As CI gets ready for another busy year covering the card payments market, there are already signs that this year will be another fascinating one for the sector. Douglas Blakey makes his predictions for the year ahead, covering government regulation, delinquencies and the death (or not) of cash
2014 promises to be another fascinating year to cover this sector.
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As it is traditionally the time of the year for predictions, here are some more.
Political interference will not go away.
Expect renewed calls from the Left to curb banker bonuses.
There is even talk of the UK Labour Party seeking to impose some artificial cap on bank market shares.
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By GlobalDataAll very populist good headline grabbing stuff. It will not of course happen but no matter.
The emphasis on credit-granting institutions to raise yet more fresh capital will decline and so an increasing number of banks will be able to increase lending to consumers.
Favourable macro-economic conditions will result in a decline in delinquencies.
As flagged up by the excellent FICO/EFMA Credit Survey released in early January, only 18% of respondents in the UK project an increase in credit card delinquencies and in overdrafts.
The same survey highlights an additional welcome development: credit demand is expected to rise along with credit provision, making the lowest "credit gap" forecast since FICO.
Banks will continue the trend of recent years to claim to be increasingly customer-centric.
It will become increasingly difficult to avoid daily news releases and pitches for features relating to Bitcoin.
More and more banks will come to realise that their business ambitions are hampered by over-reliance on ageing legacy systems.
The so-called Death of Cash will be increasingly prophesied by callers to this office, in blissful ignorance of the stats showing cash in circulation continuing to rise in Europe and the US.
In fairness, there will also be ample evidence of strong cash displacement.
Contactless use will grow impressively, albeit from a low base, but not to the extent forecast by its more enthusiastic evangelists.
Mobile wallets will enjoy a bumpy ride: the New Year kicking off with news of O2 axeing its service comes as no surprise.
Regulation will continue to provide an enviable source of fee revenue for the leading consultancies and blue chip legal practices.
PSD and interchange alone will be among the most heavily studied areas for regulation.
In the UK, the expected launch of Zapp will be a fascinating topic for discussion during 2014.
Will Zapp succeed in signing up a sufficient number of banks and retailers?
Probably yes, but do not expect to see Barclays among the early partners.
There will be yet more payments start-ups, a large number of whom will burn through their angel investors cash in no time.
Banks will continue their successful defence against potentially innovative disruptors in the payments sector.
Meantime, Visa and MasterCard will continue to go from strength to strength.
MasterCard shares soared by around 60% in 2013. It raised its dividend by more than 80%.
The major card schemes will continue to cash in on the accelerating convergence of physical and digital payments.
They will continue to eye up acquisition opportunities in particular in the rewards, loyalty and processing space.
Overall, there are grounds to be optimistic about the year ahead; however it pans out, it will not be boring.
