The report forecasts the global mobile card reader market to grow at a CAGR of 68.47% during the period 2016-2020.
Earlier, card issuers were liable for credit card fraud whereas retailers were mostly exempt from it. However, in the US since October 1, 2015, this liability shifted to retailers in case they fail to adopt chip-and-pin technology. Payment networks implement this policy with EMV in order to reduce fraud. Card fraud is most prevalent in the US where most cards are still processed using magnetic stripe. These magnetic stripe cards can be counterfeited and are more prone to fraud compared to chip cards. This policy is expected to influence the mobile card reader market positively.
According to the report, the high number of MSMEs that are currently using cash-only transaction processes are the major target customers for vendors. These small businesses are reluctant to accept cards because of the numerous banking procedures involved, multiple fees charged by banks, and complex transaction process involving multiple devices. However, with the availability of mobile card readers, MSMEs have found a low-cost alternative to traditional PoS terminals. The market for mobile card readers is currently in its nascent stage and the adoption rate of mobile card readers by MSMEs is low.
Further, the report states that reaching out to MSMEs in remote locations, convincing them to use mobile card readers, and educating them about the potential benefits of them are some of the common problems faced by the vendors.