# How to calculate the number of credit-card accepting locations in a country?

Market sizing
New answer on May 14, 2022
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How would you assess the size of the credit card market in terms of acceptance?

My idea was to look at the number of point-of-sales (POS) terminals that accept CCs in the country and then determine the POS to store ratio (since a store can have multiple terminals). However, I don't have a clear idea of how to determine the ratio or come up with strong assumptions to back it up.

Am I approaching this question correctly? Are there better ways to approach this question other than using the POS terminal figures? for instance, looking at credit card transaction data (volume/value) or determining the number of service businesses in the country and then segmenting it according size of the business

would really appreciate any guidance!

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Hi there,

The “assumption” you can use is having been in a store. Most stores probably have one, with a good amount having 2, and not many having 3+. Therefore, you can pick an average of 1.5 or 2.

In terms of POS terminals, I'd rather estimate the # of stores or selling sites in the country.

Market Sizing Approach

It's very simple: Do the approach the is the easiest for you given the question.

Fundamentally, you need to take the approach that just makes the most sense in that circumstance. Quickly think about the key assumptions / numbers required and whether you 1) Know them or 2) Can reasonably estimate them. If you can, go ahead!

An Example

Here is a good Q&A great market sizing question asking to estimate # of electric charging stations in a city in 10 years:

https://www.preplounge.com/en/consulting-forum/how-would-you-solve-this-market-sizing-question-from-roland-berger-7631

This one could be answered top-down (as I did) by estimating population of the city, # of drivers/ cars, etc. etc.

OR, it could be answered bottom-up by estimating # of stations you see per block (or # of gas/petrol tanks), % increase this might be over time (or # of EV stations that would be needed per gas tank given EV stations take 10 times as long), and # of blocks you'd estimate the city to have.

Here's another market sizing (with answers + explanations) to get you started:

https://www.preplounge.com/en/management-consulting-cases/brain-teaser/intermediate/taxis-in-manhattan-market-sizing-229

Hello!

The key thing here is that you cannnot look up i the first place how many stores get them, that is part of the market sizing exercise!

Given that market sizing cases were the topic of many questions in this Forum, I developed a market sizing case, that you can find for free in PrepL´s library

https://www.preplounge.com/en/management-consulting-cases/candidate-led-usual-style/intermediate/market-sizing-new-startup-launch-baby-strollers-in-the-us-244

Let me know if you have any doubts with it, it contains a detailed explanation and methodology about how to solve this specific example, but you can extrapolate to many other market sizings!

Hope it helps!

Cheers,

Clara