Electronic payment through financial cards and payment systems is on the rise across the world. On account of the convenience and higher availability offered, financial cards and payment systems have witnessed higher penetration in numerous economies across the world. Traditional payment systems such as cash payments, demand drafts and other payment certificates have become obsolete due to technological advancements in financial cards and payment systems. Through financial cards and payment systems, numerous financial transactions can be executed between entities located anywhere in the world. Financial cards including debit cards, credit cards, charge cards, ATM cards, fleet cards and stored value cards are widely used for different types of financial transactions. Other types of financial cards including Scrip, gift cards and electronic purse have gained popularity and serve to a very niche market. Financial cards are deployed using numerous technologies such as embossing, magnetic stripe cards, smart cards, proximity cards and re-programmable magnetic stripe cards. Magnetic stripe were highly adopted in the global credit and debit cards due to inefficiencies in the embossing technology.
However, due to factors such as magnetic interference and possibility of damage to the magnetic stripe, the magnetic stripe cards were replaced by other technologies such as smart cards and proximity cards. The smart card technology uses an integrated circuit chip (ICC) which can process financial transactions with higher efficiency as compared to magnetic stripe cards. Proximity cards are contactless integrated circuit devices which make use of radio frequency identification (RFID) technology and are powered by resonant energy transfer. Proximity cards are gaining immense popularity in private payment systems and public transit payments. Financial payment systems include various types of payment methods such as bank transfers, E-wallets, direct debit and other mobile payment solutions. Users across the world make use of such payment systems to electronically transfer cash directly to merchant’s account. Unlike financial cards where the payments takes place through point of sale (PoS) systems, payment systems enable users to authenticate and execute financial transactions over the internet.
One of the major factors driving the growth of financial cards and payments market is the rise of ecommerce. Increasing penetration of online stores for numerous products and services has offered higher accessibility and availability of market places to consumers. Such factors have driven the growth of financial cards and payments systems across the world. Moreover, benefits such as convenience, security and privacy have further driven the growth of financial cards and payments market. In addition, ongoing collaboration between numerous payment industry participants including merchants’ banks, card issuers and card association network providers has led to development of comprehensive financial payment and transfer solutions.
Increasing penetration of ecommerce and mobile phones across the world has made the financial cards and payment systems lucrative in recent years. Numerous players in these markets seek to reap maximum profits in the developing economies especially in countries such as Brazil, Russia, India and China (BRIC). Some of the key financial cards and payment system providers include Visa, MasterCard, PayPal, RuPay, Amazon Payments, Google Wallet, Apple Pay, PayPoint, TransferWise, DigiCash and 2C2P.
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