Keeping It Classic: Card Payments Dominate in Retail (2019-2024)
Expansion persists in retail sector as card transactions surge according to new research - Retail Sector Seeing Persistent Expansion in Card Transactions Based on Recent Research
Over time, 'card payments' have taken the retail world by storm. A study by EHI, a Cologne-based research institute, reveals that as much as 63.5% of retail sales, totaling €495 billion in 2024, were card-based – a 1.7 percentage point surge from the previous year. Meanwhile, those good ol' green bills slumped to 33.8% of sales.
This shift seems to be the new normal, with financial solutions and invoice purchases as well as vouchers making up the remainder. For comparison, in 2019 – pre-Corona times - over 46% of sales were still made in cash.
Interestingly, although cash transactions have dropped overall, it seems it still reins supreme in terms of frequency. Back in 2024, cash was used in over half (54.6%) of the nearly 20 billion retail transactions.
The pandemic scare did take a toll on shopping trips, slashing them down to a mere 16.6 billion in 2020. Rediscovering the pre-pandemic levels, the number of retail visits reached 16.6 billion in 2024. In over 44% of these shopping sprees, customers opted for cards, roughly doubling the 2019 share.
MobilePay, mobile payment processes via smartphones or smartwatches, has seen an upsurge too, with a whopping 12.9% of all card-based transactions now processed in this manner. This marks a 5.4% increase from 2023.
More consumers have also been seen withdrawing cash while shop-snatching, with the total value rising by around 10% to €13.57 billion year-on-year.
The study analyzed data from 499 firms, accounting for approximately 100,000 businesses from 35 sectors with a combined turnover of €314.8 billion.
Breaking It Down: Insights on Card Payments
- Digital Wallets and Contactless Payments: The use of digital wallets and contactless payments has surged, with their popularity skyrocketing. In the UK, for example, the proportion of card transactions using digital wallets jumped from 8% in 2019 to 29% in 2023[5]. This trend reflects a broader shift towards more convenient and seamless payment solutions.
- Volume of Transactions: The number of debit and credit card transactions has climbed consistently. In the UK, consumers made 2.2 billion debit and credit card transactions in September 2024 alone, marking a 4.5% increase from the previous year[5].
- Market Growth: The global market for prepaid cards has experienced significant growth, fueled by their adaptability and widespread appeal. This segment is expected to keep expanding, with the market valued at $2.2 trillion in 2024 and projected to hit $4.1 trillion by 2030[4].
Top Dogs in the Pack
While specific market leaders in the retail card payment sector remain undisclosed in the available data, several influential players typically rule the roost:
- Visa and Mastercard often lead the pack due to their extensive networks and wide acceptance.
- American Express is another key player, enjoying a strong following for its premium rewards programs and services.
- Digital Wallet Providers like Apple Pay, Google Pay, and Samsung Pay have also carved out significant market shares thanks to their integration with mobile devices.
These companies frequently invest heavily in digital advancements and security measures to maintain their leading positions and cater to evolving consumer preferences.
Looking Ahead: The Future Awaits
As consumers continue to embrace digitalization and contactless payments, the future of card payments in retail seems more promising than ever. With digital wallets and contactless payments on the rise, card companies must stay competitive and attentive to emerging trends without compromising security or convenience. Additionally, the rapid growth of prepaid cards suggests a larger shift toward more secure and managed payment solutions, which could further reshape the retail payments landscape in the years to come.
- In light of the increasing popularity of digital wallets and contactless payments, it is essential for businesses to invest in vocational training for staff to ensure they can handle these modern payment methods effectively, thereby enhancing customer satisfaction and improving sales.
- As the global market for prepaid cards continues to expand, financial institutions and retailers might want to consider adopting vocational training programs related to this sector, focusing on technological advancements, business strategies, and security measures to future-proof their operations and capitalize on this thriving market.
