The recent Retail Bank Research report on the global use of payment cards revealed that the decline in credit cards and usage is going to continue:

Source & Copyright©2016 - Retail Bank Research 

Overall, the role of payment cards is changing, e.g. the payment preferences of Asian consumers are gradually changing from the plastic credit card to mobile and online alternatives. Not only this, banks are adjusting their card portfolios accordingly with Citi’s Asian operation reportedly reducing its number of card offerings in Asia from 270 to just over 100 while globally they reduced their credit card products by 60%.

Stop accepting payment cards?

Stop accepting credit cards? No because:

• although the number of credit card products is declining, the role of the credit card as a deferred payment device will not disappear
• having a credit card as the payment card registered and held on your e-commerce sites will ensure that you get more sales because at the decision point in the purchase the customer doesn’t have to worry whether they have funds or not in their current account.

Stop accepting charge cards? For some retailers yes, but for others this niche product is important for some customers. On balance, most retailers could drop charge cards without seeing any impact, even the most dedicated Amex card holders carry a VISA or MasterCard alternative card.

Stop accepting pre-paid cards? For most retailers, the VISA / MasterCard based prepaid cards are indistinguishable from normal payment cards, so the answer is NO.

Stop accepting debit cards? No chance, debit cards are going to increase their domination.

Overall, for the foreseeable future, most retailers will have to continue to accept all types of payment cards.

The oustanding issues

Some of the outstanding issues for retailers are:

• how exploit the increasing use of domestic cards in China, India and Brazil?
• how to offer payment facilities in their e-commerce web-sites?
• which new payment systems, if any, to offer in the digital world? 

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CTMfile take: Most consumers’ payment habits change very slowly, but younger consumers payment habits are changing much faster. Large global multi-national corporations will need to offer alternative payment methods, but which and how many?