Saturday , March 23, 2019

Growth in Remote Card Payments Far Outpaces Point-of-Sale Payment Growth, the Fed Reports

E-commerce, online bill payments, and other forms of card-not-present payments continued their strong growth last year to capture a bigger share of total card payments, according to newly released Federal Reserve data.

The number of what the Fed calls remote payments using general-purpose payment cards grew 22.8% in 2017 from 2016’s levels, more than triple the 7.2% increase claimed by in-person payments. At the same time, the value of remote payments rose 14.8%, also more than triple the 4.4% growth rate for in-person payments.

In all, general-purpose card payments totaled $6.06 trillion last year, up 9% from 2016. Transactions on those cards hit 112.6 billion, up 10.7%. Remote payments, which also include mobile and phone-based transactions, totaled $2.81 trillion and accounted for 46.4% of general-purpose card spend. In 2016, remote payments of $2.44 trillion represented 43.9% of $5.56 trillion in card payments.

The findings come from the 2018 annual supplement to the Fed’s sweeping 2016 triennial payment study. The study is based on data from credit, debit and prepaid card issuers, and payment processors and networks. It was compiled by staff at the Federal Reserve, the Federal Reserve Bank of Atlanta, and Fort Meyers, Fla.-based Blueflame Consulting LLC. 

The study shows EMV chip cards continued on their march to dominance in 2017. “The value of in-person chip-authenticated general-purpose card payments exceeded the value of those without chip authentication for the first time,” the study says. 

The Fed says general-purpose chip card payments totaled $1.67 trillion last year, slightly ahead of $1.58 trillion in payments on non-chip (magnetic-stripe) cards. In 2016, mag-stripe cards claimed $2.29 trillion in payments compared with only $820 billion for chip cards.

“Consistent with the 2015 to 2016 period, in-person chip-authenticated card payments continued to post substantial gains, increasing from 19% of all in-person general-purpose card payments by number and 26.4% by value in 2016 to 41.6% by number and 51.5% by value in 2017,” the report says.

Other notable findings include:

• Data from the nation’s largest banks showed a 2.8% year-over-year decline in the number of ATM withdrawals in 2017. At the same time, the value of the ATM withdrawals rose only 0.5%, less than the approximately 2% inflation rate.

“In part, increasing card payments by number may indicate the replacement of some cash payments, either directly for in-person purchases or indirectly as more shopping moves to remote payments,” the report says.

• Automated clearing house payments exhibited accelerating growth, rising 5.7% by number and 6.9% by value from 2016 to 2017.

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