Payment Instruments: Card Payments

According to the Bank for International Settlements, card-based payment products are electronic money products that provide the customer with a portable, specialized computer device, typically an integrated circuit card containing a microprocessor chip.

Data is from the Bank for International Settlements’ Statistics on payment, clearing and settlement systems in the CPSS countries. Report published in January 2013 with figures on 2011.

Use of Card Payments by Non-Banks (Total Number of Transactions in Millions, 2011)
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* Sum or average excluding those countries for which data are not available. For credit transfers, data for France (prior to 2005) and the United Kingdom include interbank transactions; however, the total number is relatively small.

Use of Card Payments by Non-Banks (Total Value of Transactions in USD Billions, 2011)*
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* Converted at yearly average exchange rates, except as noted.
** For credit transfers and e-money payment transactions, total transactions during the fiscal year ending March of the following year, converted at average fiscal year exchange rates.
*** Sum or average excluding those countries for which data are not available. For credit transfers, data for France (prior to 2005) and the United Kingdom include interbank transactions. Since the value of these transactions is relatively large, cross-country comparison should be treated with caution; consequently, CPSS figures related to credit transfers have not been calculated.

The use of cards as a payment mechanism encompasses any type of payment involving a chip card, including those with debit and/or credit functions. For the purposes of the data gathered by the Bank for International Settlements (BIS) and cited here, it does not include e-money – where the value or cash-equivalent is held electronically but not disbursed through the use of a chip card. It includes cards with a debit function, cards with a credit function, cards with both a credit and debit function, and cards with a delayed debit function.

A delayed debit occurs when the card provider debits the account bi-monthly or monthly, rather than immediately upon purchase, as with regular debit cards. It allows the user to earn interest on their balances over the course of the month and have all expenses debited at one time. It was traditionally a feature of some corporate card programs, but has since grown in popularity for individual cardholders, as well, in some markets.

However, delayed debit cards still account for a just a fraction of the total card market, as credit and regular debit cards dominate most CPSS countries.

According to data from the BIS Committee on Payment and Settlement Systems (CPSS), overall card use grew steadily in all reporting CPSS countries between 2007 and 2011, aside from some minor declines during the financial crisis .

By relative importance as a non-bank payment mechanism, cards are most significant in Saudi Arabia, where they made up 13.7% of overall payments volumes in 2011.

In terms of total number of transactions, card payments are most used in Saudi Arabia again (accounting for 99% of all non-bank payments,) Canada (73.6%,) India (74.7%) and China (76.1%.)

Russia experienced the largest year-on-year growth, with 63.9% more card payments in 2011 than in 2010. In China and India, the use of card transactions has also been rapidly increasing, more than tripling between 2007 and 2011 (from 1.7 billion and 2 billion respectively to 6.4 billion and 5.7 billion.)

In absolute terms, the largest market for card use, both by number of transactions and by total value of transactions, is the United States. It reported more than 73 billion card transactions in 2011 with a total value of more than $4 trillion. Of the total number, around 49 billion involved a debit transaction while more than 24 billion involved credit. The US did not report figures for delayed debit card transactions. Canada, France and the UK also reported strong overall card use figures, although France did not submit figures breaking down card use by debit and credit functions.

In 2011, the UK, India and Canada were big users of debit cards by number of transaction and Brazil and Korea of cards with a credit function.

The UK-one of only five countries reporting delayed debit figures-had the highest value of total delayed debit transactions in 2011, at $57.3 billion – slightly down from $58.5 billion in 2010. However Germany reported a greater number of delayed debit transactions, at approximately 501 million to the UK’s 166 million.

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