Ecommerce and other card-not-present debit transactions surging, PULSE study reveals

Tuesday 11 August 2020 12:00 CET | News

Discover Financial Services’ PULSE has revealed that card-not-present transactions volume grew at 10 times the rate of card-present in 2019, while issuance of contactless cards nearly tripled.

According to the press release, card-not-present debit transactions surged 21% year-over-year in 2019. The 2020 Debit Issuer Study found that one card-not-present transaction type – account-to-account (A2A) transfers using debit – is the fastest growing category of debit, doubling year-over-year and accounting for 40% of total debit growth.

These increases reflect growth in consumer use of debit to shop online and to fund purchases and person-to-person transfers using apps such as PayPal, Venmo, and Zelle. In addition, more business-to-consumer payments are being delivered via debit, including insurance payouts and payments to gig-economy workers such as drivers for ride-share services. While the growth rate for card-present transactions was a modest 2%, these transactions still represent 73% of all debit transactions.

Furthermore, mobile wallet payments using debit cards in 2019 jumped 94% year-over-year, reaching a record 1.3 billion transactions. Apple Pay accounted for approximately 1.1 billion (85%) of those transactions as it outperformed Samsung Pay and Google Pay, posting 100% growth year-over-year. 

However, changes in government guidance, business practices and consumer behaviour in response to the COVID-19 pandemic are expected to accelerate the major shifts the 2020 Debit Issuer Study identified.

In addition to greater use of debit in card-not-present environments, the average ticket size for these purchases is larger than a transaction made with a card. The average card-not-present transaction totalled USD 61.48 in 2019, while the average card-present purchase totalled USD 34.10.

Besides, even prior to the pandemic, issuers participating in the 2020 Debit Issuer Study cited offering contactless debit cards as their top priority. While 29% of respondents were issuing contactless debit cards to at least some cardholders at the end of 2019 (up from 10% at the end of 2018), another 37% expect to be doing so by the end of 2020. 

Overall, based on issuers’ stated plans in early 2020, 87% of debit cards are expected to be contactless by year-end 2022, as a result of the COVID-19 pandemic.

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Keywords: Discover Financial Services, Pulse, study, card-not-present, transactions , card-present, contactless cards, 2020 Debit Issuer Study, A2A, account-to-account, debit, PayPal, Venmo, Zelle, person-to-person, business-to-consumer payments, insurance payouts, mobile wallet, Apple Pay, consumer behaviour, COVID-19, contactless debit
Categories: Payments & Commerce
Countries: World
This article is part of category

Payments & Commerce