Credit& debit card usage is on an upward trend

Credit& debit card usage is on an upward trend

Financial corporations are booming as people prefer to shop online.

The pandemic forces more and more people to use credit& debit cards as a safe method of paying, helping the growth of both e-commerce and financial corporations such as Visa and Mastercard. Moreover, it increased the number of people experiencing first-time-transactions.

In Visa's case, 13 million Visa card owners made online transactions for the first time. It happened in March in Latin America, once the lockdown started. The number of credit card users increased in the U.S. by 18%, while physical transactions fell by 45%. Visa is looking to make some changes regarding the chargeback procedure and the guest-checkout processes, as a large number of people cancel travel reservations. Moreover, they want to reduce the 23 fields required to fill-in with information to just one button.

Although after the lockdown measures ease and people will be able to go outside, Visa expects growth of touchless commerce; the usage of tap payments increased by 150% since the same period last year in the U.S. alone.

Another beneficiary of this situation is Mastercard. Yesterday it stated that it had a rebound in credit card usage as a result of the loosening of social-distancing rules. The transaction trend is positive, close to the normal feed; as of now, they consider people to be in a stabilization phase when they spend less.

Visa stock price declined 15% in the first quarter of 2020, although it later re-gained 4.8% in just one month. USA30 lost 21% in three months, 2.9% in the last month. Mastercard stock lost 1.1% during regular trading hours, but it compensated in extended trading by gaining almost 3%.

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Sources: marketwatch.com, yahoo.com

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