Guest blogger Ryan Douglas details how consumers’ use of cards to pay for transactions and fund loans continued to increase over the past year, as banks reported strong growth in receivables and transaction volume. 


Key themes

  • Banks reported strong year-over-year increases in purchase volume and receivables
  • Loss rates increased compared to the prior year due to ongoing normalization and seasoning of loan growth; however, most banks also reported moderate declines in loss rates compared to the prior quarter
  • Intense competition to acquire new accounts has pushed returns for several banks lower
  • Mobile and digital remain key areas of focus, particularly in account acquisition, servicing, and enhanced use cases
  • Banks have noted that conditions remain highly favorable for the US consumer as unemployment remains low and debt to disposable income remains manageable
  • Increases in revenue at several issuers are attributable to net interest margin expansion and strong loan and purchase volume growth

Notable happenings

Partnership renewals:

Disney and Chase; Lowe’s and Amex Business Rewards Card

New partnerships:

Air Canada announces intent to seek new credit card partner; Synchrony and Mavis Discount Tire; Alliance Data and Viking Cruises

New products/features:

PayPal and Synchrony introduce new 2 percent cashback Mastercard; Stein Mart introduces Elite credit card and revamped rewards; Delta and United introduce new cards

Mobile & tech:

P. Morgan Chase announces plan to acquire fintech firm WePay; PayPal and Chase sign agreement to expand mobile payments

Industry trends (based on non-retail card issuers in scorecard section)

Issuer scorecard—Q3 2017 ($ in billions)

 

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