This piece was first published on May 4, 2020.
COVID-19 is a black swan event, a global pandemic unlike any event in the past century. It has significantly impacted the US economy and, with it, the US debit market. Transactions plummeted 25-30% in mid-March as shelter-in-place rules went into effect and businesses closed.
As a result, a number of market trends have been rapidly accelerated, including the migration of card-present transactions to card-not-present activity, greater adoption and usage of contactless and mobile wallets, and an increase in the volume and complexity of disputes and fraud.
While volumes have recovered to some extent from their lows, there is still considerable uncertainty over debit’s future. With the potential for the pandemic to transform every aspect of the business for debit card issuers, the time to act is now.
Our report lays out the macro-economic impact of the pandemic, the first and second order implications for the debit market, and the future outlook. It also covers a list of recommended actions for issuers to protect their debit business, and eventually grow.