Industry operators face a massive level of competition from credit card issuers and banks
New York, NY (PRWEB) September 07, 2014
While consumer deleveraging has tempered credit card debt levels and the need for the industry's complementary services to a degree, the escalating acceptance of reward programs has driven growth for the Card Reward Program Services industry in recent years. Industry operators provide card-linked marketing programs and services to merchants, banks, card issuers and loyalty programs. Unfortunately for industry operators, aggregate household debt levels have declined slowly from 2009 to 2014 as elevated unemployment rates and stagnant per capita disposable income levels have forced consumers to focus on paying off their debt. Similarly, according to the latest available data from the Federal Reserve, domestic credit card balances declined in 2009 and 2010 before rising slowly in 2011 and 2012. Yet, despite the decreasing use of credit, consumers have increasingly demanded rewards program services from their loyalty programs, while both national and local retailers have increased their card-linked marketing efforts. Consequently, industry revenue is anticipated to increase at over the five-year period.
“The Card Reward Program Services industry operates with a low level of market share concentration,” says IBISWorld Economic Analyst Stephen Hoopes. Particularly given the growth in industry services related to local merchants, the majority of card reward program service providers focus their efforts on local and regional customers. Consequently, the industry has remained fragmented over the five-year period, despite the rapid growth of some national players. Moreover, given the industry's growth life cycle stage and low barriers to entry, the industry's market share concentration is anticipated to remain low over the five years to 2019.
Over the five years to 2019, industry revenue is forecast to rise. “Improvements in key macroeconomic variables and continued growth in the acceptance among downstream markets largely explain this growth,” says Hoopes. Yet, industry operators face a massive level of competition, primarily from credit card issuers and banks that develop and maintain internal card reward programs. Moreover, while credit card issuers have focused on wealthier consumers that tend to spend more on their cards, the anticipated saturation of this market is forecast to dampen the industry's revenue growth possibilities.
For more information, visit IBISWorld’s Card Reward Program Services in the US industry report page.
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IBISWorld industry Report Key Topics
The Card Reward Program Services industry includes operators that provide card-linked marketing programs and services to merchants, banks, card issuers and loyalty programs.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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