Fast-Growing Merchant Acceptance Could Entice More Acquirers to Look Abroad |
A number of US payments providers have expanded overseas in recent years and now more may have an incentive to do so if recent research showing robust growth in merchant acceptance is any indication The number of physical stores or outlets accepting payment cards worldwide reached 692 million last year up 13 from 2016 according to Global Payment Cards Data and Forecasts to 2023 a study released Wednesday by Retail Banking Research Ltd a London-based firm The report forecasts that number will grow to 1117 million by the end of 2023 for an 83 average annual growth rate The fastest-growing acceptance regions are Asia-Pacific and Eastern Europe which are also the least-developed for cards right now according to RBR The firm credits regulations from local governments for the growth Examples include India where starting this year regulators eliminated merchant-discount fees for at least two years on transactions of less than 2 000 rupees 28 at current exchange rates and are pressuring banks to work harder to recruit merchants Many of these institutions are state-owned RBR points out In the Czech Republic regulators mandate that merchants keep electronic records of transactions a function payment terminals make easier But regulations can be wider than local rules In the European Union for example regulation capped interchange rates in 2015 Rules like this encourage more merchants to begin accepting cards RBR says since the caps give them grounds to negotiate better rates with acquirers Other places that have placed limits on interchange include Brazil which introduced caps this year and Malaysia which put them in place three years ago according to RBR Financial-inclusion programs in some countries are also encouraging merchants to accept cards RBR says pointing to markets in the Asia-Pacific region Central and Eastern Europe and the Middle East As more consumers in these areas receive cards pressure builds on merchants to accept them US acquirers like Atlanta-based EVO Payments Inc are already looking to expand their international positions EVO which has had operations in place in Europe for several years is looking to expand in Latin America and in the Asia Pacific region chief executive James G Kelly said in August Europe looms large for EVO In the second quarter the region generated 69 of the publicly held companys 7713 million transactions European transactions grew 24 year-over-year to 5287 million while the North American transaction count came in at 2426 million up 5 the company reported But RBR analyst Daniel Dawson who led the research sounds a cautionary note for US companies As for overseas opportunities for US providers in theory increased acceptance should encourage companies to expand but it may be that merchants would be more likely to opt for local providers who they may already have a relationship with he tells Digital Transactions News in an email message I suspect it would depend on the deal the provider was able to offer eg what fees they would charge The report also cautions that wider acceptance isnt the case in all areas For example acceptance is still held back in places where basic infrastructure is missing because of large undeveloped rural areas RBR notes With additional reporting by James Daly