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Data for today’s episode is provided by Mercator Advisory Group’s report –2020 Annual U.S. Debit Card Market Data Review
Two Scenarios for Debit Card Growth Post COVID-19:
- Pre-COVID, debit card transactions stood at $2,585 billion annually.
- An optimistic outcome with a prompt recovery forecasts debit card transactions at $2,962 billion by 2022.
- A pessimistic outcome with a severe downturn forecasts debit transactions at $2,557 billion by 2022.
- There were 515 million Mastercard & Visa debit cards in the market in 2019.
- Visa dominates the debit card market: 72% vs. Mastercard’s 28%.
- Debit card users skew older (56% age 35-64) and lower income (57% <$50K).
- Although belt-tightening favors debit, the loss of income from job loss or pay cut will have greater influence on debit transactions.
Debit card activity in the United States was very brisk in 2019, posting strong growth, but the future growth of debit cards and how they will be used will change materially as the economy is altered by the impacts of the global novel coronavirus pandemic. Mercator Advisory Group’s latest research report, 2020 Annual U.S. Debit Card Market Data Review, presents data on how the market was progressing and what the future may hold for debit card issuers and cardholders.
“Use of debit cards now and in the near term will be slowed the most by historically high unemployment, which affects typical debit card users, who make less than $75,000 annually on average, and by the closure of all but essential retailers. Offsetting this is the trend seen in the past of consumers favoring debit during recessionary periods,” commented Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group, author of the report.