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Card payments were the fastest-growing form of noncash payment worldwide between 2001 and 2006, growing by 16% per year and accounting for 54% of 233 billion noncash transactions in 2006, according to the World Payments Report 2008 released Tuesday. The annual report, prepared by France-based consulting and information-technology firm Capgemini and United Kingdom-based Royal Bank of Scotland, seems to caution regulators to tread lightly on interchange fees, which are assessed in most card transactions worldwide. Cards offer convenience and security, Bertrand Lavayssiere, managing director for global financial services at Capgemini France, tells CardLine Global sister publication Cards&Payments. "Part of interchange is there for security, and part of interchange is a guarantee the merchant is going to be paid," he says. The report, released at the European Financial and Marketing Association's Cards & Payments conference in Paris, estimates total noncash payments worldwide grew by 9% per year during the five-year period, including direct debits, which increased by 13% per year. The payments also include credit transfers. Card purchases made up only 39% of noncash transactions in 2001, compared with 54% in 2006. The report projects noncash payments to continue to grow at healthy rates from 2006 through 2013, although it did not offer a breakdown for cards. It predicts the United States would continue to own the largest market share for noncash transactions in 2013 with more than 140 billion transactions–a 6% annual growth rate from 2006. China could overtake Europe that year with more than 100 billion transactions, provided it follows a 30% annual growth scenario, say the report's authors. Europe also would top 100 billion noncash transactions that year. The report also predicts it will take until 2013 for European banks and merchants to fully comply with the Single Euro Payments Area mandates for interoperable card and payment terminals and could take until 2014 to fully rollout SEPA-based direct debits and credit transfers. That would miss the 2010 deadlines for these electronic payments. European consumers increased their card usage by about 10% per year between 2001 and 2006, says the report. "But cash is still increasing significantly in the Eurozone," says Lavayssiere. The report estimates there were 142 billion card purchases made worldwide in 2006 worth 5.8 trillion euros. Cards in circulation increased 9% globally per year from 2001, to 7.9 billion or 1.2 cards for every person on the planet in 2006. Cards branded or cobranded with Visa Inc. and MasterCard Worldwide accounted for 67% of all card purchases in 2006. Both rely on interchange, the report notes. The report ranks Chinese card network China UnionPay as the third-largest scheme.
