Capgemini: Debit Cards Continue to Win Market Share from Credit Cards

By Rob Starr, Content Manager, Big4.com

The World Payments Report (WPR*) 2012 released recently by Capgemini, RBS, and Efma shows that debit cards continue to gain market share from credit cards, and the use of electronic and mobile payments continues to show exponential growth.

As more consumers embrace electronic, mobile and debit card payments, industry innovation will continue to focus heavily on these payment methods. According to industry analysts, there were an estimated 28.3 billion electronic and mobile payment transactions globally** in 2011, and in 2010 more than one in three non-cash payments globally was made using a debit card, up 15.2 percent, according to the report. But with only 2.1 percent of all mobile users making m-payments, the potential for additional growth is still huge, with mobile payments set to reach 17 billion by 2013 and e-payments 31.4 billion by 2013.

The report also shows that the real payment innovators are organizations with a granular understanding of the needs of their target customer segments, as well as their own capability to innovate. The WPR cites Japanese telecommunications organization NTT DOCOMO, which has succeeded in quickly growing to create a critical mass of 35 million registered users (or half the market) with its “Mobile Wallet”. Mobile Wallet, or Osaifu-Keitai in Japanese (as known locally), is a proximity payments instrument enabled through compliant mobile phones, with services going beyond just NFC payments and including: electronic money, identity card, loyalty card, public transport ticketing (includes railways, buses, and airplanes), and credit card. By using open standards, building on existing payment instruments (such as credit cards) and considering loyalty programs and CRM services for merchants, the program has proven successful over the past eight years.