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04/09/2009 -
As an increasing number of consumers are shifting to plastic payments instead of paper, the payment processing industry is expected to see significant growth in the coming years, wrote investment banking firm Signal Hill in an article in Barron's magazine.In fact, the growth in payment processing will not just be as a result of the increased spending expected during the economic rebound, but may actually be the cause of the economic recovery, said Signal Hill.
The firm predicted that the shift from paper to plastic payment is a "global secular trend" that will lead to "solid, double-digit growth" for the industry over the next three to five years.
The payment processing industry is expected to reach a compounded annualized growth rate of 12 percent from 2008 to 2012, a rate that will be even higher in emerging countries, Sand Hill reported.
"The secular trend has remained in place through the recent financial turmoil, and with recent macro trends stabilizing, revenue and earnings growth revisions may be biased to the upside for the first time in almost two years," the firm wrote.
A recent report from Packaged Facts found that the third party payment processing services market grew to $62 billion in 2008, and will see 9 percent to 10 percent annual gains through 2013.
