Interesting Facts About Credit Card Processing
- August 11, 2018
- Posted by: Dev D
- Category: BPO
Did you know the credit card is almost 100 years old, with the first being issued in the 1920s? These early examples were location-specific charge cards that could be used only at the gas stations or hotels that issued them.
Want another fun fact? Here’s one. Credit cards were originally made of cardboard.
Obviously, much has changed over the past century, with credit cards going from a fringe concept to a global phenomenon. In fact, there are currently 14.4 billion cards in circulation. In a world with about 7.5 billion people, that’s approximately two cards per person (on average).
With that much coverage, interesting facts about credit card processing are bound to emerge. Let’s take a look at some of the coolest ones.
Neat Facts and Stats About Credit Card Processing
Here are some mind-blowing statistics and tidbits:
- The first truly universal credit card was introduced by the Diners’ Club in 1950. Unlike with previous versions, these cards could be used at multiple locations.
- In the early days, most credit cards were actually “charge” cards, balances of which had to be paid in full every month. The concept of carrying a balance from month to month (aka revolving credit) didn’t come along until 1959.
- If you laid all credit cards of the world side by side, you could span the planet more than 3.5 times.
- The average customer acquisition cost for credit card companies is about $80 — once you factor in marketing and administrative expenses.
- The average American household receives about 6 credit card offers every month.
- The brand Visa is a self-referential acronym that stands for Visa International Service Association.
- In the United States, there are approximately 160 million credit card holders, which is about half of the total population.
- The credit card industry receives nearly 500,000 applications every day.
- The average credit card balance in the U.S. is about $6,375. Americans pay more than $100 billion in credit card interest and fees.
- Credit card users spend more (per transaction) than their cash-carrying counterparts. According to recent studies, the average credit card purchase is 12 to 18 percent higher. The reason is not entirely known, but it probably has to do with the “pain of paying.” Like tokens, casino chips and other substitute payment options, credit cards help reduce this pain since the user isn’t spending actual.
- The United States is responsible for roughly 25 percent of all credit card transactional volume worldwide, but it’s home to more than half of all credit card fraud. This will likely change as stateside merchants increasingly move to the more secure EMV credit card processing.
- Chargebacks (aka friendly fraud) results in over $7 billion in merchant losses every year. By 2020, that number is expected to reach $28 billion. For tips on reducing chargeback fraud in your store, check out this excellent article.
- Merchants spend $7 billion annually due to credit card processing fees. Those fees allow retailers to generate lucrative credit card sales from a public that increasingly doesn’t carry cash or use checks.