March 28, 2023

I’ve an absurd variety of bank cards. Most I by no means use, however as a result of common credit score account age is a crucial think about credit score rating calculations, I’m very reluctant to cancel any. 

Wanting by my card pile lately, I used to be shocked by the variety of totally different bank card issuers represented. Most belonged to one in every of two main cost networks — Mastercard and Visa, which personal a lot of the U.S. bank card market — however there have been practically a dozen banks in there too, from large names like JPMorgan Chase and Capital One to locals you’ve most likely by no means heard of.

This train obtained me fascinated with bank card market dynamics extra usually. Which cost processors and issuers have the most important market share, and how much transaction volumes do they course of annually? So I dove into the numbers with Cash Crashers information analyst Jonathon Watterson.

Right here’s what we discovered.

U.S. Credit score Card Market Share by Fee Processor: 2021 Knowledge

First, complete U.S. market share for the 4 cost processors working on this nation.

You may see that Visa has by far the most important market share, with 61.6% in 2021. That’s greater than double its closest rival, Mastercard, with 25.7%.

Market Share By Processor Pie Chart 1

Then once more, with 87.3% of complete U.S. bank card market share in 2021, Visa and Mastercard successfully have a duopoly right here. That’s when two firms management the overwhelming majority of a specific market.

American Categorical takes a lot of the the rest: 10.5% in 2021. Uncover is a distant fourth with 2.2%. 

Are Amex and Uncover Losing Their Promoting {Dollars}?

It appears notable that each American Categorical and Uncover appear outmaneuvered by Visa and Mastercard regardless of promoting closely in america.

Are they losing their advert {dollars}?

Not precisely. American Categorical and Uncover are uncommon examples — the one two in america, in truth — of bank card cost processors that additionally problem their very own bank cards. In different phrases, they’re each cost processors (or cost networks should you want) and bank card issuers.

In contrast, Visa and Mastercard are cost processors solely. They function the networks that actually a whole bunch of bank card issuers (banks and different chartered monetary establishments) depend on to execute transactions. In flip, they depend on all these issuers for income. 

Of the 2 different cost processors, American Categorical has its hand in each pies. It operates the community its personal playing cards run on and likewise offers community providers to different issuers, a few of which use multiple cost processor. For instance, the U.S. Financial institution FlexPerks Gold American Categorical Card runs on the Amex community, whereas the U.S. Financial institution Money+ Visa Signature Card runs on the Visa community.

Uncover is extra of its personal factor, a self-contained bank card ecosystem. Relatedly, it’s not accepted by as many retailers as Visa or Mastercard, particularly abroad, although its protection has gotten higher lately.

U.S. Fee Processor Market Share Since 2007

Visa has lengthy been the highest bank card processor in america, and its market share has solely grown over time. Its share in 2021 (61.6%) is down solely marginally from 2020 (61.8%), which was its high-water mark going again a minimum of to 2007.

Annual Market Share By Processor Bar Chart 1 1

Visa gained 8.8% of the U.S. bank card market between 2007 and 2021, or 9% between 2007 and 2020. These positive factors got here primarily on the expense of American Categorical, which dropped from a 15.6% share in 2007 to a ten.4% share in 2020 and a ten.5% share in 2021.

Mastercard additionally misplaced market share over the interval, from 28.2% of the U.S. bank card market in 2007 to 25.7% in 2021. Probably the most dramatic transfer got here between 2007 and 2011, when Mastercard hit a sequence low of 24.9% market share. It ranged between 24.9% and 26% for the rest of the interval, although the pattern has been up since 2017, when it bounced off 25%.

In the meantime, Uncover has steadily misplaced market share, dropping from 3.5% in 2007 to 2.2% in 2021. Like Mastercard, Uncover’s low-water mark got here in 2017, when it claimed simply 2% of the U.S. bank card market. Notably, American Categorical claimed 13% of the market in 2017, towards 10.5% in 2021, so it has been on a downtrend as its three rivals ascend.

International Credit score Card Market Share: Visa, UnionPay, Mastercard & The Relaxation

As in america, the worldwide bank card market is dominated by a handful of bank card processors.

Global Market Share By Processor Doughnut Chart

The largest remains to be Visa, however with solely 40% of the worldwide market. The subsequent greatest isn’t Mastercard however UnionPay, a China-based cost processor that dominates monetary transactions in a lot of the Jap Hemisphere. UnionPay has 32% of the worldwide bank card market.

Then comes Mastercard, with 24%. “The remainder,” together with Amex and Uncover, account for simply 4% of complete world bank card transaction volumes.

U.S. Market Share by Credit score Card Issuer

Lastly, let’s have a look at how the highest seven main U.S. bank card issuers share the market right here. Keep in mind, except American Categorical and Uncover, these are banks with their very own branded bank cards, not cost processing networks. 

Some are among the many largest banks in each america and the world, together with JPMorgan Chase, Financial institution of America, and Citibank. Others are homegrown establishments that kind of restrict their actions to america, together with Uncover and Capital One.

We don’t have precise market share percentages for these issuers as a result of the U.S. issuer market is so fragmented. Actually, a whole bunch of banks problem their very own branded bank cards, and whereas solely a pair dozen have any vital market share, we’d want a extra complete information set to offer you correct figures. However relaxation assured that these seven issuers signify an enormous chunk of the U.S. bank card market.

With super-popular cash-back and journey bank cards just like the Chase Freedom Limitless Credit score Card and the Chase Sapphire Most well-liked Card, plus greater than a dozen co-branded lodge and airline bank cards, it’s no shock JPMorgan Chase leads the pack.
It’s additionally not stunning that Amex is a comparatively shut second, because it has greater than 10% of complete U.S. bank card market share in 2021. Citibank, Capital One, Financial institution of America — they’re additionally all the types of huge monetary establishments you’d anticipate finding excessive on bank card market share lists.

Steadily Requested Questions About Credit score Card Market Share

It is a lot of information to soak up, so let’s take a step again and reply some frequent questions on bank card market share one after the other.

What Is Visa’s Market Share?

Visa’s complete market share is 61.6% in america and 40% globally. In different phrases, Visa processes 61.6% of all bank card transactions within the U.S. and 40% of all bank card transactions globally. It’s the world’s greatest bank card cost processor by transaction quantity.

What Is Mastercard’s Market Share?

Mastercard’s complete market share is 25.7% in america and 24% globally. Mastercard is america’ second largest bank card cost processor by transaction quantity and the third largest on the earth, after UnionPay.

What Is American Categorical’ Market Share?

American Categorical has 10.5% of the U.S. bank card market. As a result of Amex is principally a U.S. firm, its share of the worldwide bank card market is far smaller — nicely beneath 4%.

What Is Uncover’s Market Share?

Uncover’s complete market share is 2.2% in america. Like Amex, Uncover is principally a U.S. firm, so its world market share is far decrease. It’s one in every of “The Relaxation” firms that isn’t damaged out individually within the world chart above.

What Is UnionPay’s Market Share?

UnionPay has 32% of the worldwide bank card market. As a result of it doesn’t function in america, this share comes totally from different elements of the world, particularly the better Asia-Pacific area and Africa.

Are Visa and Mastercard Higher Than American Categorical?

Visa, Mastercard, and American Categorical all have devoted followers. That is very true for American Categorical, which has a fame for providing extra beneficiant advantages and higher customer support than both Visa or Mastercard.

In fact, all three processors have strengths and weaknesses. Visa and Mastercard do have a slight edge when it comes to service provider acceptance as a consequence of American Categorical’ larger processing charges. So Amex customers generally have to search out one other solution to pay — however that is much less and fewer frequent as Amex adoption will increase. 

Remaining Phrase

Visa has been the dominant bank card cost processor in america for the higher a part of twenty years. 

Mastercard has executed its finest to maintain tempo, and collectively, the 2 firms management greater than 85% of the U.S. bank card market. They deal with eight or 9 in each 10 bank card transactions, leaving Amex and Uncover to battle over the remainder.

I’m unsure it is a good factor for U.S. customers or small companies. The bipartisan group of federal legislators behind the proposed Credit score Card Competitors Act agrees with me. However their invoice, which might encourage extra entrants into the U.S. cost processing trade and hopefully decrease charges paid by companies and customers, faces fierce opposition — and tens of millions in lobbying {dollars} — from the 2 large incumbents.

We’ll see what occurs; I’m not holding my breath. Within the meantime, the bank card funds panorama is what it’s.