Global card facts 2019 reveal there is booming competition outside the U.S. for payment cards (credit + charge + debit + prepaid), especially for Visa and Mastercard. The number of payments cards-in-force globally for the four largest U.S.-based networks topped 5.6 billion this year, growing about 7% annually. American Express and Capital One are experiencing little or no growth overseas, while Citibank is flourishing in Latin America and Asia.
Of the $3.5 trillion in global purchase dollar volume (PDV) processed by the four U.S. payment card networks posted in the first-quarter, $1.5 trillion is U.S. card activity. The U.S. segment is growing 8.1% annually, compared to the 9.4% gain posted globally.
Clearly, global card facts show Mastercard has been shaking things up this year, not only in U.S. credit cards, but also in international debit and prepaid cards, pecking away at Visa’s share in Europe, Latin America and in the Asia-Pacific region, notes Robert McKinley, Senior Analyst for CardTrak, CardData and CardFlash.
How Much is Charged to Cards Globally for Purchases?
Purchases processed by the four largest U.S.-based payment networks payments cards (credit + charge + debit + prepaid) increased 9.4% year-on-year (YOY) on a currency adjusted (FX) basis. Visa [V]; Mastercard [MA]; American Express [AXP]; and Discover [DFS] posted $3516 billion in global purchase dollar volume (PDV) for the first-quarter, compared to $3698 billion in the prior quarter and $3369 billion for the year ago quarter. Mastercard continues to lead the payment card networks globally in YOY growth, primarily driven by debit cards, up 16.1% YOY FX and by robust global credit card growth of 9.5% YOY FX.
How Many Credit, Debit, Charge, and Prepaid Cards Are in Use Globally?
The four largest U.S. payment networks expanded credit and debit cards-in-force (CIF) by 369 million over the past twelve months. Visa [V], Mastercard [MA], American Express [AXP], and Discover/Diners [DFS]), global payment cards grew 7.0% year-on-year (YOY) in the first-quarter (1Q/19). The four payment networks reported 5642 million global CIF in 1Q/19, compared to 5558 million for 4Q/18, and 5273 million for 1Q/18. The fastest growing CIF segment is international and U.S. debit cards led by Mastercard,
How Many Visa and Mastercard Purchase Transactions Made Globally?
Global purchase transactions (PTX) for Visa and MasterCard debit and credit cards increased 13.3% year-on-year (YOY) in the first-quarter. The PTX YOY growth rate has been steadily expanding each quarter. The two networks combined, processed 66.0 billion purchase transactions in 1Q/19 compared to 69.1 billion for the fourth-quarter and 58.3 billion one-year ago.
One-year ago the PTX YOY growth rate for the first-quarter was 13.9%. In 1Q/17, the PTX YOY growth rate soared 28.3%, skewed by the merger of Visa and Visa Europe.The Central Europe Middle East Africa (CEMEA) region, followed by Asia-Pacific (AP) have been the key drivers for Visa’s current PTX growth. The Europe and Latin America Caribbean (LAC) regions have been the powerhouses for Mastercard’s recent global purchase transactions growth.
How is American Express Internationally Doing?
American Express international cards (credit and charge) gross dollar volume (GDV) on a currency adjusted basis (FX) has slipped for six consecutive quarters. The decline is most pronounced in the JAPA (Japan, Asia-Pacific & Australia) region as GDV is running about half the growth rate of one-year ago, and a third of the rate five-years ago. However, gains in proprietary international consumer and commercial cards has remained solidly in double-digits FX year-on-year (YOY). For the first-quarter American Express [AXP] posted US$100.2 billion in international credit and charge card GDV, compared to US$103.9 billion for the prior quarter and US$101.3 billion for 1Q/18.
The average spend per American Express international credit and charge card rose a mere 1.5% YOY to US$3927, compared to a 17.8% YOY gain in 2017, and a 6.5% YOY gain over 2016. In tandem with the international GDV decline, the number of cards-in-force (CIF) has steadily declined since peaking at 63.4 million in 3Q/17 and is now shrinking approximately 5% YOY.
What is the Card Activity on Visa and Mastercard in Europe?
Mastercard Europe is blowing Visa Europe out-of-the-water, scoring major gains across-the-board. Combined card activity for Visa and Mastercard credit, debit, charge and prepaid cards, on a currency adjusted basis (FX), posted weaker than expected year-on-year (YOY) gains in the first-quarter (1Q/19). Visa [V] and Mastercard [MA] gross dollar volume (GDV) increased to 10.4% YOY FX, while purchase dollar volume (PDV) edged up to 11.1% YOY FX in the first-quarter. Cards-in-Force (CIF) for Visa and Mastercard in Europe expanded by 63 million, or up 6.1% YOY for 1Q/19.
Does Visa Still Dominate the Canadian Market ?
Based on PDV (purchase dollar volume), Visa holds a 62.2% marketshare in Canada, compared 61.9% one-year ago. Canadian card PDV for Visa and Mastercard payment cards (credit + debit ) posted another weak performance in the first-quarter, up 6.5% currency adjusted (FX) year-on-year (YOY). By comparison, payment card PDV rose 9.2% YOY FX in 2018; 10.6% YOY FX in 2017; 6.6% YOY FX in 2016, and 11.0% YOY FX in 2015. Combined, both networks logged US$98 billion in 1Q/19 PDV, compared to a revised US$115 billion in 4Q/18 and a revised US$97 billion for 1Q/18, Canadian payment cards-in-force (CIF) increased 10.0% YOY to 132 million for 1Q/19, compared to 15.8% YOY for the prior year quarter,
Is Mastercard Chasing Visa in the Latin America Caribbean Region?
Mastercard Latin America Caribbean (LAC) region continues to nibble at Visa’s LAC marketshare with FX (currency adjusted) PDV (Purchase Dollar Volume) rising 750 bps (basis points) above Visa for the first-quarter. Visa’s marketshare in the LAC region from a 71.3% share in 1Q/18 to 68.7% share for 1Q/19. Mastercard has propelled the growth with an average 21% FX YOY rise in PDV, primarily with prepaid card products in the LAC region.
During the past 12 months Mastercard added 19 million CIF in the LAC region, as opposed to Visa’s seven million CIF. LAC PDV for Visa and Mastercard payment cards (credit, charge, debit and prepaid) grew 15.3% YOY FX. Mastercard jumped 17.8% FX YOY in 1Q/19, while Visa increased 14.2% FX YOY for LAC PDV.Combined, both networks logged US$356 billion in payment card (credit + debit) of GDV, US$169 billion in LAC PDV, and US$166 billion in LAC cash dollar volume (CDV).
How is Citibank’s Credit Card Business Outside the U.S. Performing?
Citibank international card profits soared for the Latin America Caribbean (LAC) region in the first-quarter while credit card profits for Asia increased moderately. In Citi’s Asia region, which also includes some European Middle East Africa (EMEA) countries, gross revenues rose 1% YOY (year-on-year) for the first-quarter on a currency adjusted (FX) basis, compared to an 8% FX YOY gain in 2018 and 4% FX YOY gain in 2017. Citi’s LAC credit card income soared 47.0% FX YOY for 1Q/19 to $55 million compared to $61 million for the prior quarter, and $45 million for the year ago quarter. Citi’s Asia credit card income increased 14.0% FX YOY for 1Q/19 to $170 million, compared to $127 million for the prior quarter, and $127 million for the year ago quarter.
Gross accounts for the Citi LAC portfolio declined 3.5% YOY to 5.7 million, compared to 5.7 million in the prior quarter, and 5.7 million for the year ago quarter. Gross accounts for the Citi Asia portfolio declined 0.7% YOY to 15.2 million, compared to 15.3 million in the prior quarter, and 15.3 million for the year ago quarter.
Is Capital One Doing Well in the U.K. and Canada?
Capital One international card gross revenue was flat in the first-quarter while after-tax net income sunk 44% year-on-year (YOY). International credit card purchase dollar volume (PDV) was up nearly 3% as 1Q/19 end-of-period (EOP) outstandings slipped by 3% YOY. End-of-Period (EOP) outstandings for COF’s international card business for 1Q/19 decreased 2.9% YOY NFX (not currency adjusted) to $8.78 billion, compared to $9.01 billion for 4Q/18, and $9.04 billion for 1Q/18. Overall, Capital One’s international credit card metrics mirror the performance metrics of other U.K. and Canada credit card issuers.
How Much Do the British Owe on Credit Cards?
British card debt ticked down again in June to its lowest annual growth rate in more than five years, driven by economic chaos over the uncertain impact of Brexit. Overall the annual growth rate of total U.K. consumer credit slowed to its lowest growth since April 2014. The only bright spot is net borrowing for other loans and advances increased on the month to £0.8 billion, the highest since April.
U.K. consumer credit card lending settled at £72.9 billion for a 5.1% YOY (year-on-year) gain in June, compared to a revised £72.9 billion or a 5.5% YOY gain in May, and compared to a revised £72.8 billion for a 5.8% YOY increase for April 2019. One-year ago U.K. consumer credit card lending settled at £72.0 billion, increasing 9.4% annually.
How Much Do Australians Charge to Credit Cards ?
The amount of purchases in May dropped slightly (-0.3%) compared to one-year ago. Purchase dollar volume (PDV), or the amount of purchases charged to credit cards, decreased to AU$28.6 billion in May, compared to a revised AU$26.8 billion in April and a revised AU$28.7 billion for May 2018. Consumer credit card outstandings continue on a downward spiral. Over the course of the past year Aussie’s have cut up at least nearly half a million credit cards, based on the number of open accounts.
Australians owed AU$51.0 billion in May, compared to a revised AU$51.0 billion for April and a revised AU$52.3 billion for May 2018, for a YOY (year-on-year) decline of 2.5%, compared to a 1.8% YOY decline the previous month.
Are Global Cross-Border Transactions Still Exploding ?
Cross-border transactions, on a currency adjusted basis (FX), rose with Mastercard outpacing Visa by 900 basis points (bps) year-on-year (YOY). Sequentially, quarter-to-quarter, Mastercard declined 400 bps, compared to Visa’s 300 bps decline. Cross-border transaction (X-Border) volume refers to payments and cash volume where the issuing country is different from the merchant country. Visa’s cross-border currency adjusted (FX) gross dollar volume (GDV) increased 4.0% YOY, while MasterCard rose 13.0% YOY for FX GDV in the first-quarter (1Q/19).
Visa reported its FX cross-border GDV rose 4.0% YOY in 1Q/19, compared to 7.0% in 4Q/18 and 11.0% YOY in 1Q/18. In the first-quarter of 2015 Visa reported an 8.0% YOY gain. Mastercard reported its FX cross-border GDV rose 13.0% YOY in 1Q/19, compared to 17.0% in 4Q/18 and 20.0% YOY in 1Q/18. In the first-quarter of 2015 Mastercard reported an 19.0% YOY gain.