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Personal Credit Cards – Global Outlook

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January 23rd, 2017

Personal credit cards are a crucial payment method for consumers. Worldwide, personal credit card transactions comprise over one-third of all non-commercial card payments and have seen strong growth in recent years. Credit cards are expected to continue to gain share over the next five years, reaping additional market share from the ongoing transition away from paper payments.

Source: Euromonitor International

Asia Pacific energises the global credit card market

Global personal credit card transactions totalled USD8.5 trillion in 2016. Global spend was led by the Asia Pacific and North America regions, which together combined for 85% of all personal credit card transaction value worldwide. This positioning is large by virtue of China and the US, the only two countries in the world to top USD1.0 trillion in personal credit card transactions. China led all countries with USD3.2 trillion, while the US was second with USD2.1 trillion. Growth in the Asia Pacific market has far outpaced any other region of the globe, with the region expanding by an astounding 26% current USD value CAGR in fixed 2016 exchange rates. While regional growth has been impressive, paper payments still comprise 51% of Asia Pacific consumer payment transactions – well above both North America (where paper payment transactions account for 33% of all consumer payment transactions) – indicating additional room for growth as the market continues to move toward card-based models.

Personal credit cards growth to pull even with debit

Debit transactions continue to reign as the most common means of card-based consumer payments globally. In 2016, 25% of all consumer payments transaction value was through debit transactions, second only to paper payment transactions with a 46% share. Debit cards are commonly easier for consumers to obtain as they typically do not stipulate the same credit check requirements that are usually associated with opening a credit card. Debit cards are often one of the first non-paper payment methods used by newly-banked consumers, and have seen tremendous growth in recent years. For example, in the Asia Pacific market, where fixed exchange credit card transactions grew by a 26% CAGR between 2011 and 2016, debit transactions grew by an even more impressive 33% CAGR. Shifting consumer payment trends in Asia are beginning to reverse this trend, however, as the growing popularity of credit cards in Asia Pacific are expected to drive global credit and debit card transactions toward growth parity – with both debit transactions and personal credit card transactions projected to see 6% constant value growth over the next 5 years.

Source: Euromonitor International

Credit cards continue push for share of the wallet, further edging out cash

Credit card transactions are expected to co-lead growth amongst all consumer payment transaction types (along with debit transactions), accounting for an estimated 18% of all constant USD consumer payment transactions by 2021. The Middle East and Africa continues to see card-based payments chip away at the dominance of paper payment transactions, which dominated the market in 2016 with 72% of all value transactions. This transition in the region is partially attributable to the growth and increased availability of Islamic banking services which provide Sharia-compliant credit products – helping to make credit cards and other services a viable option for Muslim consumers in the region looking for banking options that are congruent with the tenants of their faith. While Asia Pacific overwhelmingly led growth between 2011 and 2016, the Middle East and Africa is projected to outpace Asia Pacific slightly over the coming five years.

 

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Ryan Tuttle

Ryan Tuttle is a consumer finance analyst at Euromonitor International. His work at Euromonitor focuses on global trends and developments in cards, payments, and lending. He has a master’s of public policy degree from Oregon State University and a bachelor’s of environmental studies degree from Gonzaga University.