The U.S. Cards and Payments market size is predicted to be worth USD 9.28 trillion in 2024 and is anticipated to reach USD 14.41 trillion by 2029 with a CAGR of 9.2% during the forecast period.
The U.S. Cards and Payments market has accounted for significant growth in the past years and is projected to have notable growth in the coming years due to the increased use of credit and debit cards. The United States has a highly developed payment card market due to the support of great awareness regarding electronic payments and a well-established banking infrastructure. According to data provided by the McKinsey survey in 2022, almost 9 out of 10 respondents are using some digital payments; it also stated that people using two or more digital payments rose to 62% from 51% in the previous year. The escalating technological advancements and rising awareness regarding the benefits of digital and card payments are boosting the market revenue of the cards and payments market in the United States.
According to a study report by the Federal Reserve, cash usage was approximately 20% of all transactions in 2021, and by 2024, the percent decreased to 16% of all transactions. Only 60% of businesses and organizations accept cash in the United States. The limited acceptance of cash is positively impacting regional market revenue. The increasing demand for credit cards due to the various benefits they provide, majorly the "buy now and pay later" trend, is escalating the demand for credit cards among the people. Approximately 73% of North Americans get a credit card by age 25, making credit cards the most common credit experience among younger adults. The United States alone accounts for 166 million credit card holders in 2023. The major factors accelerating the demand for credit and debit cards are ease of convenience, rising inflation rates, and the standard of living that enhances the adoption of cards—according to the Federal Reserve, credit card debt in the U.S. soared to USD 905 billion in the fourth quarter of 2023, crossing the pre-pandemic levels. The growing trend of contactless payments is augmenting the utilization of digital payments and card payments among people, contributing to the expansion of market size—the rising usage of mobile wallets, especially among the GenZ and Millennials, fueling the market revenue growth.
According to recent reports, digital wallets held the most significant share due to their popularity in online payment methods in 2023, followed by credit cards. Most payments in the United States rely on interbank payment services like ACH network and wire transfer systems to send money to another bank. The accelerated technological advancements and IoT's high penetration in the region augment the market growth opportunities.
The rising inflation and the increased interest rates on the cards hamper the expansion of the U.S. cards and payments market. The merchants must pay fees to process card transactions, which will take more work for small business organizations. This is expected to limit the market growth in the region. The increased usage of credit cards leads to overspending and debt accumulation, where high interests add up to the unpaid balance, creating challenges for the customers and hindering the adoption of cards for payments. Another primary concern regarding the expansion of the U.S. cards and payments market is privacy concerns, as digital payments store the information of the customer and the card, which is highly open to fraud or misuse. This factor may impede the market's growth rate by limiting the adoption rate among the people in the coming years.
Debit cards in the U.S. account for over half of the total cards in circulation in the U.S. and are increasingly used at POS. Debit cards segment held the considerable share in the market revenue due to various advantages like contactless payment, and they held the notable share during e-commerce. During the review period, the transactional value and frequency of use at POS increased, but the average transactional value declined compared to the ATM transactions. Visa and MasterCard are widely used debit cards across the country. According to a recent US Statista Global Consumer survey, 52 consumers have used debit card cards online in the last years, and 47% reported using credit cards.
The credit cards segment held the dominant share in the U.S. cards and payments market in 2023. Various reports state that credit cards hold 42% of total payments at the point of sale, whereas debit cards held 28% in 2023. During the review period, the number of credit card transactions at POS recorded a CAGR of 7.88% and is estimated to grow at 4.11% during the forecast period. In contrast, the frequency of use at POS terminals is estimated to grow at a CAGR of 5.7% till 2029. American Express holds the lion's share of the credit card market, offering different options for different sections of people.
The smartphone-operated payment solutions are slowly grabbing the dominant share of payment cards in online purchases. The e-commerce value of the United States was estimated to be USD 673 billion in 2023 and is expected to grow substantially in the years ahead. Although credit cards and debit cards, along with PayPal, account for the dominant share of e-trade, it is evident from market reports that mobile wallet transactions will replace them sooner. Digital wallets and credit cards held the most significant share in the e-commerce segment.
POS terminals accounted for a large volume of transactions compared to ATMs. The transactions for online shopping using eWallet, bank transfers, and cash on delivery have predominantly increased compared to past years, driving the POS segment growth. The recent trends reveal that the alternate payment options' enhanced payment experience and customer convenience can greatly influence card payments for e-commerce purchases. The U.S. Cards And Payments Market is slowly moving towards EMVs, replacing the magnetic stripes with chip-enabled cards. In 2018, nearly 60% of card transactions included chip-based cards, and over 75% of ATMs supported these cards.
The improvements in technology and smartphone use have led to the switch from POS terminals to mPOS terminals in the U.S. markets. There has also been an increase in NFC-based POS terminals, along with the mobile payment options of Apple Pay, Samsung Pay, Android Pay, PayPal, Google Pay, and others. Equinox Payments, Ingenico, PAX Technology, and Verifone are some of the significant manufacturers of POS terminals.
The credit transfers segment held the largest market share in the U.S. Cards and Payments market, as credit cards are most commonly used in the United States for transferring funds, bill payments, and purchases. The U.S. banking infrastructure enhances the usage of Automated Clearing House (ACH) payments and online banking transfers, as these provide convenience and flexibility for customers. These advantages propel the segment's growth rate.
Direct debit is only used in the United States, unlike in the United Kingdom and other European countries, which will record stable growth for the segment.
The payment cards segment is estimated to grow prominently during the forecast period due to the rising usage of credit and debit cards, which augments the segment's growth.
Some of the dominating players in the US Cards And Payments Industry are
Frequently Asked Questions
Technological advancements such as mobile wallets, contactless payments, blockchain technology, and biometric authentication are significantly influencing the USA cards and payments market. These technologies enhance security and convenience for consumers.
Mobile payment adoption in the USA is on the rise, with services like Apple Pay, Google Pay, and Samsung Pay becoming increasingly popular. The convenience and security of mobile payments are driving consumer adoption, particularly among younger demographics.
Recent regulatory changes affecting the USA cards and payments market include stricter data privacy laws, enhanced security standards such as EMV chip technology, and regulations aimed at reducing interchange fees for merchants.
The USA cards and payments market faces several security challenges, including fraud, data breaches, and cyber-attacks. To combat these threats, the industry employs advanced security measures such as encryption, tokenization, multi-factor authentication, and AI-driven fraud detection systems.
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