTION PROCESS

This section highlights all the major entities in an electronic method of transaction

4. ELECTRONIC PAYMENT: GROWING SHARE OF DEBIT CARDS

This section assesses the competitiveness of the card issuers in terms of their market share and purchase transactions
4.1 Shift from Credit Cards to Debit Cards
4.2 Global Card Networks: Competitive Landscape

5. MERCHANT PROCESSING INDUSTRY

The section analyzes the principal competitive factors in the payment processing industry and the sales channels adopted by merchant processors
5.1 Structure of merchant processing industry
5.2 Merchant Processing: Competitive Factors
5.3 Merchant Processors’ Sales Channels: Direct and Indirect

6. MERCHANT PROCESSING: COMPETITIVE LANDSCAPE

Profiles of merchant processors, their strategies to compete effectively and their performance in the processing industry has been analyzed in this section
6.1 First Data
  Company Profile
  Performance of Merchant Processing Services
6.2 NOVA Information Systems (U.S. Bancorp)
  Company Profile
  Performance of Merchant Processing Services segment
6.3 Fifth-Third Bank
  Company Profile
  Performance of Processing Solutions Segment
6.4 Global Payments
  Company Profile
  Performance of Merchant Services Segment

7. FUTURE OPPORTUNITIES FOR MERCHANT PROCESSORS


FIGURES AND TABLES


FIGURES

Figure 1.1: Global Purchase Transactions on Credit and Debit Cards by Region
Figure 1.2: US Market Share of Paper and Cards: 2000-2005
Figure 4.1: Global card purchasing volume and total dollar volume
Figure 4.2: Payments through debit cards and credit cards: 2001-2005
Figure 4.3: Market share of Card issuers in the overall purchase volume (2006)
Figure 4.4: Growth of purchase volume transactions for major cards (2005 vs. 2006)
Figure 4.5: Purchase transactions through debit cards: Visa vs. MasterCard
Figure 5.1: Top US Bank Card Acquirers/Merchant Processors
Figure 5.2: U.S. Bancorp’s sales by business segment
Figure 5.3: Fifth Third’s sales by business segment
Figure 5.4: Global Payment’s sales by business segment
Figure 7.1: Forecast of global purchase volume through debit and credit cards: 2006-2011
Figure 7.2: Share of retail payments through cards and cash - Global markets
Table 5.1: Merchant Processors: Outlets and Average Transaction
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