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Data for today’s episode is provided by Mercator Advisory Group’s Report: 2021 Annual U.S. Debit Card Market Data Review: Unprecedented Double-Digit Growth
Contactless Payments Seized the Moment in 2020:
- Contactless payments received a lot of attention in 2020 as a means to allow cardholders to keep their distance from potentially germ-infested point-of-sale devices.
- Visa now reports that 70% of card transactions occur at a merchant that can accept a contactless card or mobile wallet.
- 24% of consumers who had not used a contactless card prior to the pandemic have since used one at least once.
- Similarly, 20% of consumers who had not used contactless mobile wallet prior to the pandemic have since used one at least once.
- This is real growth for contactless, but contactless still accounts for less than 10% of total transactions.
- In the near term future, Mercator anticipates slow growth for contactless.
Dollar volume spent on debit cards in the U.S. rose by 14% as a result of generous government benefits and a change in consumers’ payment preferences that shifted away from checks, cash, and credit cards. This and other aspects of the current market for debit cards are reviewed in Mercator Advisory Group’s report, 2021 Annual U.S. Debit Card Market Data Review: Unprecedented Double-Digit Growth.
”This past year the market experienced a unique environment where consumers sharply shifted their payments towards the use of debit cards and because some of this shift came at the expense of credit cards, this was positive for debit issuers and, at the same time, positive for merchants as credit card transactions are nearly always more expensive to process than debit cards. Issuers are interested in encouraging the continued top-of-wallet position that debit cards have achieved, but competition from fintechs plus likely regulatory changes will make this an uphill battle,” comments Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group and author of the report.