Total spending on general purpose credit cards will likely approach $3.0 trillion in 2015 and may top $4.0 trillion by 2019, according to CardData. Next year will be a major transitional period as the U.S. goes EMV and global NFC takes shape.
Mercator Advisory Group released a series of Viewpoints that provide insights into trends and new themes on the horizon that will have a significant impact on the payments and banking industry, consumers, and the ways companies do business in 2015 and beyond.
Next year promises to be a year of debit card rebuilding. Astute debit issuers will focus on adding value-propositions that provide cardholders with safety and security combined with enhancements that promote growth in card usage.
The U.S. credit card industry picked up steam in 2014. Consumer credit spending improved, but growth remains strongest in the small business and commercial card product segments. Mercator anticipates another strong year of growth in 2015, with total spending on general purpose credit cards increasing 10% to approximately $2.9 trillion.
The coming year will require prepaid providers to bring teams together from regulatory compliance to technology to build a winning strategy. These teams will involve both internal employees and partners from across the value chain. 2015 will be a year when everyone needs to make sure that they have the right people and the right partners so that they can execute the right plans.
2015 will be a watershed year for emerging payment technologies in the U.S. The transition to EMV, Apple Pay, and the median age of millennials inching higher (27 next year) will finally jump start mobile payments at the point of sale. Migration to EMV is motivating savvy merchants to reimagine the whole retail experience using BLE, NFC, QR codes, real-time analytics, and native apps to compete with online retailers.
Next year promises be an exciting year for banking channels. Projects that were important but unfunded or underfunded are moving forward thanks in part to the reallocation of budgets from legal and compliance efforts nearing completion, but mostly thanks to compelling business cases for wooing customers and finding ways to provide an outstanding customer experience.
The momentum commercial payments gained through partnerships and acquisitions in 2014 will continue in 2015 as providers and banks compete for share of wallet of corporate clients. As corporates seek more efficiency through actionable transaction data, players need to focus on execution to deliver solutions effectively. This is a crucial time for all players in the space, and the perception of corporate payments being far behind consumer payments should not hinder their finally thinking about innovation.
Looking to 2015, a few themes are truly global in the payment industry around the world. One is consumers’ continued shift from cash and checks to electronic payment instruments like debit, credit, and prepaid cards. A related theme is their increasing preference for making transactions online and via mobile phone. Robust gains in 2014 in payment card transaction volume, e-commerce transactions, and mobile payments, as shown in various markets reviewed in our research, are likely to continue.
Credit Card Spending
2014: $2.9 trillion
2015: $3.2 trillion
2016: $3.5 trillion
2017: $3.8 trillion
2018: $4.1 trillion
Download Mercator Advisory Group’s 2015 Payments and Banking Outlooks for free here
For more data on Payments Future access CardData®. For information and commentary on Payments Future visit the searchable CardFlash® Library of more than 58,000 articles published since 1995. RAM Research® forecasts on Payments Future are available exclusively through CardWeb.com.®