GLOBAL CREDIT CARD MARKET

Credit cards are very useful, convenient payment tool, that eliminate the problems of carrying cash all time. Credit card use has grown year after year since their invention. It’s a great way to make online purchases, many places accept them as well. There is negative side as well, as there is a possibility to overspend, but using wisely it can be a great alternative of cash. It seems that the industry hit hard by the pandemic as 2020 was unprofitable for most of the credit card companies.

• The global cards market was valued at over $250 billion in 2017. North America was the largest region in the cards market in 2017, accounting for around 60% of the global market. The USA was the largest country in the market in 2017, accounting for nearly 55% of the market.
• Americans’ revolving debt, the bulk of which is credit card balances, hit $1.0645 trillion in April 2019, according to the Federal Reserve.
• The average credit card debt per borrower in US also has been rising in recent years to $5,554 in the first quarter of 2019, according to TransUnion statistics.
• Credit card delinquency rates track the percentage of Americans who are late in paying their bills, and as such, often are a harbinger or rising credit card debt. Credit card delinquency rates rose steadily during the Great Recession, then gradually fell off. Now they are ticking up again.

• A total of £8.7bn was spent on credit cards in the first full month of lockdown in April 2020, half the level of April last year, UK Finance said. The banking trade body said this was the lowest level of spending seen since the last economic downturn. The cancellation of holiday plans is one likely reason for the fall.

• Visa
  • Payments volume, cross-border volume and processed transactions growth all improved through the quarter and were at varying stages of recovery. Full-year business drivers were all impacted by COVID-19 starting in March, with an improving trend exiting September.
  • Over 185 billion payment transactions and almost $9 trillion of payment volume were made on Visa credentials.
  • Their fiscal full-year 2020 net revenues were $21.8B, a decrease of 5% than 2019.
  • Globally, their number of active credentials in e-commerce excluding travel rose 14% since January, reinforcing the continued shift by consumers to online shopping.
  • On October 27, 2020, Visa announced it signed a definitive agreement to acquire YellowPepper. They believe this acquisition will accelerate the adoption of Visa’s “network of networks” strategy in Latin America and the Caribbean by significantly reducing the time-to-market and cost for issuers.
  • Visa has launched Tap to Phone technology, in Oct 2020, which enables Android handsets to be used for accepting NFC payments. Tap to Phone can help millions of small and micro businesses quickly access the digital economy, prevent lost sales and improve cash flow in covid times.

• Mastercard
  • In Q3 2020, their net revenue was $3.8 billion, a 14% decrease on both an as reported and a currency-neutral basis, which reflects the impacts of COVID-19 and includes a 1 percentage point benefit from acquisitions.
  • Year to date 2020 results show their cross-border volume declined 29% on a local currency basis
  • As of September 30, 2020, the company’s customers had issued 2.7 billion Mastercard and Maestro branded cards.
  • Chase, Air Canada and Mastercard Announce Partnership to Launch a Credit Card in the U.S. in 2021. Multi-year agreement will bring U.S. customers rich rewards and flexibility offered by the airline’s newly revamped Aeroplan loyalty program.
  • Mastercard and its partners, TSYS, a Global Payments company and Extend, on Nov 2020, introduced a mobile virtual card solution that enables virtual corporate cards to be easily loaded into a mobile wallet for fast and secure contactless payments. The new mobile virtual card solution addresses the growing demand for digital, contactless commercial payments, which has been amplified by the changing nature of work and business expenses during the pandemic, and the rise of the work-from-home economy.
  • Mastercard on June 2020, announced it has entered into an agreement to acquire Finicity, a leading North American provider of real-time access to financial data and insights. The purchase price is US$825 million

The addition of Finicity’s complementary technology and teams strengthens the existing Mastercard open banking platform to enable and safeguard a greater choice of financial services.

• American Express
  • American Express Company reported third-quarter net income of $1.1 billion, or $1.30 per share, compared with net income of $1.8 billion, or $2.08 per share, a year ago.
  • American Express on July 2020, launched American Express One AP™, the company’s first proprietary automated accounts payable (AP) solution that enables U.S. businesses to process supplier payments more easily and efficiently.
  • On Aug 2020, they launched Score Goals, an online platform that augments and expands the card company’s established credit score tool, MyCredit Guide.

The new offering, which is available to consumers whether or not they are American Express cardholders, “includes a range of information and tools to help them understand their credit score better and plan for the future.

COMPANIES PROFILED

• Visa
• MasterCard
• American Express
• Chase
• Capital one
• BOA
• Citi
• Wells Fargo
• Discover
• Barclays