Retail in Asia

In Trends

Payment networks facing competition from domestic brands, m-POS

International payment brands such as MasterCard and Visa are facing increasing competition from newly established domestic networks (most notably RuPay in India and PBOC 3.0 in China) and alternative mobile payment developments, including digital wallets and m-POS solutions, ABI Research said.

The research firm also forecasts that RuPay and PBOC 2.0/3.0 cards will have the largest market impact, accounting for 2 percent of all cards in circulation in 2013, increasing to 21 percent in 2018. This is expected to directly eat into the potential growth that the likes of Visa and MasterCard would have targeted.

ABI Research, however, believes that international network branded cards will remain dominant as they have a strong global footprint and improving product lines aimed at extending payment functionality and acceptance.

“Any new domestic network or card has to be more than a simple payment card,” said practice director, John Devlin. “With government support, the new domestic networks can focus efforts on targeting the unbanked to bring up the level of financial inclusion, as road mapped within India’s RuPay initiative. This strategy focuses on the untapped market yet to be affected by international networks and local banking practices.”

Meanwhile, shipments of m-POS solutions are expected to increase to 212.2 million in 2018 from 6.2 million in 2012.

Within the study, ABI Research took a closer look into the m-POS market, forecasting shipments of m-POS solutions increasing from 6.2 million in 2012 to 21.2 million in 2018.

"It is in its early days and many may fall by the wayside but the real threat comes when the successful m-POS solution providers follow the PayPal model and enable their own digital wallets and P2P transactions which could completely cut the international networks out of the equation,” said Research analyst Phil Sealy.