The transactional card market is forecast to grow at an average annual growth rate of 10.5% in market value terms between 2014 and 2019. The total number of units for the transactional market is set to grow at an average annual growth rate of 5.3% for total units to 2019. Clearly, market value growth is outpacing unit growth, indicating an increase in unit value triggered by the global move towards IC chip-enabled cards.
 
The overall unit volume of transactional cards covered in our report, “The Future of Transactional Cards to 2019.” This volume is dominated by North America and Asia, together responsible for around 77% of the annual volume. In 2009, North America was the leading market, but the forecast is that it will be overtaken by Asia in 2019. The largest market segment in North America is gift cards, while in Asia it is debit cards.
 
North America and the EU remain the most mature payment cards markets, accounting for more than two-thirds of global financial transactions. Asia is by far the single largest regional market in unit volume, dwarfing the second largest market, North America, by a factor of 3.5 in 2014.
 
Cards deliver speed and convenience to consumers, as well as operational efficiencies. As transactional cards gained popularity, they also attracted attention from the criminal fraternity. Fraud attacks have been aimed towards the areas of least protection: card-not-present, data breaches and the use of chip cards in regions where EMV – Europay, Mastercard, Visa – is not yet implemented. The latter specifically refers to the U.S., where cards originating in Europe are authenticated with the fraud-sensitive magnetic stripe, and thus evade EMV security protocols.
 
To counter security threats, the industry has implemented tools and technologies to safeguard against potential harmers. A common practice is to attach a unique one-time password called a “dynamic cryptogram” to each clearing and authorization transaction – standard EMV process. Another efficient defence procedure is the encryption of payment card information at the point-of-capture and also replacing sensitive data with a surrogate value – a process called tokenization.
 
This extensive report also looks at new technology affecting the industry. Mobile wallets and mobile payments have seen increased media attention lately; however, at present the market is still remarkably small, but it is forecast to grow explosively in the near future. Smithers Pira anticipates that the mobile wallet over time will substitute a significant portion of the transactional cards market, particularly if the excitement over Apple Pay catalyzes adoption.
 
The Future of Transactional Cards to 2019 is available now for £3,950. For more information, please contact Stephen Hill at +44 (0) 1372 802025, or via e-mail, or visit www.smitherspira.com.