The past few years have seen an unprecedented change within the payments market, according to a report from Juniper Research.
Juniper Research explains that “the rise of eCommerce has led to a widespread transition to digital payments across markets, with cash use decreasing rapidly.”
In many ways, Juniper Research noted that “the card has been a huge beneficiary of these changes; becoming an integral part of eCommerce processes within Western markets.”
The researchers at Juniper added that the “shift to contactless payment methods has also massively benefitted cards, with NFC (Near Field Communication) capabilities embedded in cards having taken off at scale.”
However, payment cards have not “had it all their own way.”
Juniper Research further noted that “the growth of digital technology has seen the rise of digital wallets, and while these can be funded by payment cards in many cases, they also commonly bypass cards entirely.”
As digital payment methods proliferate, payment cards “could be disintermediated, particularly with the rise of technologies such as Open Banking and A2A (account-to-account) payments.”
According to Juniper Research, there is also “the issue of relevance in emerging markets, where cards are not as well established.”
In this context then, how does the payment card “stay top of mind for customers, and help card issuers to strengthen their relationships with customers?”
Juniper Research explained that “this is where a range of new technologies, which are changing the way payment cards can operate, comes in.”
They added that rather than “standing still, payment card manufacturers and other payments companies have created technologies which can make the card a more appealing payment method to the end user – including contactless payments to reduce time per transaction, biometric cards to increase security, metal cards to create a premium feel, and many others.”
Global spend on card technology by card issuers will “rise significantly from $9.8
billion globally in 2024 to $13 billion in 2029.”
- This growth of 39% will be driven by banks and other card issuers attracting new customers with differentiated card types. By using premium options such as metal or wooden cards, banks can differentiate themselves in the highly congested banking market.
- In an increasingly competitive banking market, card manufacturers must offer a broad range of solutions, which allow banks and other issuers to choose offerings that matches their wider positioning and objectives.
- Payment card shipments will stagnate over the next five years, falling by 2% globally between 2024 and 2029. As levels of financial inclusion significantly rise, fewer new accounts are being opened, hence reducing organic growth. However, the advent of new card types will help to offset this. For example, metal cards are expected to see an increase in annual shipments of 178% over the next five years, reaching almost 200 million annually by 2029.
- Banks need to create custom card programmes that can target specific user bases, in order to sustain their growth. For card manufacturers, this means both developing distinctive card offerings, and offering services such as modern card issuing platforms to provide a comprehensively effective user experience. If banks fail to introduce new offerings, they will rapidly lose out to more distinctive competitors.
