The Market for Card Management and Transaction Processing Technologies: A Dozen Observations

by Zilvinas Bareisis, October 3, 2014
Industry Trends
Global

Abstract

Celent sought to understand the landscape of card management and transaction processing (CMTP) vendors and service providers. This report offers a dozen observations into the market.

The cards and retail payments market has changed beyond recognition over the last three to five years. Growing transaction volumes and proliferation of new products, such as various digital payments, are putting significant strains on legacy cards management and transaction processing systems. Regulation, growing security concerns, and pressure on margins exacerbate these challenges and force issuers to revisit their legacy infrastructures.

At the same time, new issuers, such as challenger banks, as well as nontraditional competitors in the payment space, drive up demand for CMTP technologies.

In the report The Market for Card Management and Transaction Processing Technologies: A Dozen Observations, Celent summarises its perspectives on the market trends. The report addresses the demand drivers, trends in vendor offerings, clients’ buying decisions, and a few other topics.

“We expect the demand for card management and transaction processing technologies to continue to grow,” says Zilvinas Bareisis, a senior analyst with Celent’s Banking practice and author of the report. “Digital, regulation, and security and risk management are both the biggest challenges and opportunities for the industry. Banks must ensure that their CMTP platforms are robust and fit to compete in the complex and ever evolving world of retail payments.”

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is part of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

Introduction

3

Research Approach and Participants

4

Demand Drivers (Why?)

6

 

External Factors

8

 

Internal Factors

9

 

New Clients

10

Vendors Offerings (What?)

12

 

Differentiation on Core Functionality

12

 

The Rise of Payment Services Hubs

13

 

Focus on Complete Solutions and Operating Model

14

Buying Decisions (How?)

17

 

Evolution Vs. Revolution

17

 

Packaged Software Vs. Outsourced Processing

18

 

Vendor Selection

22

Other Observations

23

 

Market Consolidation

23

 

Pricing and Other Commercial Arrangements

23

 

Key Challenges

26

Path Forward

29

Leveraging Celent’s Expertise

30

 

Support for Financial Institutions

30

 

Support for Vendors

30

Related Celent Research

31

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