Digital wallets help drive credit card growth

Digital wallets are helping drive the number of credit cards issued via digital card issuance platforms.

The number of these credit cards is set to exceed 321 million globally by 2027, up from 120 million in 2023.

The staggering growth of 170% reflects the use of new advanced digital capabilities, such as digital loyalty schemes and instant issuance. Card issuers use these to combat competition, including buy now pay later schemes.

Digital card issuance platforms allow card issuers to create cards using an API-driven approach. This enabled cards to be delivered instantly to digital wallets, with the option for a physical card which significantly boosts flexibility.

The market forecast comes from a new report from Juniper Research entitled Credit Cards Strategies: Innovation Analysis, Digital Transformation & Market Forecasts 2023–2027.

It found that credit cards will account for over $9.7 trillion in spend globally by 2027. This represents a significant opportunity for card issuers to drive revenue growth by choosing the optimal credit card strategy. It found that rising affluence in emerging markets will be a significant driver of credit card adoption. As such, digital card issuance platforms are critical to delivering credit offerings in these mobile wallet-dominated markets.

Research co-author Nick Maynard said: “In emerging markets, the ability to instantly issue digital cards will be a key factor in users choosing credit cards over other payment methods. Card issuance platform vendors must ensure localisation to enable cards to be quickly pushed to the wallets popular in each market.”

The research also predicts that by 2027, the monetary value of rewards for users from credit card use will reach $103 billion globally, driving overall adoption. It recommends that card issuers focus on app-based loyalty to maximise the appeal of these rewards; partnering with well-connected digital loyalty programme providers to maximise their appeal. If issuers fail to do this, they will lose out to better-connected vendors in a highly competitive credit cards market said the report.