Telecom Lead Asia: RuPay in India and PBOC 3.0 in China are giving tough competition to both MasterCard and Visa, dominant payment brands, in the m-POS market.
ABI Research says alternative mobile payment developments including digital wallets and m- POS solutions are also challenging the dominance of both MasterCard and Visa.
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 will directly eat into the potential growth that the likes of Visa and MasterCard would have targeted.
However, international network branded cards will remain dominant since they have a strong global footprint which will prove hard to budge paired with improving product lines aimed at extending payment functionality and acceptance including mobile wallets and contactless cards.
ABI Research practice director John Devlin said: “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.”
ABI Research says shipments of m-POS solutions will increase from 6.2 million in 2012 to 21.2 million in 2018.
In the short-term, m-POS vendors do not provide a specific threat to international networks. In fact, the international networks are encouraging use to increase the likelihood that its branded cards will be used to make a payment.
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.
