The Discover card portfolio continues to defy gravity, posting a 2.3% YOY (year-on-year) gain in the fourth-quarter (4Q/20) GDV and growing at a solid 5.29% five-year CAGR (compound annual growth rate). Furthermore, Discover increased its U.S. GDV marketshare from 4.0% to 4.3% over the past twelve months,
Credit Card Networks U.S. GDV (gross dollar volume) for fourth-quarter credit/charge card products, among the Major 4 payment networks (Visa [V], Mastercard [MA], American Express [AXP], and Discover [DFS]), declined 6.4% year-on-year (YOY), compared to a 10.9% YOY nose-dive for the prior quarter, and a 7.4% YOY gain for the year ago quarter, based on data compiled by CardData and CardFlash.
On an annual or YOY basis, American Express led the Major 4 in U.S. credit card GDV declines, posting a bruising YOY 12.4% drop in the fourth-quarter. On a CAGR basis, Visa is the only payments network posting the highest single-digit increase in U.S. credit card GDV, mainly due to the 2016 Citibank acquisition of American Express Costco accounts, according to RAM Research and PYRPTS.
American Express Struggles in the U.S. Market
Robert McKinley, analyst for CardWeb notes Visa continues to hold sway in the U.S. credit card market with a 53.5% marketshare, up 100 bps (basis points) from 4Q/19. Discover also increased its marketshare, based on GDV, by 30 bps YOY. The gains came at the expense of Mastercard, down 10 bps YOY, and American Express declining 120 bps in the U.S. market.
The Major 4 reported $1013 billion in U.S. credit card gross dollar volume (GDV) for 4Q/20, compared to a revised $925 billion for the prior quarter, and a revised $1082 billion for 4Q/19. In the fourth-quarter of 2015 the Major 4 posted $777 billion in U.S. credit card GDV, according to CardBuzz.
Fourth-Quarter U.S. CC GDV Analysis
The Major 4 payment networks posted an 6.4% YOY decrease in the fourth-quarter U.S. credit card GDV, compared to an 10.9% YOY decline for prior quarter of 2020, and compared to a 7.4% YOY gain in same quarter of 2019. The five-year current CAGR for the Major 4 credit card GDV is running at 5.45%, compared to a 4.34% CAGR for 3Q/20.
Professor Cardworthy, analyst of Bankcenter, suggests the sluggishness will likely moderate in the first-quarter as the U.S. Congress ponders another round of economic stimuli. The impact of the federal unemployment supplement and direct payments to American households cannot be understated. Despite reductions in credit card lines, increased FICO requirements for new accounts, and waiver of minimum payments and late fees, the first-quarter will remain soft in financial services.
Major 4 U.S. Networks Q4 Stats
Visa U.S. Credit Card GDV
Visa reported an 4.6% YOY decline with fourth-quarter U.S. credit card GDV of $542 billion, compared to a revised $500 billion for 3Q/20 and a revised $568 billion for 4Q/19. Visa U.S. credit card GDV grew 6.6% YOY for 4Q/19. In the fourth-quarter of 2015, Visa posted $372 billion in U.S. credit card GDV. Visa is currently growing at a CAGR of 7.82% for U.S. credit card GDV, driven primarily by the migration of American Express cobranded cards to Citibank and Visa in 2016. Discounting the 2016 migration, VISA’s current five-year CAGR is about 6.16%.
Mastercard U.S. Credit Card GDV
Mastercard reported an 6.7% YOY decrease with fourth-quarter U.S. credit card GDV of $237 billion, compared to a revised $214 billion for 3Q/20 and a revised $254 billion for 4Q/19. Mastercard U.S. credit card GDV grew 11.4% YOY for 4Q/19. In the fourth-quarter of 2015, Mastercard posted $181 billion in U.S. credit card GDV. Mastercard is currently growing at a CAGR of 5.54% for U.S. credit card GDV.
American Express U.S. Credit Card GDV
American Express reported a 12.4% YOY drop-off with fourth-quarter U.S. credit card GDV of $190 billion, compared to a revised $171 billion for 3Q/20 and a revised $217 billion for 4Q/19. American Express U.S. credit card GDV grew 5.9% YOY for 4Q/19. In the fourth-quarter of 2015, American Express posted $190 billion in U.S. credit card GDV. American Express is currently stagnant at a CAGR of 0% for U.S. credit card GDV, dampened by the migration of American Express cobranded cards to Citibank and Visa in 2016.
Discover U.S. Credit Card GDV
Discover reported a 2.3% YOY increase with fourth-quarter U.S. credit card GDV of $44 billion, compared to a revised $40 billion for 3Q/20 and a revised $43 billion for 4Q/19. Discover U.S. credit card GDV grew 4.8% YOY for 4Q/19. In the fourth-quarter of 2015, Discover posted $34 billion in U.S. credit card GDV. Discover is currently growing at a CAGR of 5.29% for U.S. credit card GDV.
Professor Cardworthy attributes the Discover card performance to tight risk management and expanded marketing of its no annual fee message.
Upcoming Payment Card Events from PYVNTS
B2B Converge: Asia-Pacific (Physical) February 2 – Singapore
MoneyNext Summit Asia (Virtual) February 2-4 – New York
Artificial Intelligence in Financial Services (Virtual) February 3-4 – London
Advertising Claims Substantiation (Virtual) February 3-4 – New York
COMPLY Summit (Virtual) February 4 – New York
Omnichannel Futures Webinar (Virtual) February 10 – London
ECOM 20/20 East Africa (Virtual) February 16 – Cape Town, South Africa
B2B Expo & Conference (Physical) February 18 – Berlin
SecureWorld New England (Virtual) February 18 – Maine – Connecticut – Rhode Island – New Hampshire – Vermont – Massachusetts
ACAMS AML & Anti-Financial Crime Conference – Indian Subcontinent (Virtual) February 22-23 – New Delhi, India
Merchant Payments Ecosystem (Virtual) February 22-25 – Berlin
mapic India (Physical) February 23-24 – New Delhi, India
eTail West (Virtual) February 23-25 – Palm Springs, California
MWC Shanghai (Physical) February 23-25 – Shanghai
PYVNTS – Daily Updated Listing of All 2021 Payment Events
U.S. Major 4 U.S. Credit Card GDV
(Visa + Mastercard + American Express + Discover)
1Q/15: $666 billion
2Q/15: $738 billion
3Q/15: $748 billion
4Q/15: $777 billion
1Q/16: $725 billion
2Q/16: $792 billion
3Q/16: $805 billion
4Q/16: $842 billion
1Q/17: $793 billion
2Q/17: $869 billion
3Q/17: $873 billion
4Q/17: $927 billion
1Q/18: $871 billion
2Q/18: $951 billion
3Q/18: $960 billion
4Q/18: $1007 billion
1Q/19: $932 billion
2Q/19: $1028 billion
3Q/19: $1038 billion
4Q/19: $1082 billion
1Q/20: $961 billion
2Q/20: $782 billion
3Q/20: $925 billion
4Q/20:$1013 billion
Visa U.S. Credit Card GDV
1Q/15: $316 billion
2Q/15: $352 billion
3Q/15: $359 billion
4Q/15: $372 billion
1Q/16: $349 billion
2Q/16: $390 billion
3Q/16: $424 billion
4Q/16: $444 billion
1Q/17: $418 billion
2Q/17: $460 billion
3Q/17: $463 billion
4Q/17: $492 billion
1Q/18: $460 billion
2Q/18: $507 billion
3Q/18: $513 billion
4Q/18: $533 billion
1Q/19: $488 billion
2Q/19: $542 billion
3Q/19: $547 billion
4Q/19: $568 billion
1Q/20: $508 billion
2Q/20: $424 billion
3Q/20: $500 billion
4Q/20: $542 billion
Mastercard U.S. Credit Card GDV
1Q/15: $152 billion
2Q/15: $172 billion
3Q/15: $176 billion
4Q/15: $181 billion
1Q/16: $169 billion
2Q/16: $184 billion
3Q/16: $182 billion
4Q/16: $189 billion
1Q/17: $178 billion
2Q/17: $196 billion
3Q/17: $198 billion
4Q/17: $207 billion
1Q/18: $194 billion
2Q/18: $211 billion
3Q/18: $213 billion
4Q/18: $228 billion
1Q/19: $212 billion
2Q/19: $237 billion
3Q/19: $244 billion
4Q/19: $254 billion
1Q/20: $227 billion
2Q/20: $183 billion
3Q/20: $214 billion
4Q/20: $237 billion
American Express U.S. Credit/Charge Card GDV
1Q/15: $169 billion
2Q/15: $182 billion
3Q/15: $180 billion
4Q/15: $190 billion
1Q/16: $176 billion
2Q/16: $185 billion
3Q/16: $165 billion
4Q/16: $174 billion
1Q/17: $165 billion
2Q/17: $178 billion
3Q/17: $176 billion
4Q/17: $189 billion
1Q/18: $183 billion
2Q/18: $195 billion
3Q/18: $195 billion
4Q/18: $205 billion
1Q/19: $196 billion
2Q/19: $209 billion
3Q/19: $206 billion
4Q/19: $217 billion
1Q/20: $190 billion
2Q/20: $142 billion
3Q/20: $171 billion
4Q/20: $190 billion
Discover U.S. Credit Card GDV
1Q/15: $29 billion
2Q/15: $32 billion
3Q/15: $33 billion
4Q/15: $34 billion
1Q/16: $30 billion
2Q/16: $33 billion
3Q/16: $33 billion
4Q/16: $35 billion
1Q/17: $32 billion
2Q/17: $35 billion
3Q/17: $36 billion
4Q/17: $39 billion
1Q/18: $34 billion
2Q/18: $38 billion
3Q/18: $39 billion
4Q/18: $41 billion
1Q/19: $36 billion
2Q/19: $40 billion
3Q/19: $41 billion
4Q/19: $43 billion
1Q/20: $37 billion
2Q/20: $33 billion
3Q/20: $40 billion
4Q/20: $44 billion
Sources: Visa; Mastercard; American Express; Discover; CardData; RAM Research; CardTrak; CardFlash; Cardworthy; CardWeb; PYRPTS; CardBuzz; Bankcenter; PYVNTS; Ruebud Media; Red3 Media; Robear’s List
