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Next-gen form factors now driving growth in payment cards

May 22, 2019

Despite near ubiquitous global uptake of the EMV standard, several factors are stimulating the payment cards market such as new banking clients, increasing wealth in developing areas, and contactless migration, according to ABI Research, a market advisory firm.

Other factors include new innovations in card form factors, such as metal cards, and powered payment cards that incorporate biometric sensor technology. The net effect is driving EMV payment card issuance from 3.18 billion in 2019 to more than 3.75 billion by 2023, a company press release said.

Interestingly, between 2017 and 2018, contactless migration slowed significantly, driven by stagnation in China, a key contactless market. However, other regional markets are set to reverse the decline in 2019, ABI said.

"A significant push by the Reserve Bank of India, such as the release of contactless tokenization guidelines, and India's Finance Ministry advising banks and financial institutions to begin issuing contactless-enabled credit and debit cards have already paid dividends," ABI Research Director Phil Sealy said. "The Indian market reacted well, particularly in Q4 2018, where it was estimated that near 10 percent of all cards issued were of the contactless variety."

In the U.S., migration to contactless is currently underway. This momentum is expected to continue, with U.S. issuers likely adopting a targeted approach for contactless migration, for instance, timing card migration in New York with migration of the city's transit system to accept open-loop payment credentials.

ABI Research forecasts that contactless issuance in the United States and India combined will grow from 200 million in 2019 to 609 million in 2023.