10 billion milestone passed
EMVCo just announced that at the end of 2020, over 10.8 billion EMV chip cards were in global circulation, an increase of nearly 1 billion compared to the previous year. For a world population of 7.8 billion humans, this shows an average of 1.38 card per human.
Also, according to EMVCo, 86% of all card-present transactions conducted globally are using EMV chip technology, a milestone that represents a major achievement for the secure transactions industry.
The COVID-19 pandemic has played a role in this growth as, due to health concerns, many users and merchants have been willing to shift away from cash. Consequently, hybrid cards, contactless enabled chip cards, have benefitted even more from this evolution.
EMV card penetration greatly varies between world regions: from 312 million cards in Africa and the Middle East, a mere 0.20 card per person rate, to 1,074 million cards in the US, or 3.25 cards per person. In Europe, Latin America, Africa and the Middle East, more than 95% of transactions are conducted using EMV chip technology.
So the EMV card has won! But at the same time, numerous other technologies are emerging. New features are integrated into cards, such as variable CVV2 or fingerprint sensors. Visa and MasterCard, the only global payment networks have so far resisted to attempts to dethrone them, be it by China UnionPay (and also Alipay and WeChat), RuPay (India), Mir Payment System (Russia), or others… The next challenger for classical payments is EPI, European Payment Initiative (formerly PEPSI), called “a truly European solution,” which aims at making all intra-European transactions be managed and processed exclusively in Europe without Visa or Mastercard intervention.
At the same time, the emergence of CBDCs (Central Bank Digital Currency), may well change the global payment landscape. Among the most advanced, the Chinese Digital Yuan will allow the Chinese government to build a completely integrated payment system. Many other projects are under way in various parts of the world while the ECB (European Central Bank) is taking a slow path to the topic.
However, even if initiatives abound, the European market is quite often seen as conservative. This trend is confirmed by the “Digital and Card Payment Yearbook” recently published by Payments Cards & Mobile. The European card market is in robust health, they say, and mobile wallets may at most represent 5% of all electronic transactions by 2025. However, they add that disintermediation by account-to-account IBAN transactions (Instant Payments) might become a threat to existing payment infrastructure.
Contactless penetration is strong in Europe, where over 75% of in-store payments are now contactless, according to Visa. This can clearly be seen as a consequence of the health crisis, along with efforts made by the industry to support contactless developments: the share of Visa transactions that are contactless have more than doubled year-on-year. The shift has also been facilitated by increases in the contactless payment limit to EUR 50 (GBP 45 in the UK).
Our industry is now mature, it never stops creating new technologies, new usages, new organizations …. However, it plays on a vast world scene where payment systems are often one of the instruments of politics, especially imperialist ones.