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United States Country Report

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  • Published Date: July 2021

A comprehensive overview of the cards, payments and merchant acquirer market in the United States, with insightful commentary backed by in-depth data.

The United States has a highly developed and competitive retail banking and payments market. However, emerging payment technologies are only now displacing comparatively old-fashioned POS systems and the habitual use of cheques, a shift boosted by consumer's association of contactless with hygiene safety. The major banks are now committed to contactless card technology. Payments innovation will also benefit from Fed plans to launch a real-time payment service with an integrated clearing capacity in 2023.

The American economy has bounced back more quickly than anticipated from a damaging first year of Covid-19. Competition resumed in the credit cards market with issuers vying to capture their share of the spending boom as the restrictions were lifted during the first half of 2021.

What you will learn from this US payments research report:

  • How the cards market has been impacted by the coronavirus pandemic, and how issuers are responding as the economy reopens
  • What is driving changes to the credit card profit pool mix
  • How the networks are responding to developments in digital and alternative payments
  • Why scale and technological development is so vital to merchant acquirers in the United States

US CARDS & PAYMENTS MARKET REPORT | KEY FACTS

  • Many issuers have emphasised cashback rewards to incentivise spending as the economy recovers. The travel and entertainment sectors which have traditionally been the focus of rewards programmes were among the worst affected by the pandemic.
  • Cobrand partnerships are important differentiators for issuers, with Big Tech brands increasingly prevalent. Banks reported big declines in credit card profits in 2020 as reserves were set aside to account for future losses. However, with those losses not materialising and spending recovering, those reserves are being released in 2021.
  • Debit and prepaid card spend has increased on the back of government stimulus which was paid into bank accounts and on specially issued prepaid cards.
  • Visa and Mastercard continue to benefit from growth in card spend but have also been diversifying into alternative payments.
  • The ten largest issuers are committed to completing the rollout of contactless payment card portfolios before the end of 2021.
  • Mobile payments are showing high growth after several false starts, with e-commerce and P2P fuelling adoption.
  • The Fed is developing a new real-time payments network that will go live in 2023.

United States Payments Research | Report Contents

TABLE OF CONTENTS
Demographics and the economy
Payments environment
Cards market
Mobile payments
Profit pool
The networks
Key retail banks and issuers
Acquiring and processing
Online acquiring
Regulatory and other cards market information

Appendices: Payments Data Tables

Appendix I: Demographics and the economy

Data table 1: Demographic and economic indicators: 2015-2020. Estimates and forecasts to 2024.
Data table 2: Ownership of key consumer devices: 2015-2020. Estimates and forecasts to 2024.
Data table 3: Internet usage by population: 2015-2020. Estimates and forecasts to 2024.

Appendix II: Payments environment

Data table 4: Access points: 2015-2020. Estimates and forecasts to 2022.
Data table 5: Account penetration: 2015-2020. Estimates and forecasts to 2024.
Data table 6: Consumer payment trends: 2015-2020. Estimates and forecasts to 2022.
Data table 7: B2C e-commerce payment methods: 2015-2020. Estimates and forecasts to 2022

Appendix III: Cards market

Data table 8: Total cards payment metrics: 2015-2020. Estimates and forecasts to 2024.
Data table 9: Contactless cards metrics: 2015-2020. Estimates and forecasts to 2024.
Data table 10: Credit card numbers: 2015-2020. Estimates and forecasts to 2024.
Data table 11: Total credit cards metrics: 2015-2020. Estimates and forecasts to 2024.
Data table 12: Credit cards profitability indicators: 2015-2020. Estimates and forecasts to 2024.
Data table 13: Debit cards numbers: 2015-2020. Estimates and forecasts to 2024.
Data table 14: Debit cards metrics: 2015-2020. Estimates and forecasts to 2024.
Data table 15: Pre-paid/e-money card metrics: 2015-2020. Estimates and forecasts to 2024.

Appendix IV: Mobile payments

Data table 16: Mobile proximity payment metrics: 2015-2020. Estimates and forecasts to 2024.
Data table 17: Mobile P2P payments: 2015-2020. Estimates and forecasts to 2024.

Appendix V: Profit pool

Data table 18: Profit pool: 2015-2020. Estimates and forecasts to 2024 inc. credit card numbers, billed volumes, oustandings, interest incomes, net interest revenues, merchant revenues, card fee revenues, other non-interest incomes, total revenues, net credit losses, operating expenses, total expenses, pre-tax profits, merchant service charges, rollover rates, APR, net credit losses to outstandings, operating costs to revenues, ROA (pre-tax profits to outstandings).

Appendix VI: Card networks

Data table 19: Networks' credit card market shares: 2015-2020. Estimates and forecasts to 2022.
Data table 20: Networks' credit card numbers: 2015-2020. Estimates and forecasts to 2022.
Data table 21: Networks' credit card billed volume: 2015-2020. Estimates and forecasts to 2022.
Data table 22: Networks' number of credit card transactions: 2015-2020. Estimates and forecasts to 2022.
Data table 23: Networks' average credit card transaction value: 2015-2020. Estimates and forecasts to 2022.
Data table 24: Credit card interchange fees by network: 2015-2020. Estimates and forecasts to 2022.
Data table 25: Networks' debit card market shares: 2015-2020. Estimates and forecasts to 2022.
Data table 26: Networks' debit card numbers: 2015-2020. Estimates and forecasts to 2022.
Data table 27: Networks' debit card billed volume: 2015-2020. Estimates and forecasts to 2022.
Data table 28: Networks' number of debit card transactions: 2015-2020. Estimates and forecasts to 2022.
Data table 29: Networks' average debit card transaction value: 2015-2020. Estimates and forecasts to 2022.
Data table 30: Debit card interchange fees by network: 2015-2020. Estimates and forecasts to 2022.

Appendix VII: Key retail banks and issuers

Data table 31: Key credit card issuers market shares by credit card numbers: 2017-2020. Estimates and forecasts to 2022.
Data table 32: Key issuers market shares in credit card outstandings: 2017-2020. Estimates and forecasts to 2022.
Data table 33: Key debit card issuers market shares by debit card numbers: 2017-2020. Estimates and forecasts to 2022.
Data table 34: Key private label card issuers market shares by credit card numbers: 2017-2020. Estimates and forecasts to 2022.

Appendix VIII: Acquirers and processing

Data table 35: Merchant acquirer credit card market share: Estimates for 2021.
Data table 36: Credit card merchant service charges: 2015-2020. Estimates and forecasts to 2024.
Data table 37: Merchant acquirer debit card market share: Estimates for 2021.
Data table 38: Debit card merchant service charges: 2015-2020. Estimates and forecasts to 2024.
Data table 39: Credit card issuer/issuing processor relationships.
Data table 40: Credit card acquirer/acquiring processor relationships.
Data table 41: Credit card issuing processor market shares by card numbers: Estimates for 2021.
Data table 42: Credit card acquiring processor market shares by the number of POS transactions: Estimates for 2021.

Appendix IX: Online acquiring

Data table 43: Online merchant acquirer market share. Estimates for 2021.

United States Country Report | Selected Extracts

Demographics and Economy:
The United States drives technological innovation globally through corporations such as Apple, Facebook, Google and Microsoft. Americans are keen consumers of electronic products to the extent that smartphone penetration reached 83 smartphones per 100 inhabitants at the end of 2020.

Payments Environment:
The United States has a highly developed and competitive retail banking and payments market. However, emerging payment technologies are only now displacing comparatively old-fashioned POS systems.

Cards market:
This payment cards market enjoys great consumer penetration and merchant acceptance. The average adult made almost 500 card purchases in 2020, placing American consumers among the most active card users in the world.

Mobile Payments:
Adoption of mobile payments in the United States is making progress, albeit at a slower rate than in other developed markets, even though around 83 percent of Americans owned a smartphone at the end of 2020 (up from around 69 percent in 2015).

Profit Pool:
Credit cards continue to be a big revenue driver for American banks. According to VFR's profit pool model, pre-tax profits reached were $37.6 billion in 2020. This equates to an 8.5 percent decrease on the previous year, as spend and revolving balances both fell due to the pandemic.

Card Networks:
A quartet of networks – Visa, Mastercard, American Express and Discover – control the credit cards market. However, the latter pair combined only badge a tenth of cards in issue. Dual-message debit transactions are more commonplace than single message transactions and incur higher interchange fees, although PIN transactions are growing as acceptance increases.

Key Retail Banks and Issuers:
A small number of large banks hold a commanding position in the retail banking sector, most notably JPMorgan Chase, Bank of America, Wells Fargo and Citibank. However, there is a long tail of smaller competitors, including regional and specialist players, ensuring a healthy market.

Acquiring and Processing:
The American merchant acquiring market is a highly attractive and profitable one ... Scale counts in this market as narrow margins in merchant acquiring have made it increasingly difficult to earn a profit without a large-scale operation.

Online Acquiring:
The e-commerce market in the United States has performed well during the period under review, and only saw minimal decline during the 2020 pandemic. By the end of 2021, total e-commerce value is expected to increase by an estimated ten percent over the year before.

Regulatory and Markets Information:
The sheer size and complexity of the American banking and payments sector has resulted in a dense regulatory landscape. Private market
participants and the Federal Reserve have continuously pursued measures to strengthen payment mechanisms and structures.

United States Payments Trends | Entities Referenced

Acce
Active Network
Advent International
Affirm
Afterpay
Alliance Data
Amazon
American Airlines
American Express
Samsung Pay
Apple Inc.
Apple Pay
Apple Pay Later
Aspiration
AT&T
Bain Capital
Bank Mobile
Bank of America
Bank of America Merchant Services
Bank of Hawaii
Barclays
BB&T
BBVA Compass
Best Buy
Bilt
BMO Harris
Capital One
Cayan
Chase Merchant Services
Chevron
Chime
Citibank
Consumer Financial Protection Bureau
Costco
Crédit Mutuel Arkéa
Culiance
Current
Citi Retail services
Dave
Diners Club
Discover
Disney
Doordash
Earthport
Eazy Financial Services
eBay
Ekata
Elavon
Elo
Ethoca
ExxonMobil
Facebook
Federal Reserve
FedNow
Fidelity National Information Services
Fifth Third Bank
First Data
Fiserv
Foot Locker
Global Payments
Goldman Sachs
Google
Google Pay
Heartland Payment Systems
Hello Fresh
Hilton
Home Depot
JC Penney
JPMorgan Chase
Klarna
La Banque Postale
Macy's
Maestro
Marriott
Mastercard
MetaBank
Microsoft
N26
Nets
Netspend
Nissan
NYDIG
OnDeck
Oxygen
PayPal
PayPal Credit
PayPros
PaySimple
Plaid
PNC Bank
QuadPay
RBS
Realex Payments
Revolut
Roostify
Rupay
Sage
Santander
Saudi Payments
Sears
Sezzle
Shell
SICOM
Simple
Square
Square Cash
Stanford Federal Credit Union
Starbucks
SunTrust Bank
SunTrust Bank
Synchrony Financial
Target
TD Bank
The Clearing House
The Financial Crimes Enforcement Network
Transfast
Transfirst
TSYS
U.S. Bancorp
U.S. Bank
United Airlines
US Treasury
USAA Bank
USAlliance credit union
Vantiv
Varo Bank
Venmo.
Verisk Financial Research
Verve
Visa
Vyze
Walmart
Wells Fargo
Wells Fargo Merchant Services
Williams-Sonoma
Worldpay
Zelle

MORE NORTH AMERICA PAYMENTS REPORTS

Verisk Financial Research reports deliver market and competitor intelligence on payments cards, e-money, acquiring/processing, retail banking, and consumer credit in North America. Researchers use both primary and secondary source data and conduct in-depth interviews with senior industry executives and North American experts.

See more North America Country Reports or explore the full range of financial research reports for 72 cards and payments markets worldwide.

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