Latest WCI Research
Selected findings from recently updated markets. |
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France
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The French market for credit cards is competitive, innovative and well segmented. However, credit card and revolving credit is still not as popular in France as in the UK, and cardholders often chose to pay in monthly instalments on their credit cards.
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While revolving credit is the second-most popular type of non-mortgage consumer credit, it has been on the decrease since 2008 and has lost some of its share to personal loans. This is a result of the downturn in the economy, decreasing consumer confidence, comparatively high costs of borrowing, and the new regulation regarding revolving credit.
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The French card acquiring market is concentrated with the top four acquirers representing 70 percent market share in terms of POS billed volume.
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Czech Republic
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Czech consumers have historically been very conservative about accumulating debt, and until recently, credit cards were designed for more affluent customers. The rise of non-bank credit card issuers changed the situation dramatically and credit cards are now aimed at a broader consumer base. However, the Czech National Bank has voiced concerns about the ability of customers to meet their repayment commitments as a result of indiscriminate lending.
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The Czech Republic has a population of 10.5 million, which has remained relatively static over the last decade. In recent years, the Czech population has increased largely as a result of an influx of immigrants, the majority of whom are from other CEE countries.
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Visa dominates the debit cards market, with a market share of 69 percent over MasterCard and Maestro branded cards. Cashback facilities have been introduced by most banks and are expected to boost POS debit card payments and help establish a culture of using cards for everyday payments. |
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Saudi Arabia
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A cursory glance at the credit card market in Saudi Arabia may lead one to conclude that, despite consistent growth between 2004 and 2011, credit card penetration in the Saudi Arabian market remains low and underdeveloped. However, closer examination shows that Saudi Arabia has a very young population with relatively little room for growth at present. Nevertheless, there is significant potential for growth in the medium term as more Saudi citizens come of age and enter the work force.
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Decline in credit card outstandings and rollover rate, and a marginal growth in the net credit loss rate, has resulted in a fall in credit card profits and per card profitability during 2010 and 2011. Credit card profits are expected to start growing again during 2012 as the loss rate improves and billed volume per credit card continues to grow.
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Saudi Arabia’s economy grew by 7.5 percent during 2011 on the back of major initiatives introduced by the government. In the aftermath of regional political turmoil, the government announced over $130 billion in government spending. These included providing unemployment benefits to Saudis, new housing schemes for low income families, cash grants for employed Saudi citizens and significant increases in spending on the social sector and infrastructure upgrade projects.
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Taiwan
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Debit cards were only introduced in Taiwan in 2000 and are used mainly for cash withdrawal. They still have a long way to go to be a popular payment method due to Taiwan’s tradition of using credit cards, which began back in the mid-1980s.
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Taiwan has a very high cards penetration, with almost 5.5 cards per adult. However, card penetration rates have been declining since 2006 when a severe unsecured lending crisis broke. Large scale defaulting forced issuers to cut the number of credit-based cards.
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Visa was the first international card brand to enter the Taiwanese market in 1989. It is the market leader in terms of the number of credit cards and billed volume, followed by MasterCard with a distant but narrowing gap. Other cards, including American Express, Diners Card and JCB, which form around 5 percent of cards in issue and 9 percent of billed volume.
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Canada
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Canada is among the leading markets globally in terms of credit cards usage, credit cards penetration and the availability of banking infrastructure. In an extremely competitive environment cardholders have sought for relationships with organisations that offer good value, exceptional service and programmes that reward them for their loyalty.
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Canadian banks have not received government bailouts, there were no major financial industry bankruptcies, and the nation's biggest lenders have built significant reserves to offset losses from bad loans. Unlike their US peers, the Canadian lenders tend to keep loans on their balance sheets, a strong motivation to pursue sound debts.
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The merchant acquiring market in Canada is highly concentrated with over 75 percent of the market by billed volume dominated by three key players – Moneris Solutions, Global Payments and TD Merchant Services.
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Colombia
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Colombian economy has had sustained growth for the past decade and a positive outlook is expected for the next three years. Consumer debt has been on the rise and Lafferty Group estimates double-digit growth for 2012. However, inflationary pressures have been building since mid-2010 and the Banco de la Republica (Central Bank) has been increasing the country’s benchmark interest rate to counter this.
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Credit card holdings per adult are low and limited to the higher income segments of the market, suggesting a substantial growth potential for the cards business. The combination of an unattended lower-income market segment with a high mobile phone penetration opens the opportunity for new players to enter the market with creative and alternative payment programmes.
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Four international payment card networks operate in Colombia: Visa, MasterCard, Diners Club and American Express. As of June 2011, there were 16 financial institutions issuing Visa cards and 13 banks issuing MasterCard cards. Diners Club cards are issued by Davivienda and American Express by Bancolombia.
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