MUNICH, Germany—The microchip shortage plaguing so many industries could also disrupt the U.S. and global payments systems, the Smart Payment Association is warning.
The warning comes at the same time vehicle sales have taken a tumble as a result of the same chip shortage.
The association issued a statement noting more than three-billion EMV-based payment cards are created globally each year for those who open a new bank account, renew their cards when they expire, and ask for replacement plastic.
However, due to the chip shortage, card makers are experiencing increased difficulty in getting chips for their products.
Nearly 90% of non-cash consumer purchases are made using cards at physical businesses, the association stated, adding payment cards are also responsible for 40% to 60% of online payments, the association said.
Auto Sales Skid
Meanwhile, the chip shortage can be seen in the latest auto sales numbers.
“Vehicle sales took a big tumble in June – after months of concerns about supply and semiconductor shortages, the squeeze has finally come to pass,” said NAFCU Chief Economist and Vice President of Research Curt Long. “With an economy in recovery, the macroeconomic factors exist for very strong sales, unfortunately supply is not cooperating. The May inventory number of 2.2 million vehicles is more than 60% below the lowest inventory level before 2020, driving up prices and leaving consumers with fewer choices. Used vehicle prices are also skyrocketing, up 40% on the wholesale market in the past year. Though supply shortages may be at their bottom, it will take a while to ramp production back up. NAFCU expects tepid vehicle sales through the fall, almost fully dependent on the ability of manufacturers to build more cars.”