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The slow but steady climb that the U.S.
consumer credit card industry has made back to prerecession performance levels
will continue in 2016. Purchase volumes on general purpose credit cards will
continue to increase, along with delinquency and charge-off rates, as issuers
loosen their underwriting standards and consumers take on greater levels of
debt. The massive investments made by issuers and merchants in chip card
technology in 2014 and 2015 will bear significant fruit in 2016 as the
penetration rates for EMV cards and payment terminals reach meaningful levels.
The coming year will mark a continuation of
these long-standing trends and strategic initiatives. However, 2016 will also
mark the breakthrough moment for at least one of the disruptive digital innovations
that have been looming over the U.S. consumer credit card industry. Whether
it’s the mass market adoption of third-party mobile wallets from Apple, Google,
and Samsung or the launch of a merchant-friendly mobile payments alternative or
the wholesale digitization of the credit card acquisition process, it seems
likely that this year will see the promise of at least one of these innovations
Mercator Advisory Group’s latest research
note, 2016 Outlook In-Depth: U.S. Consumer Credit Cards examines the
continuing trends and emerging innovations that are expected to shape the
profitability and strategic plans of U.S. credit card issuers in 2016.
“Despite steady growth metrics and a
surprisingly successful chip card transition, issuers cannot take their foot of
the gas in 2016. Payment security is not going away and the ongoing digitization
of the credit card, both in acquisition and utilization, will give issuers
plenty to work on in the coming year,” comments Alex Johnson, Senior Analyst, Credit Advisory Service at Mercator
Advisory Group and the author of the research note.
This document contains 11 pages
and 5 exhibits.
Companies mentioned in this
research note include: Apple, Chase,
Discover, Google, Lending Club, NerdWallet, OnDeck Capital, Prosper, Samsung,
Starbucks, Target, Wallaby, and Walmart.
One of the exhibits included in this note:
(Click to Enlarge)
Highlights of the research note
- Projections for the U.S. consumer credit
card market’s primary profitability and risk metrics
- Predictions for the U.S. consumer credit
card market based on new competitive dynamics, changing consumer behaviors, and
emerging technologies observed by Mercator Advisory Group
- Recommendations for how U.S. credit card
issuers and merchants should respond to the trends identified in this