This article was written by Kendrick Sands, Industry Manager. The original article was published by Euromonitor International. You can find the article here.  

Technology and innovation have fuelled advancements in payments and lending and are poised to contribute to the further evolution over the next five years. Key trends we are following include the acceleration of credit card payment value growth over other card functions, increasing options in funding for consumer payments like BNPL and the utilisation of fintech to increase access to financial products and services and to reduce the value lost to fraud in card payments. Card payment growth is forecast to be more balanced geographically, but the leading regions of Asia Pacific and North America continue to play a leading role and are expected to account for 52% and 32%, respectively, of card payment value growth over the next five years.

Credit card value expected to outpace other card functions

While debit cards have continued to generate the most payment value in absolute terms globally, credit has a higher projected growth rate over the forecast period.

Commercial and personal credit have the highest projected growth rates of all card functions from 2025 to 2029 with expected CAGRs of 6.2% and 5%, respectively

^{Source: Euromonitor International}

Access to credit cards in emerging markets and higher utilisation in developed markets are the leading components of the forecast growth. Consumers over the previous decade who adopted basic financial cards have become qualified for credit cards in recent years, contributing to the emerging market growth. India is an example where credit is gaining traction and contributes to the expected 23.2% CAGR for credit payment value over the next five years.

In some developed markets, the increase in credit value was a result of consumers utilising a higher share of credit extended to them. Personal credit utilisation rates increased by 9.5% in the UK and 2.8% in the US from 2020 to 2024, in part to counter increased inflation but also in response to increased confidence in the economy.

BNPL and alternative lending models expand globally

The broad adoption of BNPL across markets has significantly increased what goods and services are available to a wide range of consumers. The alternative lending channels are not only limited to consumers who lack access to funding alternatives but are also utilised by consumers who are able to purchase a product or service in full but prefer to segment payments due to the low cost option.

Total BNPL value across the 47 researched markets increased by 10%, or USD26.7 billion, from 2023 to 2024

^{Source: Euromonitor International}

The growth of BNPL is coming from more merchants, and more merchant types, offering the funding option. As a funding option, the offering was limited to larger purchases but is now available for everyday purchases. The long-term sustainability of the lending channel will vary by market and will largely depend on regulation. The US and Brazil utilise the funding option the most and accounted for a combined 47% of total BNPL value in 2024.

Fintech increasing access to financial products and services

Fintech became further integrated into consumer payments over the previous year and is positioned to provide additional value, going forward. The key categories fintech has advanced are access to financial products and services, convenience and security of the products, and rewards and loyalty.

Fintech has brought increased access to financial products and services in both developed and developing markets. Digital banks are becoming common globally and can offer financial products and services at a lower cost compared to mainstream financial institutions. The total number of adults over the age of 15 that were unbanked has dropped by 122 million since 2020, while the number of financially underserved consumers has declined by 31 million over the same period across the 47 researched markets.

The value lost to fraud on financial cards increased in absolute value terms and as a portion of total card payments in 2024 following a decade-long trend. With the continued migration of retail online, there is greater potential for fraudulent activity. While the existing financial card networks and issuers are heavily invested in security, it has not proved effective at reversing the direction of fraud and could benefit from fintech innovation in the space.