For all the talk around electronic payments becoming ubiquitous and the death of cash, there is still a long way to go before every single merchant accepts cards.
But this is changing fast as more businesses take the decision to enable consumers to make card payments.
The number of merchants that accept card payments will double from 46.6 million at the end of 2014 to 90.3 million by 2020, according to the Global Payment Cards Data and Forecasts to 2020 report from research and consulting firm RBR.
Not surprisingly, given the saturation in developed European and North America markets, the biggest growth can be expected from the Asia-Pacific region, where 42 per cent of all global outlets can be found.
In 2014, the number of merchant outlets rose 17 per cent globally, with Asia again leading the way. Here, card acceptance is filtering down from the large merchants in the big cities to smaller outlets and into the smaller towns and more remote regions.
The relatively untapped markets of India and China will be key for growth. “Large but as yet underdeveloped markets such as China and India provide significant potential for further growth, and the overall density of outlets is much lower than that of North America,” said RBR in the report.
Mirrors electronic payment growth
Card acceptance goes hand in glove with broader electronic payments, so it’s no surprise that the RBR report chimes with the findings of the 2015 World Payments Report, published last year by Capgemini and Royal Bank of Scotland.
This showed not only the global rise in non-cash payments – rising nearly nine per cent in 2014 to reach a total of 389.7 billion transactions – but also that Asia Pacific is where the main growth is being seen.
The report’s ‘Emerging Asia’ region experienced growth in non-cash payments of 21.6 per cent in 2013 and is expected to reach 27 per cent in 2014. China leads, with an increase in non-cash transactions of 37.7 per cent in 2013.
Visa and MasterCard still top, but for how long?
The RBR report notes that while Visa and MasterCard are still dominant – accepted at 78 per cent of merchants globally – it’s unclear how long they can sustain this market share as the bulk of future growth is coming in China, where they have a much smaller footprint of 29 per cent of merchants.
The rising star is China’s UnionPay, which is the fastest-growing scheme. It saw a 25 per cent rise in new outlets in 2014, with the bulk of these in its home market of China. However, UnionPay is arguably in a more fragile position in terms of its ability to maintain presence in various markets.
“UnionPay’s level of international acceptance is critically dependent on network-to-network agreements, most notably with Discover in the USA and JCB in Japan – any changes to these agreements, or the addition of any new agreements, would therefore have a major impact on the size of its overall network,” notes RBR.
None of this matters much to the consumer, though. Whether it’s Visa, MasterCard, Discover, American Express or UnionPay – the fact is that card acceptance is on an upward trajectory.