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STATE OF THE INDUSTRY REPORT
State of the Industry Report Recap 2024 In 2024 CMSPI’s Insights Team, alongside the Insights Advisory Council, released its inaugural State of the Industry Report. Each year the report will be updated and continue to evolve with the payments industry. From those aspiring to be payments experts to those who have years of experience, the State of the Industry Report provides actionable insights into global payment trends. Setting the stage for future editions of the Report, the inaugural edition includes five main sections:
• “A Primer in Payments,” covering fundamentals of the payments industry; • “Payments Supply Chain,” providing analysis of key players and their economics;
• “Understanding Ecommerce,” outlining the complex and unique challenges facing ecommerce retailers; • “Payment Methods Around the Globe,” profiling several of the world’s markets and their leading payment methods; and • “Payments and Regulations,” summarizing the most impactful payments regulations in key payments markets. Here follows a summary of the key findings of the first edition of the State of the Industry Report: Section 1: A Primer In Payments Payment Costs In The United States The weighted average cost of payments acceptance is increasing for U.S. merchants. CMSPI estimates that the averagecost of payments in 2022 in the U.S. has risen from 1.36% in 2009 to 1.70%. The two primary factors contributing to the increasing cost of payments include rising card fees and the changing payment mix. Merchants choose to continue accepting card payments given their ubiquitous usage amongst consumers regardless of rising costs. And while other payment methods are available, many also are proving costly for merchants. Section 2: Payments Supply Chain The key parties in the card payments ecosystem include issuers, payment networks, and acquirers. The payments industry can be highly profitable, partially the result of the competitive landscape. • The card issuing industry saw 35%+ operating margins consistently between 2019 and 2023. 1
• The average operating margin for the two largest card networks in 2023 was 60%. 2 • A general retailer in the U.S. receives an average net profit margin of 3.09%. 3
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