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As digitisation gathers pace, organisations issuing credit cards face a number of competitive threats, including digital wallets linked directly to bank accounts and account-to-account (A2A) solutions which bypass card rails entirely.According to WorldPay/FIS, these two payment methods1 are predicted to account for around 48% of all electronic transactions by 2026. Furthermore, as growth in credit card usage slows, reports in The Financial Times suggest2 the profitability of credit cards dropped between 20 and 30% last year alone, with banks having to invest more in incentives to encourage consumer usage.
Despite this discouraging picture, it’s not all doom and gloom for card providers. Research from PCM3 predicts cards – in both their physical and, increasingly, their virtual forms – will continue to be the dominant payment method for the foreseeable future, with just over half of all non-cash transactions continuing via cards through 2026. At the same time, growth in card transaction volumes and value will continue as people switch from cash to electronic payments around the world. These positive signs notwithstanding, now is the time for issuers to modernise their entire card product range, both online and in the physical world, to maintain future revenues and profits.
