The Broken Promise of Anytime, Anywhere Card Payments: The Experience of the U.S. Cardholder Abroad
Report Summary
The Broken Promise of Anytime, Anywhere Card Payments: The Experience of the U.S. Cardholder Abroad
Aite Group estimates that nearly 10 million U.S. cardholders experienced issues using their credit cards abroad in 2008 alone, a majority of which changed their card usage behavior as a result.
Boston, MA, October 26, 2009 – A new report from Aite Group, LLC assesses the true costs assumed by the card industry when U.S. cardholders experience difficulties making card payments abroad. The report is based on a September 2009 Aite Group online survey of 1,019 U.S. resident cardholders that traveled to countries outside of Canada, the Caribbean and Mexico between 2006 and 2009. It provides insight into the frequency of failed card payments abroad, the emotional response and lingering effect caused by failed card payments, and how the U.S. card industry can address this problem.
The promise of ubiquitous card payments acceptance falls apart once U.S. cardholders cross their national border. For cardholders traveling to one of the most popular destination for U.S. travelers - Western Europe - over the past three years, there is an almost 50% chance that they have experienced some form of problem using a U.S. payment card. Aite Group estimates that 9.7 million U.S. cardholders experienced issues with card payments abroad in 2008, and that the U.S. card industry missed out on US$3.9 billion in transactions and US$447 million in revenues as a result of these lost card payments. Interestingly, the responsibility for the majority of negative issues experienced by U.S. cardholders abroad lies squarely on the shoulders of U.S. card issuers, which cause 64% of the deterrents.
"Nearly two-thirds of cardholders adjust payment behavior after a bad experience, directly resulting in lower usage of the problem card," says Nick Holland, senior analyst with Aite Group and co-author of this report. "An issue caused by incompatible card technology is treated far more seriously by cardholders than issues stemming from card acceptance, fees or merchant policies. A quarter of cardholders experiencing these types of problems will agree either somewhat or totally that the problem ruined or almost ruined their trip."
This 54-page Impact Report contains 39 figures. Clients of Aite Group's Retail Banking service can download the report.