Purchases of goods and services totaled $9.550 trillion in 2015, up 3.4% year-on-year (YOY). The four card-based methods of payment of credit, debit, prepaid, and electronic benefits transfer generated $5.665 trillion in purchases or 59.32% of all consumer payment systems volume.
Credit cards accounted for $2.932 billion, 30.70% of volume. Debit cards accounted for $2.420, 25.34% of volume. Card-based volume is expected to increase every year through 2020, when these methods collectively are projected to account for 69.69%, according to the Nilson Report.
Visa reports the number of EMV (chip) cards in the U.S. nearly doubled in 2016, topping 408 million payments cards.
Of the 408.1 million Visa chip cards circulating in the U.S., 188.7 million are credit cards and 219.4 million are debit cards.
In November 2016 Visa stated for U.S. EMV enabled debit cards, merchants have flexibility to use either the U.S. Common Debit AID or the Visa AID. Merchants are never required to ask the cardholder to choose the AID for processing debit transactions. Merchants can exclusively route U.S. debit transactions using the U.S. Common Debit AID if they so choose. Merchants are never required to use the Visa AID to process U.S. debit transactions.
Although debit doesn’t experience as much fraud volume as credit, it is critical to incorporate tools like 3-D Secure 2.0 in consideration of the disruption that debit card fraud can create for an account holder.
Several of the EFT debit networks are launching or rapidly developing dual-message debit solutions, in which the authorization and the clearing of information is accomplished in two distinct transactions.
Nearly half of small businesses use business debit, creating both a strong user base and an opportunity to grow for debit issuers. However, use of personal demand deposit accounts (DDAs) and debit products persists, even among larger small businesses. Converting additional businesses to debit may be harder than it should be.