Credit Card Results

Robert B. McKinley has summarized the credit card charge volume in the U.S. of the four major credit card issuers for the past four years in the recent issue of CardTrak. The accompanying table shows relatively small changes in market share over the past three years. Visa and Discover gained, American Express held its own, and MasterCard lost market share. Annual credit card charge volumes (in billions of dollars) ranged from $537.3 for Visa (a new record); MasterCard, $303.6; American Express, $186.4; and Discover, $70.6.

U.S. Market Shares of Annual Credit Card Charge Volume, 1997-1999

(Percentage distribution)

             Source: CardData – www.carddata.com

Data from the April issue of Credit Card News indicate that Discover is coming on strong, although the data reflect Discover’s total volume worldwide, rather than just in the United States. During the first quarter of 2000, its transaction volume reached $23.5 billion, up almost 52 percent from the $15.5 billion reported in the same quarter of 1999.

Much of this growth is attributed to an aggressive campaign to sign up merchants. Discover aims to have about 4 million merchant locations by the end of this year, up from a current level of about 3.5 million locations. As an example of its marketing strategy, Discover signed 40,000 restaurants last summer by offering one month of processing without charge. At the end of the first quarter of this year, Discover had 39.2 million accounts outstanding, including those in the U.K. From the same quarter of last year to the first quarter of this year, the number of active accounts rose from 20.8 million to 22.8 million. 

Discover also posted a 1.6 percent response rate to 243.8 million direct mail solicitations. Other response rates were Providian Financial Corp., 1.1 percent; MBNA, 0.9 percent, Capital One Corp., 1.1 percent and Chase Manhattan Bank, 0.5 percent.