In this report, Technavio covers the present scenario and growth prospects of the global mobile card reader market for 2016-2020. To calculate the market size, the report considers revenue generated from the shipment of card readers, transaction fees, and other fees such as monthly fees charged by vendors.
“A major selling point for vendors in the market other than the simplicity of card payment processing is the reduced transaction costs. A majority of vendors in the market only charge a fixed transaction fee for every transaction. The fee varies for swipe and chip and pin, but the average fee per transaction was USD 2.90 in 2015. This replaces the traditional method wherein merchants are charged a monthly service fee as well as a cut on every transaction. Such complexities in payment transactions are now reduced with the help of solutions provided by vendors,” said Sunil Kumar Singh, one of Technavio’s lead industry analysts for computing devices research.
Geographical segmentation of mobile card reader market 2015
Source: Technavio research
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Americas: largest market for the mobile card readers
The mobile card reader market in the Americas was valued at USD 1.22 billion in 2015. In terms of geography, a large number of customers are based in the Americas. Multiple market leaders such as Square, PayPal, PayAnywhere, and Verifone are located in the US, which is one of the main reasons for why a large number of sellers use mobile card readers in this market. Also, the percentage of sellers that accept card transactions using any form of POS terminal is low at 22.5%, which provides a large market for vendors in this region.
Another major factor is the fraud liability shift policy in the US, which states that an entity with old technology in terms of payment processing will have to bear the cost of fraud. This means that sellers are liable for fraud that occurs when they process a card with magnetic stripe technology because the card can be more securely processed with a chip-and-pin reader. Hence, vendors, especially in the US, are purchasing new mobile card readers or updating their existing PoS terminals to mobile card readers, which offer the latest technologies.
EMEA: second largest market for the mobile card readers
The mobile card reader market in the Americas was valued at USD 1.22 billion in 2015. EMEA was the second-largest contributor in the market, with Europe implementing the highest standards of payment. The European Union has adopted EMV standards and has set greater payment standards compared to other regions. The Council of the European Union announced in March 2015 that the transaction fees per credit card swipe have been reduced. Initially, merchants had to pay 2%-4% for every transaction, but that is now fixed at 0.2% on debit cards and 0.3% on credit cards. This will relax the high transaction fees charged by companies such as Visa and MasterCard and banks, encouraging merchants and consumers to adopt card transactions.
Mobile card readers market in APAC
The mobile card reader market in APAC was valued at USD 0.28 billion in 2015. APAC is the fastest-growing market for mobile card readers. It had a low adoption rate of mobile card readers in 2015, so multiple local and regional vendors started to market their products aggressively. It also has the largest number of SMEs. The market potential here is higher than in other regions, but it is a complex market to penetrate. The diversity in this region is vast, which makes it difficult for established global vendors to tap local merchants and sellers. However, PayPal and Square have managed to acquire a significant number of sellers in Japan.
Browse related reports:
- Smart Card Market in the APAC Region 2015-2019
- Smart Card Market in Europe 2015-2019
- Global Contactless Smart Card Market 2015-2019
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Technavio is a leading global technology research and advisory company. The company develops over 2000 pieces of research every year, covering more than 500 technologies across 80 countries. Technavio has about 300 analysts globally who specialize in customized consulting and business research assignments across the latest leading edge technologies.
Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.
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