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North America Merchant Acquiring

26 August 2020
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Verisk Financial Research's latest regional merchant acquiring report looks at industry trends and developments in the world's oldest cards market: North America.

Acquirers and processors continue to post impressive growth in revenue, far exceeding growth in consumer spending. Although margins are thin and shrinking in the large merchant segment, the overall payments pie continues to expand as the evolution of technology encourages cash and cheque conversion across the board.

North America acquiring – volume growth

Card spending has grown at a CAGR of around eight per cent in North America since 2013. Naturally, this closely matches the growth in the United States, which accounts for the majority of regional spend. Growth in Canada has been lower, at just under five per cent, while Mexico, as an emerging market, has posted impressive overall growth in card spend of 16 per cent per annum. Puerto Rico has also seen steady growth in card volumes despite well over a decade of recession.

Several factors are driving volume growth for acquirers. New customer acquisition channels and technology such as mPOS have broadened the addressable market for acquirers, enabling continued volume growth even in developed markets like Canada and the US. With more businesses going digital and the pandemic accelerating cash conversion, this process should continue in the coming years.

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Meanwhile, contactless technology is encouraging card use for ever-smaller transaction sizes which were traditionally settled in cash. Contactless is under-penetrated in North America; only Canada has embraced the technology to date. With the rollout finally underway in America, there should be a boom in small-value card payments in the coming years.

While much of the potential for B2C card payments has been realised, the same is not true in other categories. Areas such as small-business payments and disbursements are relatively under-penetrated and hold plenty of potential to drive future growth in volumes through card networks. With these areas being developed, there is scope for continued strong growth in volumes for acquirers.

North America acquiring – revenue growth

Although the traditional POS still accounts for the majority of card volume, much of the growth in mature markets such as the US and Canada is coming from e-commerce and other tech-enabled channels. This is especially true in terms of revenue.

Volume growth alone does not guarantee success for acquirers. Acquirers focused on volume with a high proportion of large merchants need massive scale to create the efficiencies which drive revenue growth. This explains much of the consolidation at the top end of the market.

Covering the United States, Canada, Mexico and Puerto Rico, Merchant Acquiring North America provides essential business intelligence on the region's payments landscape – plus country-level insight underpinned by extensive market data. Highlights include:

  • Key trends in card acquiring across the region with up-to-date commentary and insights on four countries, including acquiring risk insight from Verisk Financial G2
  • Profiles of the leading acquirers and processors in each market
  • Detailed data, including card penetration, market sizing, market shares for leading acquirers and merchant service charges.

The North America Merchant Acquiring report is available to order now.