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Sunday, December 23, 2018

Fed study IDs card payments growth driven by CNP transactions

The number and value of card payments continue to grow while check and ATM transactions decline. Card-not-present (CNP) transactions appear to be leading the overall card payments charge, while chip-authenticated cards dominate card-present transactions, according to a new report from the Federal Reserve Board.

The sum of all credit, debit and prepaid card payments grew by 11.3 billion between 2016 and 2017 to total 123.5 billion, the Fed said. The total value of card payments in 2017 was $6.5 trillion, up from $6.0 trillion in 2016.

"The increase in the number of card payments in 2017 was boosted by continued strong growth in the number of card payments made remotely, including shopping and bill paying," the Fed stated. The number of these card-not-present transactions grew 22.8 percent from 2016 to 2017, compared to a 7.2 percent increase for card-present transactions, the Fed said. The value of CNP payments increased 14.8 percent, far outstripping the 4.4 percent increase in the value of card-present transactions.

"The number of in-person chip-authenticated card payments also recorded a noteworthy gain in 2017, increasing to 41.6 percent of all in-person general-purpose card payments. For the first time, chip-authenticated payments captured more than half of the value of in-person general-purposed card payments," the Fed added.

At 10.5 percent, prepaid debit cards registered the fastest growth rate between 2016 and 2017, at 10.5 percent, followed by debit cards at 10.4 percent and credit cards at 9.4 percent, according to the Fed's analysis. But credit cards saw the most growth in terms of value, registering 10 percent growth between 2016 and 2017, followed by debit cards (6.5 percent) and prepaid (3.0). The average debit card payment in 2017 was $35, down from $36 in 2016. The average prepaid card payment was $23 in 2017, down from $25 in 2016, and the average credit card payment remained unchanged at $88.

Payments sent via the automated clearing house grew 5.7 percent by number and 6.9 percent by value from 2016 to 2017, according to the Fed's analysis. Check payments declined 4.8 percent by number, while the total value of checks grew by 7.5 percent from 2016 to 2017. ATM transactions, meanwhile, fell 2.8 percent by number and rose 0.5 percent by number, the Fed reported.

The Fed conducts comprehensive studies of noncash payments (cards, ACH and check) every three years, and reports supplementary data in the intervening years. The last study was published in 2017 and contained data from 2016. The Fed's latest report – Federal Reserve Payments Study: 2018 Annual Supplement – includes new data from 2017. It was published on December 20 and is available for downloading at www.federalreserve.gov/newsevents/pressreleases/files/2018-payment-systems-study-annual-supplement-20181220.pdf . end of article

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