Global Consumer Debit Purchase Volume Tops $1 Trillion
Consumers around the world continue to turn to their Visa debit and prepaid cards over cash and cheques. At the Visa International Global Debit Forum held recently in Prague, Visa announced the most recent figures on consumer debit and prepaid card usage which represented 53 per cent of total Visa sales and cash volumes.
Significantly, consumer debit and prepaid purchases at the point of sale – excluding cash transactions such as ATM withdrawals – totaled more than US$1.1 trillion. The growth in purchases, which was 19 per cent year-over-year, demonstrates the growing preference for debit payments for everyday transactions.
“Debit represents a major growth driver around the world as Visa cardholders see the benefits and convenience of using debit products,” said Gaylon Howe, executive vice president, Consumer Product Platforms, Visa International. “Debit provides cardholders the ease and flexibility to “pay now” using funds on deposit, while managing their budgets and enjoying the security, reliability and convenience of using Visa.”
While debit cards have traditionally gained the greatest traction in merchant segments such as grocery, petrol/gasoline, restaurants and pharmacies, consumers are also beginning to realize the convenience of debit payments for categories such as insurance, utilities and telecommunications – typically paper-based transactions. The growing preference for electronic payments over cash and cheques can also be seen in Visa’s share of the personal consumption expenditures (PCE) index, which grew to 8.6 per cent in 2005.
For year ending December 2005, total global debit and prepaid sales and cash volume topped US$2.13 trillion, compared to US$1.78 trillion for the same period in 2004, a 20 per cent increase. Visa regions around the world also saw double-digit growth in total debit and prepaid sales and cash volumes:
• Visa Asia Pacific reported US$116 billion in transaction volume, a 49 per cent increase over 2004.
• Visa CEMEA (Central and Eastern Europe, Middle East, Africa) reported US$170 billion, a 40 per cent increase.
• Visa Europe reported US$1 trillion, a 18 per cent increase.
• Visa LAC (Latin America and the Caribbean) reported US$236 billion, a 19 per cent increase.
• Visa USA reported US$601 billion, a 16 per cent increase.
Visa supports the growing popularity of consumer debit with an industry-leading product portfolio offering issuers choice and flexibility. A comprehensive and defined range of products provides issuers the ability to match the most appropriate debit product features to diverse customers, enabling them to more effectively manage risk and take advantage of new opportunities. Innovative debit products such as unembossed cards with greater authorization controls allow issuers to reach new cardholder segments and support increased debit transactions, especially at the point of sale.
With sustained triple-digit growth, prepaid products represent Visa’s fastest growing payment category globally. Visa members are increasingly seeing the potential for prepaid and have implemented more than 2,000 programs in more than 30 countries offering innovative payment solutions for payroll, money transfers, gifts, travel, benefits disbursements, youth, general purpose, and more. Globally, up to US$5 trillion is spent in cash and cheques that could be more efficiently processed as prepaid electronic payments.
Debit and prepaid products also help bring greater economic transparency and efficiencies of electronic payments to developing markets and provide important access to financial services to consumers who may be unbanked or new to banking.
Visa’s annual Global Debit Forum is an opportunity to present best practices, updates and other information to member financial institutions interested in growing their debit and prepaid programs. This year’s theme of “Expanding Opportunities – New Merchants, New Channels, New Programs” emphasizes the growth opportunities to further extend debit and prepaid payments.
Visa International is a partnership of 21,000 member banks. These banks have issued over a billion Visa cards worldwide on which US$4 trillion per year is spent across over 150 countries.
Visa’s role is to provide payment solutions for its member banks, enabling them to issue cards and process merchants’ Visa card transactions. The Visa products issued by the banks are safer, more convenient and more efficient than cash. Furthermore, they help to bring people into the banking system and to increase the funds available for commercial loans, the lifeblood of a growing economy.
For more information, visit www.corporate.visa.com