Debit Cards Set New Market Share Record
While debit cards gain traction in 2018, fraud losses on debit and prepaid card transactions also climb.
For the first time since 2011, debit cards gained market share in 2018 in terms of U.S. purchase volume, according to new data from The Nilson Report. Debit cards accounted for 40% of purchase volume in 2018, it said.
Credit, debit and prepaid cards in the United States together accounted for about $6.7 trillion of spending on goods and services in 2018, the company said. Credit cards were 54.9% of all purchase volume, down from 55.07% in 2017.
“The top 10 issuers based on combined purchase volume remained in the same position in 2018 compared to 2017,” the company reported. “JPMorgan Chase continued as the largest issuer of consumer and commercial credit, debit (including EFT network), and prepaid cards with a combined purchase volume of $1.064 trillion in 2018. It was the first payment card issuer whose customers generated more than $1 trillion in spending in one year.”
American Express was the largest card issuer in terms of credit card purchase volume. Wells Fargo was the largest debit issuer, according to the report, and The Bancorp Bank was the largest issuer of prepaid cards, which accounted for about 5% of total purchase volume in the United States in 2018.
The finding followed a CO-OP Financial Services survey of 240 U.S. credit unions, which found that most were optimistic about the future of their debit card portfolios. Over a third (38%) of the respondents in that study said their credit unions have issued debit cards to at least 70% of their checking account customers. Overall, debit card accounts will grow about 3% to 4% a year, CO-OP predicted.
Earlier this year, a recent survey by the Federal Reserve also found that for many credit unions and other financial institutions not subject to the Electronic Fund Transfer Act’s interchange cap, the average interchange fee for debit transactions on single-message networks (typically PIN transactions) has continued to fall since the cap took effect in 2011. However, fraud losses for all debit and prepaid card transactions rose between 2015 and 2017.