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Credit Cards Increase Market Share Against Prepaid and Debit

[Tuesday, June 9th, 2015]

While prepaid cards may be more popular than ever, and debit cards remain a popular choice with consumers, credit cards are still the most prevalent payment method.

The most recent Nilson report shows credit cards continuing their rebound, holding their own against the debit and prepaid markets. Credit cards, including secured cards, unsecured cards, and rewards cards, increased their market share over debit and prepaid cards in The Nilson Report’s annual report. Purchase volume for credit cards was 53.59% in 2014, up from 52.9% in 2013, but not quite reaching the peak of 54.9% in 2009, and still far from the 67.01% high in 2004.

The Nilson Report is a trade newsletter that covers the payment card and mobile payment industries. Their annual report details the movements of credit, debit, and prepaid market shares over the past year and tracks payment volume for each payment method.

Visa, MasterCard, American Express and Discover lead payments

Payments from secured and unsecured cards bearing the Visa, MasterCard, American Express and Discover logos generated $2.631 trillion last year; an increase of 9.7% from 2013.

Debit cards from Accel, Interlink, Nyce, Pulse, and Star as well as from Visa, MasterCard, American Express and Discover nabbed $2.279 trillion in 2014, a jump of 6.9% over the year before.

Gains and losses across the board

Payment issuers that gained share were led by JPMorgan Chase, which generated $703.32 billion in purchase volume last year. That included consumer and commercial credit, debit, and prepaid cards. Chase cards were used in 14.32% of total spending at all retailers in 2014. That’s an increase of 20 basis points. In comparison, Wells Fargo, which also gained share, rose 18 basis points, while Capital One gained only 3 basis points.

American Express, Bank of America, Citi, Discover, PNC Bank, USAA, and U.S. Bank were all down in 2014. American Express dropped 2 basis points, Bank of America slipped by 55 basis points, Citi dropped 15 basis points, Discover lost 7 basis points, PNC Bank slipped by 3 basis points, USAA dropped 2 basis points, and U.S. Bank lost less than 1 basis point.

Although Bank of America lost the most basis points, their payment cards still accounted for 11.55% of all payments in 2014, and American Express cards were used in 13.43% of payments. USAA, though they had the smallest drop, was still at the bottom of the payment ladder, accounting for only 1.63% of the payments market.

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