This year, total worldwide card payments by consumers will amount to $23.1 trillion, exceeding the total amount spent in cash for the first time, according to payment-tracking research firm Euromonitor International.
Consumer card payments will grow 6.6% from 2016 to 2021, and mobile commerce will have an even stronger compound annual growth rate of 23% over the same period, Euromonitor said. Global cash payments, which will total about $22.6 trillion this year, will register a CAGR of only 1.3% over the same period.
- Cash is still used for about 85% of all transactions worldwide, according to research from MasterCard and management consulting firm McKinsey, although that high percentage is due largely to cash being preferred for a great number of small-value transactions.
This is one of those things you hear is about to happen, and then you realize you're surprised it didn't happen years ago. Just think about all the massive purchases we make with credit cards in the U.S. alone — dinner, car services, concert tickets, hotel rooms, engagement rings (sometimes all in the span of one evening).
Meanwhile, in China, debit cards are the big story: Euromonitor said 5.4 billion debit cards accounted for 65% of the payments there. Worldwide, the number of debit cards in circulation grew more than 8% in the last year.
Given Euromonitor's findings, there is likely to be a lot of speculation about 2016 being the tipping point in a worldwide move away from our longstanding cash-based society to one ruled by payments cards. Such speculation might prove to be off the mark in a couple of ways.
First, as noted, cash is still used with much greater frequency, and in some countries where cash is still dominant, that is not likely to change soon. It might not even change in such card-friendly regions as the U.S. and Europe, where some businesses and their customer will always prefer cash, and where everyone from retailers to consumers love to complain about the high transaction fees charged by the major card networks.
Second, the era of payment card dominance could give way fairly quickly to the era of mobile payments. Euromonitor noted the strong CAGR coming for mobile, and that mobile commerce grew about 53% in the last year alone. Cards play a big role in funding mobile payment platforms, but mobile still may steal some thunder from payment cards by pushing them out of a direct role in checkout line, both in-store and online.