Global Card Issuing Industry: A Mid-2024 Pulse Check

The global card issuing industry is predicted to go from strength to strength over the next few years. The global payments market is projected to grow at a CAGR of 10.5%, reaching USD 4.78 trillion by 2029. Meanwhile, payment cards in circulation worldwide are expected to increase from 26.71 billion in 2023 to 29.99 billion by 2028.

Yet the proliferation of digital payments, regulatory changes and evolving consumer expectations are all issues that are impacting the global card issuing industry in 2024. Given these rapid transformations, we thought it would be useful to provide a mid-year assessment.

Consumer demand and digital transformation

Consumer preferences are rapidly reshaping the global card issuing industry. The surge in digital payments, marked by widespread adoption of contactless and mobile technologies, has become a defining trend. Digital wallets like Apple Pay and Google Pay are becoming the norm, offering unprecedented convenience.

Simultaneously, Buy Now, Pay Later (BNPL) solutions are gaining traction, blurring lines between traditional and alternative financial services. In response, card issuers are integrating BNPL options and launching their own digital wallets.

Personalisation and security are at the forefront of consumer demands. AI-driven personalisation enables tailored experiences, improved customer segmentation and enhanced engagement. Meanwhile, biometric payments are addressing security concerns while offering frictionless transactions.

To remain competitive, card issuers must deliver value beyond basic payment functions. This involves leveraging customer data for personalised services, collaborating with trusted third-party providers, and embracing digital identity solutions. As the industry evolves, success will hinge on effectively balancing innovation, security and personalisation.

Key regulatory changes across the globe

The global card issuing industry is experiencing significant regulatory shifts, with authorities worldwide implementing new rules to address the evolving landscape of digital payments, consumer protection and financial innovation.

• North America: The Consumer Financial Protection Bureau (CFPB) has proposed new rules for digital wallets and payment apps, aiming to enhance consumer protection in the rapidly growing digital payment sector. Concurrently, potential changes to interchange fees are under consideration, which could significantly impact revenue models for card issuers and payment networks.
• Europe: The EU has introduced Instant Payment Regulations, mandating faster and more efficient cross-border transactions within the bloc. Additionally, progress continues on the Digital Euro project, with the European Central Bank exploring the potential implementation of a central bank digital currency.
• Asia-Pacific: India has implemented a multiple card network mandate, fostering competition and reducing dependency on a single network. In Australia, upcoming regulations are set to expand oversight of payment systems, granting increased authority to ASIC and APRA. Meanwhile, Singapore's Monetary Authority (MAS) has broadened the scope of regulated payment services under the Payment Services Act, encompassing a wider range of digital payment activities.
• Middle East: The UAE has introduced Payment Token Services and Open Finance Regulations, promoting innovation whilst ensuring consumer protection in the digital finance sphere. Similarly, Saudi Arabia has implemented new Regulations of the Law of Payments and Payment Services, modernising its payment infrastructure and regulatory framework.
• Africa: Nigeria has issued new guidelines for International Money Transfer Services, aiming to streamline cross-border transactions and enhance financial inclusion. South Africa has released a Directive on cybersecurity and cyber-resilience within the national payment system, strengthening the security of digital financial services. Kenya is preparing amendments to its Payments Act, potentially reshaping the country's digital payment landscape. What is noteworthy is that fintech innovation is driving monetary evolution across the continent; for instance, in Senegal, Wave is expanding rapidly, offering low-fee money transfer services between countries.

These regulatory changes reflect a global trend towards fostering innovation, enhancing consumer protection, and ensuring the stability and security of payment systems in an increasingly digital financial world.

Impact on global card issuing industry

Furthermore, competitive realignments and evolving security challenges are driving major changes to the global card issuing industry. A major shake-up is underway with Capital One Financial's agreement to acquire Discover Financial for $35.3 billion , potentially creating a credit card giant with a 19% share of the $1.3 trillion revolving consumer loans market. This move exemplifies the industry's trend towards consolidation, particularly evident in the Buy Now, Pay Later (BNPL) sector. Moody's Investors Service predicts few BNPL companies will remain independent, citing intense competition and regulatory pressures.

Simultaneously, the industry faces mounting security and fraud prevention challenges. With an estimated 35% of e-commerce transactions being malicious and fraud expected to cost the industry over $400 billion in the next decade, companies are turning to advanced technologies for solutions. Artificial Intelligence, particularly generative AI, is emerging as a powerful tool in fraud management, capable of creating more genuine-looking fraud scenarios for improved detection.

Balancing innovation and trust

As we progress towards the end of 2024, the global card issuing industry continues to evolve rapidly, shaped by digital transformation, regulatory shifts and major consolidations. The expansion of digital, mobile and social commerce channels presents both opportunities and challenges, requiring businesses to balance frictionless transactions with robust security measures.

Success in this evolving landscape will hinge on the ability to leverage cutting-edge technologies whilst building customer trust, with companies that can effectively navigate these competitive shifts, adapt to regulatory changes, and address security challenges best positioned to thrive.

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