The Credit Card Payment Market Shows Phenomenal Growth in the Forecasted Period with an Estimated CAGR of 8.5%

The credit card market comprises entities (organizations, sole traders, and partnerships) that sell credit card services and are involved in the storage, processing, and transmission of payment card data. The rise in demand for cash alternatives and the availability of low-cost credit cards around the world are driving the global credit card market forward. Furthermore, increasing credit card demand among developing-country youths impacts market growth. There are said to be approximately 2.8 billion credit cards in use worldwide.

Market Drivers

Gradual Shift towards Cashless Transactions Driving the Market

Credit cards are becoming increasingly popular since they are convenient to carry and used as a viable alternative for cash in various circumstances. Following the outbreak of the COVID-19 virus, the vast majority of people are striving to avoid using money and have expanded their use of contactless credit cards. It simplifies monetary transactions at all levels, and it is a safer and more convenient way to spend money. In addition to cashback and discounts, credit card users can take advantage of several incentives and benefits that help them save money while engaging in various retail activities. It leads to the expansion of the credit card payment market.

Credit Card Demand Increases in Emerging Economies

A rise in the use of credit cards is being observed worldwide, particularly in emerging countries with a growing population. It is attributable to an increase in disposable income, an increase in debit cards, and the convenience of using credit cards to make purchases. Furthermore, various countries are focusing on increasing the adoption of digital payments for their end-users to reduce the spread of coronavirus, which promotes market growth. For example, according to a 2020 research report published by MasterCard, approximately 42 % of Indians increased their use of digital payment systems, which primarily include contactless credit cards, online payments, and others, fuel market growth.

Segmental Analysis

General-Purpose Credit Cards to Account for a Sizable Market Share

The payment market for credit cards is to separate into general-purpose credit cards and specialty and other credit cards. During the projection period, general-purpose credit cards are likely to have the majority of the market share. It was estimated that in 2018, the overall number of general-purpose credit card transactions in the United States were USD 40.9 billion, according to the Federal Reserve Payments Study 2019. A big part of the rise in the general-purpose credit card market can be attributed to the special discounts, cashback, and reward points that can be earned when making purchases with a credit card.

Visa Credit Cards Hold a Larger Market Share

By brand type, the credit card payment market is divided into three categories: Visa, MasterCard, and Others. Visa and MasterCard are the credit card networks that are the most frequently accepted. Visa is the largest of the four major credit card networks in the United States, accounting for over half of all transactions. According to the company, during the 12 months ending December 30, 2020, Visa's credit payments volume in the United States hit USD 1.97 trillion. Visa credit cards are accepted at 44 million merchant locations in more than 200 nations and territories worldwide, representing a 44% market share.

Impact of Covid-19

The impact of COVID-19 on introducing a new credit card is projected to influence the expansion of the credit card industry negatively. Due to the economic downturn, consumers are delaying applying for credit cards and reducing their credit card balances, and it is because there are fewer opportunities to spend money. Additionally, digitally-focused businesses such as Apple, which just announced the successful acceptance of its Apple Card, have witnessed a decrease in spending on a broad scale. Since the lockdown, consumers have shifted their spending from credit cards to debit cards as they pause larger purchases and use debit cards to pay for groceries, utilities, and other essential products and services. It has affected the growth of the credit card payment market.

Regional Overview

North America Fuels the Credit Card Payment Market

It is expected that North America will continue to be the most dominating region in the credit card payments market in 2020 and that this will continue throughout the projection period. It can be attributed to many factors, one of which is the rapid acceptance of credit cards in the region's economic environment. There are 1.06 billion credit cards in use in the United States of America, and over 76 million credit cards are in circulation in Canada.

During the forecast period, Europe, on the other hand, is expected to grow significantly, owing to an increase in the number of loyalty programmers and credit card reward points offered by companies to increase their market share as well as the growing popularity of credit cards among young people in developed countries.

Key Highlights

• The global credit card payment market is expected to grow at a CAGR of approximately 8.5% during the forecasted period, with an estimated revenue of USD 263,473 million.
• The credit card payment market is driven by Increased co-branded card offerings, expanding millennial and Gen Z spending power and a steady shift towards cashless transactions.
• General-purpose credit card is the leading segment as they are the most commonly accepted model of payment worldwide, allowing cardholders the opportunity to enjoy the benefits of using credit cards anywhere.
• Over the analysis period, Visa credit cards are expected to have a significant market share due to the additional perks and benefits offered to the consumers, improving their spending experience.
• North America holds the largest share due to the increased acceptance of credit cards and their rising usage of cashless transactions daily. Europe is expected to proliferate in the forecasted period owing to attractive incentives and reward systems.
• The market is saturated with key players such as American Express, Bank of America Corporation, Barclays PLC, Capital One, Citigroup Inc., JPMorgan Chase & Co, MasterCard, Synchrony, The PNC Financial Services Group, Inc., USAA, among more.

Market News

December 2021- In the United Kingdom, Amazon has partnered with Barclays to allow customers to pay in installments. Customers will have greater payment flexibility with Instalments by Barclays, with financing options available on terms ranging from 3 to 48 months.

November 2021- Capital One announced its acquisition of TripleTree, LLC (TripleTree), a leading investment banking advisory platform is serving market-leading healthcare technology and services firms. Capital One and TripleTree will collaborate to create a differentiated healthcare platform that combines Capital One's full-service capital markets and corporate banking capabilities with TripleTree's M&A advisory and investment banking capabilities.

Global Credit Card Payment Market: Segmentation

By Card Types

• General Purpose Credit cards
• Specialty & Other Credit Cards

By Brands

• Visa
• MasterCard
• Others

By Applications

• Food and Groceries
• Health and Pharmacy
• Restaurants and Bars
• Consumer Electronics
• Media and Entertainment
• Travel and Tourism
• Others

By Regions

• North America (The U.S, Canada)
• Europe (Germany, France, The U.K., Italy, Spain, The Netherlands, The Rest of Europe)
• Asia-Pacific (China, India, Indonesia, Japan, South Korea, Malaysia, The Rest of Asia Pacific)
• Latin America (Brazil, Mexico, Argentina, The Rest of Latin America)
• The Middle East and Africa (GCC, South Africa, Brazil, Egypt, The Rest of MEA)