A HUGE POTENTIAL MARKET
• The potential market for offering credit card authorization/check guarantee information services to retailers, financial institutions, and other companies is statistically awesome.
• Over 240 million consumers, using over 700 million credit cards, currently initiate over 7 billion transactions annually at an average cost of over 20 cents per transaction. This places the current credit card authorization services (CCAS) market potential at $1.5 billion in revenues.
• Another way to assess the same market is as follows: consumers currently spend some $300 billion for retail purchases utilizing credit cards. At an average of 3% of the charge amount, total expenditures for all credit card services, including authorization, are $9 billion. The portion related to credit card authorization is 20%; therefore, the 1985 market potential is $1.8 billion (the same order of magnitude as above).
• The gap between the current market and the potential market is very large. INPUT believes that less than 25% of all credit card transactions receive voice or electronic authorization.
• The potential market for check guarantee services (CGS) is even more impressive. Consumers currently write over 20 billion retail checks, the aggregate of some $500 billiion in total annual spending. Expenditures for CGS average 3% of the check amount; this places the potential market at $15 billion.
The gap between the existing market and the market potential for check guarantee services is even greater than that for CCAS. INPUT believes that penetration is currently less than 3%.