The US remains a strong proximity payments market, particularly in terms of payment cards. The market is still recovering from the effects of the 2008 financial crisis, however, and this combined with the stringency of new regulation is proving problematic for issuers and the industry in general. The market is highly innovative, but most of this innovation comes from outside the banking sector.
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How has the US proximity payments market developed in the last year and what can be expected in the future?
How will disruptive factors such as the Durbin Amendment, the CARD Act, and the move to EMV affect the market?
What do consumers think of contactless, NFC, and prepaid, and is the time right to invest in these platforms?
How do consumers use their payment tools in the US, and how has this changed in recent years?
The US payment cards market has contracted over successive years since the 2008 crisis, negatively impacting the pay later card market in particular, but the debit and prepaid markets have experienced growth. Consumers are borrowing less on credit cards, although spending through all payment card types remains relatively strong.
The regulatory landscape in US proximity payments has changed rapidly since the 2008 crash, and recent laws such as the CARD Act and Durbin Amendment are still having disruptive effects on the market. The move to EMV technology and merchant litigation against the major card schemes compound the regulatory difficulties in the country.
Contactless cards have a very limited presence in the US, although the potential market is estimated at $439.8bn. The mobile proximity market is more developed, but the market has not yet reached a tipping point: consumer adoption is reportedly at 19%.