Visa Inc. published its 4Q11 and full-year 2011 financials and related data yesterday, which included a good deal of information on payment volume trends. One of the most notable trends was the relative growth rates of U.S. credit card and debit card volume over the past five quarters. These two growth rates reached an inflection point in the most recent quarter, with the credit card year-on-year growth rate moving ahead of debit card.
It is notable that the patterns of acceleration of credit card volume growth and deceleration of debit card volume growth have been in place for some time. Forces that have contributed to these trends include:
- Banks’ imposition of debit card fees and elimination of debit rewards, largely due to new debit interchange structures
- Consumers and small businesses changing their perceptions of the credit card, not just as a means to access credit, but also as efficient and convenient payment vehicle (credit card volume growth is much stronger than outstandings growth)
- Issuers aggressively promoting credit card spending with large bonus offers