The global mobile card reader market expected to explode over the next few years. The latest estimate is nearly $30 billion by 2020.
According to the Global Mobile Card Reader Market for 2016-2020 from UK-based Technavio, to calculate the market size, the report considers revenue generated from the shipment of card readers, transaction fees, and other fees such as monthly fees charged by vendors.
The mobile card reader market in the Americas was valued at US$ 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.
The mobile card reader market in the Americas was valued at US$ 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.
The mobile card reader market in APAC was valued at US$ 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.
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