U.S. Chip Card Saturation Helps Bring Global EMV Growth Nearly to a Standstill
For past few years, China and the US, have been increasing the shipment of EMV chip cards but are now are starting to slow down.
Between 2012 and 2015 the EMV card shipment increased from 20% to a 35%. However in the last year, according to ABI research, chip card shipments calculated in a worldwide scale were under 3 billion, with only an increase of 1% compared to 2015.
“Overstocking” by issuers in the US market followed by lots of preparation for EMV is one of the main reasons for this small growth last year as well as the October 2015 liability shift, which drafted responsibility for spurious card fraud if merchants were not able to accept EMV cards. The consequence of this saturation was that EMV US shipments declined 19% in last year, resulting in only 530 million units shipped.
Situation for contactless EMV will be a disaster in an immediate future. Most EMV cards in the US interact with the chip while inserted into the chip reader for a couple of seconds. Transactions are faster with their tap-and-go capability. ABI research stated in a press release: “Overstocking proved a major barrier in 2016, having an additional knock-on effect on contactless-issuance expectations as issuers first focus on depleting existing contact card stock,”.
ABI also stated that China is contributing to worldwide slow growth because the EMV shipments lowered 3.9% in 2016. Due to the intention to boost digital banking inclusion and because their government is taking the action of taking the 500 – 1000 rupee notes out of the market.
The senior analyst in ABI Research, Phil Sealy declares: "Removal of the 500- and 1,000-rupee cash denominations directly led to a cash crisis, and as a direct result, increased demand for point-of-sale terminals and banking access, […]"A country once so reliant on cash was put into an instant state of shock, but the subsequent reaction will prove a positive one for all involved in the digital-payments market.".
Sealy predicts that chip card shipments in India will now flare in “valuable growth”, being one of the last markets moving to EMV.
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