The concept of in-person shopping may be back, but today's customers who prefer convenience have started embracing the sheer comfort and convenience of digital payments. The last few years have seen the rise of the concepts of buy now pay later (BNPL), masked cards, credit card payments, and QR code-based payments.
Credit Card Payment Industry Trends
According to the latest annual Payments Survey of the British Retail Consortium (BRC), over 90 percent of retail spending involved credit or debit cards.
A Forbes Advisor survey from February 2023 revealed that only 9 percent of Americans use cash to pay for their purchases. Credit and debit cards are the primary payment methods, with 36 percent of consumers using a virtual/physical credit card and 54 percent using a virtual/physical debit card.
In recent times, credit cards have become an integral part of modern-day finance, providing comfort, convenience, and flexibility to consumers worldwide.
In 2023, the global credit card market revenue soared to US$103.72 billion up from US$101.98 billion in 2022. The global Credit Card Payments market size is expected to reach approximately US$286.5 billion by 2030.
Growth Factors & Dynamics
With the increasing convenience of plastic money options such as credit cards and the rise of digital transactions, more and more consumers are appreciating and embracing credit cards as their preferred method of payment.
The easy availability of mobile wallets and the sheer ease of making contactless payments have further bolstered this shift. On top of this, top credit card processors and issuing banks are leveraging out-of-the-box, seamless, and secure solutions to satisfy the ever-evolving demands, preferences, and expectations of the financial landscape.
- Increased Digitization: The growing popularity of digital payment methods like credit cards is primarily influenced by aspects such as increased security, comfort, convenience, and speed. This along with contactless payments helps in the exponential acceleration of the credit card payments market.
- Cross-border transactions & globalization: The rise of international trade and the evolving connections between world economies have led to a massive surge in cross-border economic transactions, offering significant impetus to the credit card payments market.
- Initiatives for financial inclusion: Efforts by global governments to promote financial inclusion have greatly improved the count of digital payment options such as credit cards to underserved populations across the world, contributing to the overall growth and increasing penetration of the credit card payments market.
The trends and future of credit card payments market
#1. Contactless payments and mobile wallets
One of the biggest advantages offered by contactless payments is convenience. They allow customers to make quick, safe, and secure payments even when they aren't in the physical possession of their debit or credit cards.
Leveraging Near-Field Communication (NFC) technology and Radio Frequency Identification (RFID), contactless payments help customers avoid long queues. They also help reduce the barrier to entry for small businesses and startups.
Contactless payments and mobile wallets also facilitate a quicker and smoother checkout experience for the customers, hence enhancing the brand loyalty quotient.
#2. Digital-first approach
A customer-driven, futuristic digital-first approach is being followed by top credit card processors and issuing banks with the increasing prevalence of digital payments and online shopping. This includes seamless and state-of-the-art integrations with a wide range of eCommerce platforms, virtual cards, and online account management.
Today, many financial institutions are already offering virtual credit cards that help with online purchases, without exposing or risking the actual card details, to prevent identity theft and fraud.
#3. Open banking & integration
In recent years, global governments have focused on fostering open banking initiatives to enhance collaboration between FinTech companies and financial institutions. It is widely expected that users will gain 360-degree view and a holistic experience while accessing a comprehensive suite of financial tools in the months to come.
#4. Biometric Authentication
Biometric authentication methods such as facial recognition and fingerprint scanning are gaining immense popularity as the go-to standard for the security of payment methods. These advanced and out-of-the-box authentication techniques provide an additional protection layer while facilitating a seamless user experience.
The global biometric system market was valued at about US$43 billion in 2022. It is expected to double its size by 2027.
#5. Personalized incentives & rewards
Today, top credit card processors and issuing banks are finding innovative ways to improve customer loyalty. This is done primarily by providing personalized incentives and rewards to customers, based on their purchase habits. The future of credit cards will likely be accompanied by enhanced customization of incentive and reward programs to maximize customer satisfaction and engagement.
More and more companies and financial institutions will be leveraging technologies such as artificial intelligence, the Internet of Things, Big Data, machine learning, and generative AI for personalized customer engagement, inventory management, and predictive analytics. These technologies will help top credit card processors and issuing banks to make data-driven decisions proactively. Frictionless checkout experiences in the era of all things - digital and mobile - will be the talk of the town.
Conclusion
There is no denying the fact that credit cards have today become an integral part of our lives, providing speed, comfort, security, and convenience.
The confluence of multiple trends, the exponential pace of emerging technologies, the digitization of money, and generative artificial intelligence will greatly influence the growth of the credit card payments market in the near future. This also means that top credit card processors and issuing banks should find innovative ways to forge deeper, mutually rewarding, and sustainable customer relationships while instilling a greater sense of freedom, independence, and financial empowerment in the minds of consumers.
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