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Global Payment Industry Analysis

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Global Payment Industry Analysis

This essay will focus on the global cards payments industry where Visa and MasterCard operate.

Introduction

VISA and MasterCard belong to the non-cash business of the global payments industry, an economic sector that is strongly affected by technology and innovation due to the fundamental shift from paper based payments (cash/checks) towards paper-less payments (credit cards, mobile payments, etc).

This shift is considered almost irreversible as consumers appreciate more and more the convenience, practicality and security of the electronic money. Similarly for corporations the use of paper-less money brings uncontestable benefits in terms of management, efficiency and security of money flows.

The global volume of non-cash transactions is approximately 260 billion (2009 data) and is growing globally at an average rate of around 7%, with Asia-Pacific and Emerging Markets growing a higher rate than USA and Europe.

USA represents without any doubt the largest non-cash payments market in the world (40%) followed by the Europe (21%) and mature Asia-Pacific (all together 83%).

In terms of future trends, non-cash payments are expected to grow at a very high rate in (37%) in CEMEA (Central Europe, Middle East, Africa) followed by Asia (23%, excluding China and India), BRICs and other mature economies in Asia-Pacific (14%), while Europe and North America will progress with much lower rates.

For what concerns cards sub sector, we assist at a global level to a substantial growth in the use of credit and debit cards (9.7%) as they remain the preferred non-cash payment instrument globally (avg. 40%).

More in general we notice that the average value per card transaction is decreasing in most markets as cards are becoming more and more popular for daily expenses.

E-payments and m-payments account for less than 10% of

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