Payment card spending increased by 1% in 2022 as growth in credit and prepaid volumes counteracted a fall in debit card expenditure
Post-pandemic recovery drove overall growth in global purchase volume
A brand-new report by RBR Data Services, a division of Datos Insights, reveals that growth in purchase volume in 2022 was driven by increasing financial inclusion, digitisation and the easing of lockdowns.
Prepaid and credit see healthy growth, but China causes decline in debit
Global Cards and Payments shows that global credit card volume grew by 7% as many economies gradually recovered from the pandemic, encouraging consumers to make higher-value purchases, such as holidays and luxury items, once again. Prepaid cards, which make up the smallest share of global payments, saw 9% growth as they are often issued to boost financial inclusion, efforts towards which have been growing.
Although consumers have been increasingly taking up debit cards in both plastic and digital wallet form since the pandemic, the value of debit purchases declined by 3%. This fall can largely be attributed to the significant drop in debit volume in China, which represents the largest share of spending in the world.
Cards compete with QR code payments in Asia-Pacific
As lockdown restrictions in China lasted far longer than in other parts of the world, many retail and hospitality outlets were forced to close in 2022, contributing to the country’s fall in debit card volume. Although cashless payments are popular in the Asia-Pacific region, they are not always card-based. Instead, cards are facing competition from QR code payments, which have been surging in popularity in many countries, including China, India, Malaysia and Thailand.
Meanwhile, the study reveals that Middle East and Africa saw 20% growth in card volume as it is home to a number of markets with high levels of underbanked and unbanked populations, allowing significant room for growth. While many consumers in the region previously relied on cash, moves are being made to close the financial inclusion gap with the help of digitisation, technological advances and fintechs.
The easing of travel restrictions boosted card volume in Europe and the Americas
With the easing of lockdown restrictions in Europe, the region saw purchase volume increase by 7% as consumers and businesses started travelling again. In contrast, the re-opening of European stores led to a slight slowing of growth in e-commerce spending.
The Americas also saw growth in card expenditure, increasing by 13% year-on-year. As in Europe, this was largely driven by the rise in cross-border spending once travel restrictions were relaxed; however, here, online shopping also continued to surge post-pandemic. Debit cards, which are increasingly being offered to the region’s lower-income groups to improve financial inclusion, also boosted growth.
Debit is expected to return to growth by 2028 due to widening financial inclusion
Daniel Dawson, who led RBR Data Services’ Global Cards and Payments study, commented: “Global purchase volume is expected to reach $63.5 trillion by 2028, with financial inclusion efforts continuing to boost prepaid volumes, as well as helping to return debit volume to growth. While many economies have been suffering in 2023 due to high inflation, credit volumes are also expected to keep growing as consumers explore credit financing options”.
In line with this, RBR Data Services is forecasting that the number of card-accepting outlets, as well as the proportion that accept contactless and digital wallet payments, will grow significantly by 2028.