Global cards from the four U.S.-based payment card networks expanded by 286 million credit and debit cards-in-force (CIF), over the past twelve months. Visa [V], Mastercard [MA], American Express [AXP], and Discover/Diners [DFS], global payment cards, including credit, charge, debit and prepaid products, grew 5.2% year-on-year (YOY) in the third-quarter (3Q/19).
Growth has been eroding the past five years, following an uptick in 2018 driven by U.S. and international debit and prepaid products. However, this year, a sharp decline in Visa and Mastercard U.S. credit cards, and a slight pull-back in international credit and charge cards has offset the gains in debit cards, notes Robert McKinley, Senior Analyst for CardData, CardFlash and CardTrak.
Among the four networks all the significant growth is driven by Mastercard U.S. credit/charge cards and international debit/prepaid cards, up 10% and 13%, respectively. American Express continues to struggle with new account acquisitions and introduced new or refurbished products in the U.S., U.K., and Canada, during second half of 2019. AXP also launched a major retail acceptance merchant campaign in U.S. during December.
Global Cards Projections
There is speculation of a merger of American Express and Discover in 2020. A possible combination would enable both companies to fully reach a broad credit spectrum in the U.S. from credit scores above 660. New speculation suggests an additional acquisition of a sub-prime specialist in scores below 660 would compete vigorously against Mastercard powerhouses such as Capital One [COF].
Currently, American Express U.S. high-end credit/charge rewards/perks products are impacting enhancement revenue by market leader Chase [JPM]. Internationally, it is unclear how a suggested combination would benefit both parties.
Based on the current five-year CAGR and projected GDP, the total number of global cards-in-force of credit, charge, debit and prepaid products will likely rise to 7.5 billion by 2025, approaching the 7.0 billion milestone in 2023. In 2020, the figure will easily top 6.0 billion.
Peer Group Performance
The payment networks reported 5762 million CIF in 3Q/19, compared to 5688 million for 2Q/19, and 5476 million for 3Q/18. In the third-quarter of 2015 the major four networks posted 4134 million CIF.
Global payments cards increased by 6.1% YOY in 2018, 5.5% YOY in 2017 (excluding Visa Europe), 5.5% YOY for 2016, and 5.4% for 2015. Including Visa Europe the 2016 YOY growth rate is 17.3%.
The compound annual growth rate (CAGR) for global payments is running at 8.45%. Excluding Visa Europe cards following the 3Q/16 merger of Visa and Visa Europe, the five-year CAGR is 5.45%.
Visa and Mastercard global credit/charge and debit/prepaid CIF rose 5.4% YOY from a revised 5288 million one-year ago to 5575 million for 3Q/19, and compared to a revised 5502 million in the prior quarter. For the prior year Visa and Mastercard global credit and debit CIF increased 6.3% YOY. Visa and Mastercard global CIF is now running at an 5.64% CAGR, adjusted to include Visa Europe.
U.S. Payment Cards
Visa and Mastercard U.S. credit CIF rose 2.3% YOY from a revised 561 million one-year ago to 574 million for 3Q/19, and compared to a revised 569 million in the prior quarter. For the prior year Visa and Mastercard U.S. credit CIF increased 3.3% YOY. Visa and Mastercard U.S. credit card CIF is now running at a 2.52% CAGR.
Visa and Mastercard U.S. debit CIF gained 5.6% YOY from a revised 772 million one-year ago to 821 million for 4Q/19, and compared to a revised 808 million for 2Q/19. For the prior year Visa and Mastercard U.S. debit CIF increased 7.4% YOY. Visa and Mastercard U.S. debit card CIF is now running at a 5.33% CAGR, according to analysis by RAM Research and PYRPTS.
International Payment Cards
Visa and Mastercard international credit CIF increased 6.4% YOY, from a revised 1399 million one-year ago to 1489 million for 3Q/19, and compared to a revised 1464 million for the prior quarter. For the prior year Visa and Mastercard international credit CIF increased 4.2% YOY. Visa and Mastercard international credit card CIF is now running at a 4.06% CAGR.
Visa and Mastercard international debit CIF increased 5.5% YOY, from a revised 2556 million one-year ago to 2697 million for 3Q/19, and compared to a revised 2661 million for 2Q/19. For the prior year Visa and Mastercard international debit CIF increased 7.1% YOY. Visa and Mastercard international debit card CIF is now running at a 6.88% CAGR.
American Express Global Credit/Charge CIF
American Express global payment CIF was essentially flat YOY (-0.2%) from 115.1 million one-year ago to 114.5 million for 3Q/19, and compared to 114.2 million for 2Q/19. For the prior year American Express global credit/charge CIF increased 1.9% YOY. American Express global CIF is now running at a 0.62% CAGR.
During the second-half AXP introduced the Vitality Cashback Credit Card in the U.K., refreshed its AIR MILES Platinum Credit Card in Canada, upgraded its iconic Green Card in the U.S. and launched the Business Edge card in Canada
Discover/Diners Club Global Credit/Charge CIF
Discover and Diners Club global payment CIF was flat YOY from an 72.3 million one-year ago to an 72.4 million for 3Q/19, and compared to an 72.3 million for the prior quarter. For the prior year Discover and Diners Club global CIF increased by 8.0% YOY. Discover and Diners Club global CIF is now running at a 2.14% CAGR.
During the second-half, Discover began a contactless card rollout in the U.S. and added P2P to its U.S. card products. Additionally, D]The Discover.Diners Global Network signed significant acceptance agreements internationally.