Investment activities in the global cards and payments industry recorded deals above US$49billion to Feb 2014.

The increased revenue potential in the cards and payments sector has seen a surge in investment deals. E-commerce and online payments accounted for 26% of deals made in the cards and payments industry to Feb 2014, while venture capitalists funded 70% of e-commerce and related investment deals.

The increased revenue potential is due to the low cost of innovative payment solutions and the burgeoning markets for digital payments which has attracted the interest of investors.

Consumers’ growing preference for mobile devices, such as smartphones and tablets also plays an important role in attracting outside investment into the industry. Increasing internet penetration encouraged service providers to build payment solutions based around mobile devices. To 2014, mobile payments overall accounted for 22% of all investment deals made in the industry and this number is expected to increase.

Another area of investment in the industry is card processing, which accounted for 19.5% of all deals and is one of the industry’s most invested areas, with focus shifting towards processing payment cards through mobile point of sale (mPOS) terminals. Innovations such as dongle and Bluetooth-based card readers, which allow payments to be accepted via smartphones and tablets, are available at a fraction of the cost of traditional POS terminals

Among the various investment types - acquisitions, asset transaction and venture financing - venture financing leads investment activities accounting for 59% of all deals made to Feb 2014. While the largest investment recorded was US$200million, close to 80% of venture capitalist funding was below US$30million. Unlike acquisitions and asset transactions, which involved single investors, venture financing deals registered participation from more than one investor.

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Gurveer Vasir
Marketing Executive

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