Card Payments

Card payments, including debit and credit card payments, grew to 103.3 billion with a value of $5.72 trillion in 2015, up 19.9 billion or $1.07 trillion since 2012.⁹ Card payments grew at an annual rate of 7.4 percent by number or 7.1 percent by value from 2012 to 2015. In 2015, the number of card payments comprised over two-thirds of all noncash payments.

The number of payments with non-prepaid debit cards in 2015 accounted for nearly 60 percent of card payments and over 40 percent of all core noncash payments. The number of non-prepaid debit card payments grew somewhat faster than their value; hence, the average value of non-prepaid debit card payments dropped slightly from $40 in 2012 to $38 in 2015.

The number of prepaid debit card payments reached 9.9 billion with a value of $0.27 trillion in 2015, up 0.6 billion or $0.04 trillion since 2012. Almost all of the growth in prepaid debit card payments by number and value came from general-purpose prepaid cards, which can be used over the same general-purpose networks as non-prepaid debit cards. General-purpose prepaid card payments increased to 3.7 billion in 2015 by number, up 0.6 billion from 2012 to 2015, which was much less than the growth of 1.8 billion from 2009 to 2012.¹⁰ The annual growth rate of 5.6 percent by number from 2012 to 2015 was also much slower than the annual growth rate of almost 34 percent reported for the 2009 to 2012 period. The average value of payments using these types of cards dropped slightly from $35 in 2012 to $34 in 2015.

Private-label prepaid card payments declined slightly by number, but rose somewhat by value from 2012 to 2015. In 2012, such payments totaled 3.7 billion by number or $0.05 trillion by value, while, in 2015, they totaled 3.6 billion by number or $0.07 trillion by value. Private-label prepaid card payments dropped at an annual rate of 0.3 percent by number but rose 15.0 percent by value. Hence, the average value of these payments rose from $13 to $20.

Payments made by prepaid EBT cards increased slightly from 2.5 billion in 2012 to 2.6 billion in 2015, or 1.7 percent per year, while the value of these payments also increased slightly from $0.07 trillion to $0.08 trillion, or 0.20 percent per year. The average value of prepaid EBT card payments declined slightly, from $30 to $29.

In 2015, non-prepaid debit and general-purpose prepaid cards were used in 5.8 billion cash withdrawals at ATMs, virtually the same level as in 2012, after dropping from 6.0 billion ATM cash withdrawals in 2009. The average value of ATM cash withdrawals rose from $118 to $122 between 2012 and 2015, continuing an upward trend in average value since 2003. ¹¹

The number of credit card payments was approximately half the number of debit card payments in 2015, although the value of credit card payments was nearly 25 percent greater. Growth in credit card payments was led by general-purpose credit cards, rising from 24.4 billion in 2012 to 31.0 billion in 2015, up 6.6 billion or 8.4 percent per year. With a slower growth rate by value (7.3 percent per year), the average value of general-purpose credit card payments dropped from $93 to $90 over the same period. Private-label credit card payments grew from 2.5 billion to 2.8 billion between 2012 and 2015, or 3.8 percent per year, and the average value rose from $112 to $128.

Card payments can be made in person, typically using the card itself at a terminal. They can also be made remotely, typically using the card number, which can be entered into an e-commerce website or given over the telephone for one-time purchases or regular bill payments.

Data from the general-purpose card networks illustrate changes in in-person and remote payments (figure 3).¹² Remote payments represented 19 percent of all general-purpose card payments in 2015, up from 16 percent in 2012. Although the increase in share was modest, the growth rate of remote general-purpose card payments was about 15.3 percent per year by number, more than double the growth rate of in-person payments. Because the share of in-person payments only fell from 84 percent to 81 percent between 2012 and 2015, however, the total growth of in-person payments was 13.2 billion, over twice as much as the total growth of remote payments. Non-prepaid debit card payments led growth in both categories, with in-person card payments increasing nearly three times as much as remote payments.

Figure 3. Number of remote and in-person general-purpose card payments by card type, 2012 and 2015

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General Purpose Card Fraud Types and Chips

The transition to chip cards is one of the notable recent developments intended to help thwart in-person counterfeit card fraud in the United States (box 1). In 2015, general-purpose card payments using chips reached 1.5 billion in the United States, markedly up from about 41 million in 2012. Still in the early stages of a transition in 2015 only 2 percent of U.S. in-person general-purpose card payments were made using a chip. In stark contrast, 97 percent of card-present transactions across the countries in Europe were made using chips in 2015. ¹³ Australia and Canada are also further along in chip deployment by several years.

The major general-purpose payment card and ATM networks for the 2015 survey provided allocations of fraudulent card transactions for six commonly recognized card-industry fraud types that can be associated with in-person or remote fraud channels:

Fraud types

• Counterfeit card: Fraud is perpetrated using an altered or cloned card.
• Lost or stolen card: Fraud is undertaken using a lost or stolen card.
• Card issued but not received: A newly issued card sent to a cardholder is intercepted and used to commit fraud.
• Fraudulent application: A new card is issued based on a fake identity or on someone else’s identity.
• Other: "Other" fraud includes account takeover and other types of fraud not covered above.
• Fraudulent use of account number: Fraud is perpetrated without using a physical card.

Fraud channels

• In-person fraud: Fraudulent payments are made when the card user is physically present.
• Remote fraud: Fraudulent payments are initiated when the card user is not physically present, typically online, by mail, or by telephone.

While mapping of fraud types to fraud channels is subject to some error, counterfeit and lost or stolen card fraud generally reflect in-person fraud, while fraudulent use of account number reflects remote fraud.

Data on fraud by channel in the United States show 54 percent in-person fraud compared with 46 percent remote fraud (figure 4). In comparison, the sum of counterfeit card fraud and lost or stolen card fraud for the United States is almost 55 percent, which corresponds closely to the 54 percent allocation of fraud to the in-person channel (table 1).¹⁴ Similarly, the sum of the remaining categories, which is dominated by fraudulent use of account number, is about 45 percent, which corresponds closely to the allocation of fraud to the remote channel. Given that the share of remote payments is estimated to have been small (19 percent) relative to the share of in-person payments (81 percent) in 2015, the data show that the remote fraud rate by value is already higher than the in-person fraud rate.

Figure 4. Distribution by value of fraudulent remote and in-person general-purpose card payments, 2015

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Note: Includes fraudulent payments by general-purpose credit and debit cards. In-person fraud includes ATM fraud.

Note: Figures may not sum because of rounding. Data for the United States include fraudulent payments by general-purpose credit and debit cards. Includes ATM fraud.

N/a Not available.

Data from other countries, which generally obtain their fraud allocation data from many of the same card networks that participated in this study, can be similarly categorized, allowing comparison of U.S. fraud shares with those in countries farther along with adoption of chip cards (table 1). ¹⁴ General-purpose card fraud figures for the United States in 2015 offer a striking contrast to comparable fraud data for Australia, Canada, France, and the United Kingdom. While the balance of card fraud in the United States is weighted toward in-person fraud, fraud in other countries is highly skewed toward remote fraud. Reports from leading chip-adopting countries have cited declining counterfeit fraud accompanying rising chip adoption, and a similar effect may be observed in the United States in coming years. ¹⁵ In light of the growing adoption and use of chip cards, efforts to secure remote payments will likely also grow in importance.

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References

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