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Tuesday March 23, 01:30
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Cards Will Dominate Consumer Spending By 2007
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Credit and debit cards will facilitate over 40 per cent of all consumer expenditure in most of the world’s largest economies within five years, according to a survey from Morgan Stanley. Debit cards, in particular, will outgrow credit cards in most world regions, EPI reports, and will continue their dominance in Europe, where debit card use in Germany and the Netherlands will comprise over 40 per cent of card spending. In the US, conversely, debit card usage as a percentage of consumer spending will grow to 13 per cent by 2007, up from 7 per cent now, while credit card use will grow by 3 per cent, to 23 per cent of spending.
By 2007, the UK’s debit and credit card usage will reach parity, when both will account for 23 per cent of consumer expenditure, according to Morgan Stanley. Italy, by contrast, is the European only country where credit card use will outgrow that of debit by 2007. Recent figures from MasterCard corroborate Morgan Stanley’s observations, with Europe representing MasterCard’s largest market for Maestro and Cirrus debit cards in 4Q 2003, at over 293 million cards. Debit card use will continue to grow in the Asia-Pacific, the exception being Australia, where credit and debit cards are tipped to achieve similar growth.
In terms of credit card issuance, Morgan Stanley predicts large US firms to dominate the global market, with Citigroup, the world’s largest card issuer, retaining its leadership. HSBC and General Electric rank second in Morgan Stanley’s analysis, at a 9 per cent market share each, with JP Morgan Chase/Bank One and MBNA in third place, at 8 per cent each. MBNA is also expected to drive credit card growth in Europe, if it capitalizes on “significant growth” opportunities, while American Express’ recent pushes into debit cards underscore the maturity of its global network, according to Morgan Stanley.
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