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Asia-Pacific overtakes North America to become the largest EFTPOS region

New research from London-based strategic research and consulting firm RBR shows that there were 61 million EFTPOS terminals installed at 40 million merchant outlets around the world, at the end of 2013. This represents a 12% increase on 2012.

Asia-Pacific’s installed base expanded by 30%, overtaking North America to become the largest region for EFTPOS terminals in 2013. The rapid growth in Asia-Pacific is attributable mainly to the growth of the Chinese terminal base, which increased by 49% during the year.

Other findings of the study include the increasing take-up of mPOS solutions in many markets as well as impressive growth in the UnionPay, JCB and Discover acceptance networks.

Asia-Pacific continues to have the lowest EFTPOS terminal density and card usage

Despite now having the largest terminal base, Asia-Pacific continues to lag behind the other regions in terms of terminal density, with 7,000 terminals per million adults compared with a global average of 14,000. North America and western Europe remain the regions with the highest densities at 60,000 and 29,000 respectively. They are also the regions with the highest usage per card, both with around 50 purchases per card per year, compared with a global average of 20. Unsurprisingly, these markets saw low growth rates in the number of terminals in 2013, both at only 2%.

Asia-Pacific represents 36% of card-accepting outlets worldwide. This is higher than its 21% share of volume of card payments. This is because in many Asia-Pacific countries, cards are less frequently used for low-value purchases: on average cards in this region are used for just eight purchases per year, the lowest worldwide. In contrast, North America and western Europe account for a combined 45% of outlets, which is lower than their 63% share of volume. The high usage levels in North America and western Europe are attributable not only to widespread acceptance, but also consumers’ willingness to use cards for everyday purchases.

Distribution of Merchant Outlets by Region, 2013

A pie chart showing Distribution of Merchant Outlets by Region, 2013

Distribution of Merchant Outlets by Region, 2013

Source: Global Payment Cards Data and Forecasts 2013-2019 (RBR)

mPOS solutions offer potential for further card acceptance expansion

mPOS, whereby cards are accepted at readers attached to a smartphone or tablet, is one means of extending card acceptance to a greater number of merchants. The technology is expected to be widely adopted as it allows small businesses and sole traders to accept cards with lower transaction fees. The higher cost of traditional terminal rental is also likely to increase the appeal of mPOS devices – this was highlighted in research in Poland, for example.

There are numerous examples of mPOS devices being implemented in mature markets. US providers, for example, are offering such solutions to traditionally underserved micro-merchants that attract fewer than 250,000 transactions per year. In 2013, Nordic payments provider, Nets, in partnership with Ingenico launched new mPOS solutions for small merchants in Denmark, and during the same year Nordea selected the Swedish payments company iZettle to provide mobile mPOS solutions to its merchants. iZettle has also partnered with the co-operative banks in Germany.

mPOS is also being rolled out in less mature markets. In 2013, MasterCard, in collaboration with Equity Bank, introduced an mPOS solution in Kenya which allows GPRS-enabled phones to be used as card‑accepting devices. Payment cards can also be accepted at more than 10,000 mobile devices in Argentina through LaPOS Celular, an initiative spearheaded by Visa.

There are indications that mPOS solutions could help to improve card acceptance levels significantly in India. The mPOS provider Ezetap signed a deal with the State Bank of India (SBI) in 2014 to deploy 500,000 mPOS devices by 2019. The huge scale of the project is put into context by the fact that India’s EFTPOS terminal installed base in 2013 stood at just over one million units.

UnionPay, JCB and Discover close the gap on Visa and MasterCard

Visa and MasterCard are on a par in terms of global merchant acceptance, each being accepted at 33 million merchant outlets worldwide, or 83% of the 40 million card-accepting outlets. Acceptance of the schemes is not universal in several markets, most notably in China, where they can only be used at 28% of outlets, and in several western European countries where some merchants only accept the domestic scheme (which is generally lower cost to accept). In many cases the domestic scheme is dual-badged with an international scheme, with the former normally used for purchases within the country of issuance.

UnionPay, JCB and Discover all saw strong growth (between 18% and 21%) in the number of outlets accepting the schemes in 2013. This is primarily a result of the continued rapid expansion of the Chinese acceptance network, where by virtue of UnionPay’s agreements with JCB and Discover, all three schemes are accepted universally in the country. These schemes closed the gap on Visa and MasterCard, which both saw their number of acceptance outlets rise by a comparatively modest 9% over the year.

Number of Merchant Outlets by Scheme, 2013 (millions)

A bar chart showing Number of Merchant Outlets by Scheme, 2013 (millions)

Number of Merchant Outlets by Scheme, 2013 (millions)

Source: Global Payment Cards Data and Forecasts 2013-2019 (RBR)

UnionPay will build card acceptance in Asia-Pacific and beyond

As the acceptance network expands in Asia-Pacific (especially in China, which accounts for 55% of Asia-Pacific’s EFTPOS terminals), so that the region accounts for an ever greater proportion of card‑accepting outlets, UnionPay, and also thanks to network-to-network agreements, Discover and JCB, will be accepted in a higher proportion of outlets worldwide. RBR projects that 50% of card-accepting outlets in 2019 will be in Asia-Pacific, up from 36% in 2013.

Moreover, UnionPay acceptance is rising in other regions following deals with major acquirers. The scheme is now accepted at 57% of merchant outlets worldwide compared with 47% in 2010, and this is likely to increase further over the coming years.

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