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finance & strategy
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Mobile may be getting all the attention—aside from EMV—but plastic’s place in payments is firm.
It may seem as if card manu- facturers would view the push
for mobile payments as a threat to
their business models. It’s true that global card unit growth was up only 1 percent in 2014, according to the latest data from the International Card Manufacturers Association (ICMA). However, when you look at dollar growth for the same period, sales were up 5.6 percent, largely because of more expensive chip cards, which continue to drive global growth. Nearly 32 percent
of all cards now have a chip, which represents 84.9 percent of the value of all manufactured cards.
The outlook for 2015 and beyond is for continued robust global dol- lar growth and modest card unit growth, the association predicts.
“Plastic cards will remain rele- vant for many years even as some of the new payment and trans- action technologies compete
for a position in this highly struc- tured market,” says Al Vrancart, ICMA industry adviser and founder emeritus. “Most mobile applicat- ions require a companion card
as an alternative or backup,” he says. “Demographic preferences suggest that traditionalists and boomers will continue to support plastic cards while millennials will readily accept the various new technologies. Also, remember
that everyone does not have
a smartphone.”
Identification cards with soph- isticated security features, such as biometrics technology, are
preferred to access secure systems compared with mobile applications that have potential security issues, Vrancart con- tinues. And, in the gift card mar- ket, physical plastic cards—with myriad design options—are not losing ground to e-gift cards even as virtual gift cards grow. “Consumers want that impact
or ‘wow factor’ of having a packaged decorative gift card
in hand for that special occasion,” Vrancart maintains.
In this special section, you’ll find out about how cards became the go-to form factor (see sidebar at right) and hear from several card manufacturers about how they’re staying relevant in an increasingly mobile world.
Card images are finalists and winners in the ICMA Élan Awards for Card Manufacturing Excellence. SOURCE: International Card Manufacturers Association