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Some say payment cards are yesterday. But they could be key to the future…

Far from losing their relevance, cards should be at the heart of any bank’s payment strategy.

Hans Sjölund / June 02, 2023

Contrary to exaggerated reports of the death of payment cards, they should in fact still be at the heart of any bank’s approach to payments. Hans Sjölund, Head of Card Sales & Business Develoopment at Tietoevry Banking, tells you why.

Amid all the hype about a digital future in which consumers transact instantly between their accounts using digital wallets, it can be easy to lose sight of the present – and, indeed, what’s going to happen next. While there’s no doubt that the longer-term future of payments is digital, that doesn’t mean cards won’t feature in that mix – and based on current evidence, they are more popular than ever.

In a new white paper, we argue that payment cards are more popular than ever coming out of the pandemic – and that banks must include them as a key part of their payments strategy for the next five to ten years. For instance, PCM’s Digital and Card Payments Yearbooks 2022-20231 show that card use grew above trend across Europe last year. The number of European cards in circulation grew by 20% more than the long term average, at 5.18%, while spending on cards shot up by 17.64% – almost twice the long-term average. What’s more, cards still constitute 57.3% of all cashless payments on average across 33 countries in Europe, with credit transfers and direct debit payments responsible for a majority of the remainder.

Consumers love cards – and they’re getting stronger

In our new paper, Card use keeps growing – the strategic implications we examine why cards remain so popular with consumers – and what it means for banks. Sources vary in their exact percentages, but research undertaken for the European Central Bank in late 20222 suggests that 55% of consumers in the euro area prefer to pay by card, while research for Visa from a year earlier3 says 65% of US consumers are most comfortable with contactless card transactions coming out of the pandemic. There may be a number of reasons for this preference, not least consumer’s familiarity with the card as a payment instrument during the challenging times we’ve experienced, as well as the convenience of paying with a contactless card.

What’s beyond dispute is that contactless card payments have accelerated usage over the last five years, while new multi-function cards that combine debit and/or credit functions with loyalty, buy-now-pay-later and other products have enhanced the card’s utility. Finally, new security features, from biometric cards through to 3DS2 on the acquiring side have all helped to shore up the security and comfort users have with card use.

NB! If you're at Money20/20 in Amsterdam between 6-8 June 2023, we'll be happy to discuss the growing use of cards with you at our stand C80!

To find out what growing card use means for your bank’s payment strategy, download the new white paper from Tietoevry now.

Hans Sjölund
Head of Sales, Cards
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