A new study has found that the number of payment cards issued globally reached 14 billion last year and is predicted to rise to 17 billion by 2022, boosted by an increase in overall debit card issuance.
RBR, a strategic research and consulting firm, recently published its “Global Payment Cards Data and Forecasts to 2022” report. The firm found the number of payment cards worldwide increased by 8 percent to 14 billion in 2016, and those numbers are expected to rise by 22 percent to 17 billion by 2022.
Main reasons for the increase include an upsurge in bank account holding and developing markets such as China and India. In China, for example, many consumers hold multiple cards for different purposes.
According to the study, debit cards are the most common card type, making up 71 percent of the worldwide total, up from 70 percent in 2015. This will rise further, the RBR report noted, mainly as a result of financial inclusion initiatives in developing markets in Asia-Pacific, the Middle East, Africa and Latin America. For many, a debit card will normally be the first card they receive when they enter the banking system.
And, in more developed markets, debit card growth is partly a result of issuers targeting younger customers. In the U.K., for example, issuers are offering debit cards to children as young as 11 years old.
But, while debit cards are on the rise, the study shows credit cards’ share fell by two percentage points to 20 percent in 2016 and is set to continue to decline in certain areas. In the EU, interchange fee caps have limited the profitability for card issuers, while banks in the U.K. are adopting a more cautious approach to lending due to a rising number of defaults on credit card bills in early 2017. The tightening of credit scoring and stricter borrowing terms have also brought about a contraction of the South African credit card sector.
“The number of payment cards issued worldwide will continue to grow steadily as more people come into the banking system,” said RBR associate Chris Herbert. “The debit card sector will see the strongest expansion in the coming years, in line with the rise in bank account holding. Credit cards, in contrast, will be impacted by regulatory and economic factors in many countries.”