In 2003, for the first time ever, the use of Visa-branded debit cards worldwide outgrew that for credit cards, with debit cards having volume of USD 1.48 trillion, and credit cards, a volume of USD 1.45 trillion. To give a different context, Visa’s 2003 debit card volume rose 17 per cent over the previous year, while its credit card volume grew by 5 per cent. Debit card volume in Visa’s Asia-Pacific markets, where 38.4 million debit cards are in issue, similarly rose by 23.1 per cent over 2002 totals, with Malaysia having the biggest growth, at 275.1 per cent, India next, at 193.1 per cent, and Singapore at 101.9 per cent.
Research firm, Global Insight, confirms Visa’s 90 per cent increase in debit card volume over the past four years, to be impacting on cash and check payments, which have fallen by a respective four and seven per cent in the same period. The Nilson Report similarly states that the number of debit cards in issue worldwide exceeded one billion in 2003, and predicts debit card sales volume to double by 2007. Visa cited the performance of its debit card products as a highlight of 2003, with 16.3 per cent growth globally, total sales volume of USD 1.4 trillion and a 22 per cent sales growth for its Electron card, to USD 432 billion.
In 2003, volume on Visa debit card transactions exceeded that for Visa credit card transactions in the US, even if credit cards still account for most sales volume. Moves by financial institutions to expand their debit card products helped increase Visa’s debit volume in 2003, while merchants are also leveraging the ‘changed’ debit card landscape to cut their operating costs. Greater credit card acceptance at fast-food restaurants such as McDonalds’, at real estate firms and at daycare centers may however affect the future debit/credit ratio as US consumers are lured by the ability to charge daily purchases to their cards.
(CNNfn)