LONDON, Feb. 16, 2017 /PRNewswire/ -- ABI Research finds global EMV payment card shipments reached just under three billion in 2016, marking a year-on-year (YoY) increase of less than 1%. Between 2012 and 2015, the market became accustomed to annual growth rates in the 20% to 35% range, as first China and then the U.S. began their respective migration programs. But as overstocking, paired with near saturation points, hit both countries simultaneously, orders significantly slowed in 2016 to impact the overall market.
U.S. EMV shipments totaled 530 million units in 2016, marking a YoY decrease of 19%. Overstocking proved a major barrier in 2016, having an additional knock-on effect on contactless issuance expectations as issuers first focus on depleting existing contact card stock. The U.S. will not likely see a significant move to contactless until 2018, with the Citi Costco card being the only significant portfolio to shift to the contactless interface to date.
China's 2016 YoY reduction stood at -3.9%, affected by lower than usual social security payment and pure payment People's Bank of China (PBOC) card issuance. Recent events in China may also slow the country's short to mid-term growth prospects, with the country's major payment network, UnionPay, pausing co-branded card issuance alongside a recent government initiative launched to limit the number of bank accounts one person can hold at a singular bank.
Although 2016 proved a forgetful year for the U.S. and China, India showed significant promise as the region begins to increase EMV card issuance in line with the mandate set by the Reserve Bank of India.
"India is arguably the last major country of significance to begin its EMV migration process," says Phil Sealy, Senior Analyst at ABI Research. "India will not only bring valuable growth in terms of shifting from mag-stripe to EMV card replacements, but the region also represents a fantastic market opportunity to seize new greenfield banking clients and open the doors for vendors to target net new issuance opportunities."
India is quickly moving from the physical (cash) to the digital, with measures now in place to ensure that the region maximizes digital payments opportunities. Firstly, the RuPay initiative continues to be a success in increasing digital banking inclusion. Secondly, a government-led initiative designed to reduce corruption by removing the 500 and 1,000-rupee cash denominations from circulation resulted in an unexpected boost for the digital payments market.
"Removal of the 500 and 1,000-rupee cash denominations directly led to a cash crisis, and as a direct result, increased demand for point-of-sale terminals and banking access," concludes Sealy. "A country once so reliant on cash was put into an instant state of shock, but the subsequent reaction will prove a positive one for all involved in the digital payments market."
These findings are from ABI Research's Payment and Banking Card Technologies (https://www.abiresearch.com/market-research/product/1022854-payment-banking-card-technologies/) report.
About ABI Research
ABI Research stands at the forefront of technology market research, providing business leaders with comprehensive research and consulting services to help them implement informed, transformative technology decisions. Founded more than 25 years ago, the company's global team of senior and long-tenured analysts delivers deep market data forecasts, analyses, and teardown services. ABI Research is an industry pioneer, proactively uncovering ground-breaking business cycles and publishing research 18 to 36 months in advance of other organizations. For more information, visit www.abiresearch.com.
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SOURCE ABI Research