Projected Growth of Payment Card Use Opens Doors to Innovation, Competition for Market Share

Global payments from credit, debit, and prepaid cards are expected to grow to more than 1.1 trillion by 2029, representing a 43% growth over the same number of transactions performed in 2024. This projection is one of the recent findings in the Nilson Report that examines credit, debit, and prepaid card transactions from American Express, Diners Club, Discover, JCB, Mastercard, UnionPay, and Visa.

Growth approaching 50% in just five years is an eye-opening number for an industry that’s mature in many parts of the world. The card industry is also facing more competition for payments than ever before. 

Relatively recent innovations in payments, including account-to-account payment tools and the rapidly expanding buy now, pay later industry, threaten to stymie the growth of card payments. But, so far, that’s what most alternative payment forms are to the card industry — a threat. 

The purchase volume of transactions made with cards in the U.S. card network — American Express, Discover, Mastercard, and Visa — topped $10.7 trillion in 2024, an increase of nearly 6% from 2023’s spend figures. The Nilson Report also noted that Americans have more than 34 million locations in the U.S. where they can use their cards to purchase goods and services.

A healthy industry that’s expected to continue to grow in coming years is likely to draw the attention of businesses keen on expanding their services to grab a larger slice of the market share.

Up to this point, payments technology firm Toast has primarily operated as a provider of point-of-sale hardware and software solutions for the restaurant industry. The company held a webcast in late February to cover fourth-quarter earnings, and executives discussed Toast’s plans to bring its payment solutions to partners operating in the retail space, such as convenience and grocery stores. 

Toast plans to make staffing investments in 2025 to form a sales team focused on building its retail strategy, according to a comment from Elena Gomez, Toast’s Chief Financial Officer, during the earnings call.

Toast’s move to serve new merchants is an important development in the company’s young history. Toast — which started in 2012 — didn’t record a full year of profitability until 2024. But its momentum in recent years has been staggering. 

The company reported a year-over-year improvement to its net income of more than a quarter billion dollars in 2024. Toast reported a net income loss of $246 million in 2023 and a net income gain of $19 million for 2024. Steve Fredette, Toast’s President and Co-Founder, addressed the company’s strategy earlier this year.

“As the lines between retailers and restaurants continues to blur and more retailers transition to the cloud, we see a clear opportunity for Toast to be the technology platform of choice for convenience stores, bottle shops, and grocers — providing a modern inventory management experience in an easy to use platform, and helping consumers grow in new ways,” Fredette said. “We look forward to continuing to build our offerings for the retail community.”

As consumers increasingly turn to cards to complete transactions, it creates more opportunities for criminals to engage in card fraud. More than 60 million Americans were victims of credit or debit card fraud in 2024, and unauthorized purchases with fraudulently obtained card information surpassed $6.2 million. 

The credit card industry is using innovative solutions to combat fraud. Mastercard is betting that a small change to the appearance of physical cards will have a big impact in mitigating fraud. The company has announced its plans to phase out the use of numbers on credit cards by 2030.

But the card industry is employing innovative measures to do more than combat fraud. Visa is branching out into the account-to-account arena to offer another way for customers to send payments to one another.

With a growing number of card transactions expected through the rest of the decade and industry titans capitalizing on innovative enhancements, a credit card issuer without a deep research and development budget may be wondering how it can thrive in an evolving market.

We caught up with Deryn Russell, Founder of Inside the Upgrade, to hear her thoughts on how issuers can attract new customers and retain existing ones in a dynamic competitive landscape. Russell has been educating cardholders since 2020 about how they can use credit card rewards to travel luxuriously. She told us that issuers can enhance their rewards offering to attract more customers.

“Consumers are getting smarter about maximizing points, and flexible rewards programs will win,” Russell told us. “Especially in the current macroeconomic environment, issuers should expand transfer partnerships and offer more lucrative earning categories beyond travel and dining — think everyday spending like gas, streaming services, and groceries.”

To satisfy cardholders, issuers must ensure that card benefits are easy to access.

Russell told us that many issuers offer perks that look enticing on paper, but they make accessing card benefits inconvenient for cardholders. According to Russell, issuers should focus on making rewards accessible to people who don’t spend thousands of dollars with their credit cards each month but still desire meaningful rewards.

“While premium cards get the attention, the real growth opportunity is in mid-tier and no-annual-fee cards that offer a clear upgrade path,” Russell said. “It is incredibly hard to convince someone to dive into a $695 annual fee card, even if it would completely make sense for their spending habits.”

With more than 1.1 trillion card payments expected in 2029, card issuers can grow their revenues by examining their current programs and redesigning them where necessary to make them more attractive to prospective cardholders.

“In short, card issuers that simplify rewards, enhance benefits, and make earning accessible will dominate the next wave of card adoption,” Russell told us.