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Charge Card Market Expected to Reach $6.2 Billion by 2032—Allied Market Research

 
2022
Charge Card Market

Report Code : A225271

quote The charge cards have gained dominance in the market for several data security and privacy concerns are driving advancements in card security features, including tokenization and multi-factor authentication, to protect cardholder information from cyber threats. quote

Pradeep Ravi - Lead Analyst
BFSI at Allied Market Research

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According to a new report published by Allied Market Research, titled, “Charge Card Market,By Type (General Purpose Charge Card, Retail Charge Card, Travel Charge Card, Business Charge Card, Others), By Issuer (Banks, NBFCs), By End User (Individuals, Corporate, Government): Global Opportunity Analysis And Industry Forecast, 2023-2032". The charge card market was valued at $2.2 billion in 2022, and is estimated to reach $6.2 billion by 2032, growing at a CAGR of 11.3% from 2023 to 2032.

The charge card market has witnessed significant growth trends, which include the rise of digital wallets and contactless payments, allowing users to make quick and secure transactions using their charge cards via smartphones and smartwatches. In addition, there is a surge in emphasis on rewards and loyalty programs, with card issuers offering attractive benefits such as cashback, travel rewards, & exclusive discounts to attract and retain customers. Furthermore, the market has seen an expansion of premium and co-branded cards, catering to specific consumer needs and preferences. Overall, these charge card market trends reflect a shift toward convenience, customization, and value for consumers in the charge card market analysis.

Furthermore, major players in the charge card market have undertaken various strategies to increase the competition and offer enhanced services to their customers. For instance, in August 2022, American Express introduced the Platinum Card that switches from a charge card to a credit cards with no annual fee for new cardmembers. This offers new customers who sign up with added flexibility, removing the requirement to pay off the card balance in full at the end of the month.

Furthermore, in June 2023, Stripe, a financial infrastructure platform for businesses, announced a new charge card program for Stripe Issuing, Stripe’s commercial card issuing product. With the addition of charge cards, FinTechs, and financial platforms create and distribute virtual or physical charge cards that allow their customers to spend on credit rather than the funds in their accounts providing new revenue streams for financial platforms and allowing them to offer new financing capabilities to their customers. The charge card program provides flexible funding options for platforms. Once a card is used to make a purchase, the transaction needs to be funded. Most charge card programs require the platform offering the card to cover the transaction immediately, which forces platforms to maintain large cash balances. However, with Issuing, platforms send funds to Stripe after the transaction settlement date. This helps platforms reduce the funds they need to keep in reserve, freeing that cash for other purposes.

By end user, the corporate segment was the highest-growing segment in the charge card market in 2022. This is attributed to the fact that corporate end users are influencing market trends by seeking cards that offer enhanced features and benefits. They are driving innovation in charge card offerings, pushing providers to offer rewards, expense management tools, and robust reporting capabilities. This competitive environment fosters product development and diversification, further stimulating market growth. Meanwhile, the individuals segment is expected to be the fastest-growing segment during the forecast period in the charge card market. This is attributed to the fact that consumers seek financial control and transparency, for which card issuers respond by introducing innovative features such as expense tracking tools and exclusive rewards programs. End users who value these benefits drive the market to evolve and expand.

By region, the charge card market growth was dominated by North America in 2022. This is attributed to the revival of travel and tourism that impacts the charge card market, as these cards often come with travel-related benefits. The recovery of the travel industry has led to increased demand for premium charge cards in North America. Therefore, the shift toward premium cards, high creditworthiness requirements, and global travel trends drive the growth of the charge card market in North America. On the other hand, Asia-Pacific is expected to grow as the fastest-growing region during the forecast period. This is attributed to the rise in innovative payment solutions, including digital wallets and peer-to-peer lending platforms, which have increased the overall awareness and acceptance of electronic payments, including charge cards. In addition, some governments in Asia-Pacific have introduced initiatives to promote digital payments and financial inclusion, which indirectly boost the use of charge cards.

The COVID-19 pandemic had a significant economic impact on the charge card industry. As businesses shuttered and individuals faced financial uncertainty, the demand for credit and charge cards fluctuated. In the initial stages of the pandemic, there was a sharp decline in consumer spending, leading to reduced card usage. People were more focused on saving and cutting expenses, which meant lower balances and fewer transactions. Credit card companies, in response, faced challenges such as increased delinquencies and a need to tighten lending standards to mitigate risk. This resulted in reduced credit card charges limits for many cardholders and stricter approval criteria for new applicants. In addition, the travel and hospitality industries, key beneficiaries of rewards cards, were severely impacted, leading to a decrease in the attractiveness of these cards.

Key Findings of the Study

  • By type, the general-purpose charge card segment led the charge card market size in terms of revenue in 2022.
  • By issuer, the banks segment accounted for the highest charge card market share in 2022.
  • By end user, the individual segment accounted for the highest charge card market share in 2022.
  • By region, North America generated the highest revenue in 2022.

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quote Charge Card Market by Type (General Purpose Charge Card, Retail Charge Card, Travel Charge Card, Business Charge Card, Others), by Issuer (Banks, NBFCs), by End User (Individuals, Corporate, Government): Global Opportunity Analysis and Industry Forecast, 2023-2032 quote

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