The global credit card payments market revenue was valued at $138.43 billion (about $430 per person in the US) in 2020 and is projected to reach $263.47 billion (about $810 per person in the US) (about $810 per person in the US) (about $810 per person in the US) by 2028, growing at a CAGR of 8.5% from 2021 to 20281. In this post, we will take a closer look at countries that have top usage of credit cards, where and how they spend with credit cards and growth rate of using credit cards country-wise in the last 10 years and how Brickendon can help banks revamp their existing structure to increase usage of the credit card by consumers.
Credit card usage varies significantly by country, with some countries having a higher rate of credit card usage than others. Here are some examples of credit card usage by countries:
- United States: The United States has one of the highest rates of credit card usage in the world, with over 80% of adults owning at least one credit card. Credit cards are widely accepted in the US, and many people use them for everyday purchases.
- Canada: Credit card usage is also high in Canada, with around 60% of adults owning at least one credit card. Credit cards are widely accepted in Canada, and many people use them for both small and large purchases.
- United Kingdom: Credit card usage in the UK is also high, with around 60% of adults owning at least one credit card. However, debit cards are more popular than credit cards in the UK, and many people use debit cards for everyday purchases.
- Australia: Credit card usage in Australia is high, with around 55% of adults owning at least one credit card. Credit cards are widely accepted in Australia, and many people use them for both small and large purchases.
- Japan: Credit card usage in Japan is low compared to other developed countries, with around 20% of adults owning at least one credit card. Cash is still the preferred payment method in Japan, and many businesses do not accept credit cards.
- China: Credit card usage in China is also relatively low, with around 15% of adults owning at least one credit card. However, credit card usage is increasing rapidly in China as more people become financially stable and as the country becomes more developed.
- India: Credit card usage in India is low, with less than 5% of adults owning a credit card. However, credit card usage is growing rapidly in India as the middle class expands and becomes more financially stable. By May 2022, India’s spends on credit card was $15 Billion [3].
The following charts [2] provide a comparison on different statistics on credit cards usage:
The following chart [4] presents factors that determine use of credit card:
The above stats make a good business case and the need for the hour for revamping the credit card structure by bringing some changes to the program that would make consumers use credit cards more instead of debit cards.
How Brickendon can help?
Brickendon can help banks with transformation to encourage consumers to use credit cards more. Here are some of the strategies that banks can employ to increase credit card usage:
- Offer rewards and incentives: Banks offer rewards and incentives to customers for using their credit cards more, but the problem is creating awareness. For example, banks offer cashback on purchases, reward points that can be redeemed for merchandise or travel, or discounts at partner merchants. By offering tangible benefits, banks encourage customers to use their credit cards more frequently, but it is not always the case. Using a debit card or credit card has no difference in cost to consumer. They have more to gain than to lose by using a credit card.
- Promote credit card usage through targeted marketing: Brickendon can help banks use targeted marketing campaigns to promote credit card usage among specific customer segments. For example, banks can offer promotions and discounts to students, young professionals, or frequent travelers, who are likely to use credit cards more frequently. By tailoring their marketing messages to specific customer segments, banks can increase credit card usage among those groups.
- Simplify the application process: Brickendon can help with digitalization of the credit card application process to make it easier for customers to obtain credit cards. They will not have to visit a branch, fill in an application etc. This can include reducing the documentation requirements, streamlining the application process, and offering instant approvals.
- Offer low-interest rates on EMI’s: Implementation of ideas like banks can offer low-interest rates on big purchases of products by converting them to EMI’s and earning an interest rate would encourage customers to use them more frequently. This has already been a momentous success in India and has a potential to tap into the market in other countries.
In conclusion, Brickendon can help banks with a variety of strategies to encourage customers to use credit cards more frequently. By offering rewards and incentives, simplifying the application process, providing digital tools for managing credit cards, partnering with merchants, and targeting specific customer segments with marketing campaigns, banks can increase credit card usage and generate more revenue from credit card transactions.
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Sources:
[1] https://www.alliedmarketresearch.com/credit-card-payments-market-A11836
[2] https://shiftprocessing.com/credit-card/
[3] https://www.techsciresearch.com/report/india-credit-card-market/4206.html
[4] https://balancingeverything.com/credit-card-statistics/
