Consumers around the world continue to prefer their Visa debit and prepaid cards over cash and cheques. At the Visa International Global Debit Forum 2006 in Prague, Visa announced its most recently released figures on consumer debit and prepaid card usage, and these figures in turn represented 53 percent of Visa's total card volumes, indicating that these easy, secure, non-interest bearing payment cards have beat credit cards as the most popular cashless spending tool in the world.
For year ending on December 2005, total global debit and prepaid volume topped US$2.13 trillion, compared to US$1.78 trillion for the same period in 2004, with these figures translating to a 20% increase.
Significantly, world consumer debit and prepaid purchases at the point of sale – excluding cash transactions such as ATM withdrawals – totaled more than US$1.1 trillion. The growth in purchases was 19 percent year-over-year, demonstrating the growing preference for debit payments for everyday transactions.
Discussing Visa’s diversified services and specifically the benefits of Visa Electron, Mr. Said Shuqom, Visa International General Manager for the Levant said, “Visa continues to provide a wide variety of services that in turn respond to people’s everyday expenditure needs. One of our most popular products, Visa Electron debit cards, has proven to be convenient for those who do not want to worry about having credit. For those individuals who want to enjoy the flexibility of spending, the Visa Electron grants them the privilege of free access to money in there bank account wherever, whenever. People are showing an increase in demand for these services simply because Visa is for everybody. It responds to diversified needs, and thus plays a pivotal role in bringing about economic development.”
Debit cards have traditionally gained the greatest traction in merchant segments such as grocery, petrol/gasoline, restaurants and pharmacies, and consumers are also beginning to realize the convenience of debit payments for categories such as insurance, utilities and telecommunications – typically paper-based transactions.
A comprehensive and defined range of products provides issuers the ability to match the most appropriate debit product features to diverse customers, enabling them to more effectively manage risk and take advantage of new opportunities.
With sustained triple-digit growth, prepaid products represent Visa’s fastest growing payment category globally. Visa members are increasingly seeing the potential for prepaid products and have implemented more than 2,000 programs in more than 30 countries offering innovative payment solutions for payroll, money transfers, gifts, travel, benefits disbursements, youth, general purpose and more. Globally, up to US$5 trillion is spent in cash and cheques that could be more efficiently processed as prepaid electronic payments.
Debit and prepaid products also help in bringing greater economic transparency and efficiencies of electronic payments to developing markets. They provide important access to financial services. For consumers who may be unbanked or new to banking, this feature proves to be problem solving and convenient.
Visa’s annual Global Debit Forum served as an opportunity to present best practices, updates and other information to member and financial institutions interested in developing their debit and prepaid programs. This year’s theme of “Expanding Opportunities – New Merchants, New Channels, and New Programs” emphasizes the growth opportunities to further extend debit and prepaid payments around the world.
From a local perspective, figures released in Jordan present the growing trend in electronic payment as more and more banks in Jordan are issuing debit cards. From December 2004 to December 2005 the number of debit cardholders in Jordan increased 15% to over 1.5 million out of the 1.6 million Visa cardholders; a clear reflection of the Jordanian community’s growing appreciation of the convenience that Visa debit cards provide.
Commenting on demand for debit cards in Jordan, Mr. Shuqom, stated, “Debit is a driver not only because it is more efficient than cash, but because debit empowers the cardholders through the ease and flexibility of “paying now” from funds directly in the cardholder’s deposit. The usage of the debit cards at retail stores in the year 2005 recorded over USD 176 million, an increase of 28 percent compared to the previous year. Cardholders’ transactions also exceeded 1.7 million at retail stores in the duration of the mentioned year, an increase of 19%. These results are evidence that the Jordanian community is adopting debit cards as a method of payment because Jordanians may manage their budget and enjoy the security, reliability and convenience of Visa.
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About Visa:
Visa connects cardholders, merchants and financial institutions through the world’s largest electronic payments network. Visa products allow buyers and sellers to conduct commerce with ease and confidence in both the physical and virtual worlds. As an association owned by more than 20,000 member financial institutions, Visa is committed to the sustained growth of electronic payment systems to support the needs of all stakeholders and to drive economic growth. For more information, visit www.corporate.visa.com.
