Payment Cards in Italy

Date: June 1, 2010
Pages: 107
Price:
US$ 2,795.00
Publisher: Datamonitor
Report type: Strategic Report
Delivery: E-mail Delivery (PDF)
ID: P92E74EA076EN
Leaflet:

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Payment Cards in Italy
Introduction

Payment Cards in Italy is an invaluable guide to one of Europe's most complex card markets. The report provides statistics on market size, competitor market shares and forecasts. It also provides an overview of regulation, competitor activities, issuer strategy and product innovation including developments in contactless, mobile payments, online and prepaid cards.

Scope
  • Data and analysis provided on debit cards, credit cards and deferred debit and charge cards.
  • Historic market data and competitor market shares are presented for 2004-2008, H1 2009, with forecasts presented to 2013.
  • New for 2010 includes data covering transactions by merchant category, premium card branding, benefits per card, card primacy and repayment behaviour.
  • Includes a detailed analysis of developments in the areas of contactless, mobile payments, online and prepaid cards.
Highlights

The Italian credit card market has positive potential for growth in the coming years ahead. Italians have historically be sceptical about revolving credit products. However growth in other forms of card based payments suggests consumers may finally be ready for a greater shift towards credit based card spending.

The Italian payment card market remains extremely fragmented, with a high number of small regional players. This is slowly shifting as the banking sector begins to consolidate, however the importance of regional branding and identity, suggests the market will remain largely splintered for the foreseeable future.

Italy has the world's most developed prepaid card sector, with prepaid cards being using over twice as often for online transactions than debit cards. Dominated by Poste Italiene, these cards act as a replacement for a full bank account in many instances. The sector is likely to see further growth as it targets more specific consumer segments.

Reasons to Purchase
  • Learn how the Italian general purpose payment card market has developed over the last five years.
  • Understand recent developments in Italian payments in terms of consolidation, new entrants and product innovations.
  • Plan your future strategy effectively with Datamonitor's five year forecasts across all product categories.

Overview
Catalyst
Summary
Executive Summary
Sizing and Forecasting the payment card market in Italy
Competitor and Product Developments
Online, Contactless, Prepaid and Mobile Payment
Table of Contents
Table of Figures
Table of Tables
Sizing and Forecasting the Payment Card Market in Italy
Overview
Key macroeconomic and consumer data
Macro-economic trends and performance
GDP
Unemployment
Real GDP growth
Inflation
Demographic and consumer trends
Regulatory environment
Key regulatory issues
Fraud and EMV
Italy is lagging behind in the conversion to EMV
SEPA
Interchange
Sizing the payment card market in Italy
Size and performance of the payment card market
Penetration of payment cards
Number of payment cards in issue by type
Number of payment card transactions
Value of payment card transactions
Trends in payment card use compared to other countries
Credit card balances outstanding, revolve rates, usage and repayment behavior
ATM and POS terminal numbers
Acquiring and processing landscape
Acquiring and processing structure in the market
Processing
Banca Popolare is the dominant acquirer in Italy
Competitor and Product Developments in Italy
Overview
Card issuer market shares and performance
Credit card market shares
Number of credit cards in issue by brand
Number of transactions by brand
Value of transactions by brand
Balances outstanding and card repayment rates by brand
Pay now card market shares
Charge and deferred-debit card market shares
Market dynamics remain complex in Italy
Banca Intesa acquires Sanpaolo IMI, forming Intesa Sanpaolo
ICBPI acquires CartaSi
Monte dei paschi di Siena acquires Banca Toscano and Banca Populare Antoniana Veneta
Barclays Bank acquires Italian credit card business of Citibank International
Findale Enterprises acquires Diners Club Italia
Banche Popolari Unite and Banca Lombarda e Piemontese complete merger
UniCredit acquires HVB in one of Europe's largest ever cross-border deals
Foreign players are also active in the Italian market
MBNA
Barclaycard
Some players have also left the market
Capital One leaves Italy due to changes in strategy
Product design and issuer strategy in Italy
Credit card product strategy
Card product features by brand
Usage trends by brand
Leading revolving credit products and price points
Card scheme market shares and developments
Major card scheme developments
Card schemes focus on organic growth
Pay now card scheme shares
Number of cards in issue
Value of transactions
Revolving credit card scheme shares
Number of cards in issue
Value of transactions
Charge and deferred-debit card scheme shares
Number of cards in issue
Value of transactions
Forecasting the payment card market in France
Forecasting the pay now card market
Forecasting the revolving credit card market
Forecasting the charge and deferred-debit card market
Online, Contactless, Prepaid and Mobile Payments
Overview
Online payments were an estimated €54.7 billion market in 2009
Italy is the seventh largest market in terms of potential value and is worth €54.7 billion
Flight and hotel purchases account for the largest share of transaction values online
Taken as an average per adult, online spending in Italy is at the larger end of the scale
Credit and debit cards account for the majority of online transactions in Italy, in line with global trends
Italian consumers are the sixth lowest users of credit cards online
Debit card usage is also below the global average in Italy
Fraud is the single biggest challenge facing the industry
Contactless payments are a $45.5 billion opportunity in Italy alone
Italy is the fourth largest market in terms of potential opportunity in Western Europe
Contactless cards are now widely distributed in Italy
The petrol market offers the biggest opportunity for contactless payments, but has witnessed few developments
Pubs and bars provide the second largest opportunity for contactless payments in Italy
Convenience stores are the third major opportunity, but have not received as much attention
Public transport provides fewer opportunities in terms of volume, but there are clear benefits from the consumer perspective that could be leveraged
Developments in prepaid cards
Prepaid cards are growing by a CAGR of 36.8%
Prepaid usage rates have room for growth
Poste Italiane dominates the Italian prepaid market
Developments in mobile payments
Investment in mobile technology is accelerating worldwide
There are more opportunities outside of Europe and the US
NFC has the greatest potential within the mobile payments arena
NFC also offers clear benefits over contactless cards
Mobile payments remain at an early phase of development
Telecom Italia is leading the largest commercial deployments of mobile payments in Italy
Appendix
Regulatory bodies
Banca d'Italia
Banking associations
Associazione Bancaria Italiana
Associazone Casse di Risparmio Italiane
Banche Credito Cooperativo
Other noteworthy associations
Associazione Italiana del Credito al Consumo e Immobiliare
Credit bureaus
EURISC: CRIF credit protection bureau
Experian Italia
Supplementary data
Definitions
AAGR
Affinity card
CAGR
Co-branded card
Credit card
Deferred-debit and charge card
EMV
EPC
ePurse
Merchant service charge
Pay now cards
POS terminal
Private-label cards
Methodology
Cards and payments database
Financial Services Consumer Insight is new to our offering, providing new and valuable insight
Further reading
Ask the analyst
Datamonitor consulting
Disclaimer

LIST OF TABLES

Table 1: Italy - macro-economic indicators
Table 2: Italy - demographics and consumer trends
Table 3: A selection of key credit card fees, APR's and product features
Table 4: Datamonitor's forecast for the pay now card market, 2008-13f
Table 5: Datamonitor's forecast for the credit card market, 2008-13f
Table 6: Datamonitor's forecast for the deferred-debit and charge card market, 2008-13f
Table 7: Visa's revised contactless interchange rates
Table 8: Prepaid card market shares, 2005-07
Table 9: GDP for 2008 by country
Table 10: Unemployment and unemployment rates in Western Europe
Table 11: Italy: GDP growth 2005-09
Table 12: Card penetration in Western Europe
Table 13: Italy: inflation (% change)
Table 14: Transaction split by merchant category in Italy
Table 15: Average transaction value and frequency of use for pay now cards in Western Europe
Table 16: Average transaction value and frequency of use for pay later cards in Western Europe
Table 17: Number of ATMs: Western Europe
Table 18: Population per ATM in Western European countries
Table 19: Number of POS terminals: Western Europe
Table 20: Population per POS terminal in Western European countries
Table 21: Balances outstanding and revolve rates, 2008
Table 22: Current relevant publications
Table 23: Future relevant publications

LIST OF FIGURES

Figure 1: Italy had the fourth highest GDP in Western Europe in 2009
Figure 2: The unemployment rate stood at 7.7% in Italy in 2009
Figure 3: Italy's economy shrank by 4.7% in 2009
Figure 4: Inflation change reached its peak in 2008 at 3.4%
Figure 5: Regulatory overview of Italy
Figure 6: Italy had the fourth lowest card penetration among Western European countries, 2008
Figure 7: Penetration of pay later cards and pay now cards is nearly evenly split in Italy
Figure 8: Italy had the second lowest penetration of pay now cards in 2008
Figure 9: Pay later cards grew at a CAGR of 50.7% over 2004-08
Figure 10: Deferred-debit and charge card grew the fastest in Italy over 2004-08 but are believed to have declined in 2009
Figure 11: Pay now cards accounted for the largest share of cards transactions, 2004-09e*
Figure 12: Payments cards were used more to make transactions at the POS than at ATMs in Italy, 2004-09e*
Figure 13: Spending split by merchant category was more or less on par in pay now and pay later markets, 2008
Figure 14: Credit cards were used the least, but their usage grew the most in Italy during 2004-08
Figure 15: Transactions made at POS are expected to have declined the most in 2009
Figure 16: Pay now cards accounted for the majority of transactions by value, 2004-09e*
Figure 17: The value of ATM transaction is expected to have increased in 2009 compared to POS transactions
Figure 18: Flight and hotels account for the greatest transaction value in Italy
Figure 19: Average transaction values were highest for pay now cards, 2004-09e*
Figure 20: Average transaction value at ATMs was higher than at the POS in Italy, 2004-09e
Figure 21: Unlike in other major Western European countries, pay now cards in Italy had a low frequency of use but a high transaction value, 2008
Figure 22: ATM transactions accounted for the greatest turnover per pay now card in Italy, 2008
Figure 23: Pay later cards were more commonly used to make high-value transactions in Italy, 2008
Figure 24: Turnover per pay later card was highest at the POS in Italy, 2008
Figure 25: Pay now spending by merchant category was more or less even across Western Europe, 2008
Figure 26: Pay later spending by merchant category varied considerably across Western Europe, 2008
Figure 27: Italy has the lowest rate of cards with no balances at only 4.9%
Figure 28: Italian consumers use 77.4% of their credit cards occasionally/rarely
Figure 29: Italy ranks third among other Western European countries in terms of balances outstanding and revolve rates
Figure 30: A small number of cards are paid off in full in Italy compared to other countries
Figure 31: Italy witnessed a CAGR of 8.5% during 2004-08 in the number of ATM terminals
Figure 32: The sustained increase in POS terminals in Italy reflects growth in the POS acceptance network
Figure 33: SIA-SSB offers a wide range of processing activities
Figure 34: Agos is the leading credit card issuer in Italy
Figure 35: Santander was the most popular card in Italy in terms of annual frequency of use in 2008
Figure 36: Agos and Clarima were the top players in terms of value of transactions and average transaction value, respectively, 2008
Figure 37: Revolve rates varied significantly for issuers in Italy, H1 2009
Figure 38: The way that consumers pay off their credit cards varies depending on the issuer
Figure 39: Intesa Sanpaolo is the largest pay now card issuer in Italy
Figure 40: Intesa Sanpaolo also dominates the deferred-debit and charge card market in Italy
Figure 41: 13% of cards in Italy have reward/loyalty points
Figure 42: Most issuers are seen as offering an even range of card features
Figure 43: Premium cards account for 21.6% of Italian cards in issue
Figure 44: The majority of cards by issuer are either standard- or 'other'-branded
Figure 45: Card primacy levels vary strongly by brand, with Capitalia holding the highest rate
Figure 46: Maestro had the greatest number of pay now cards in issue, 2004-08
Figure 47: Visa recorded the highest CAGR in the value of pay now card transactions, 2004-08
Figure 48: MasterCard held the greatest market share in credit cards issued in Italy, 2004-08
Figure 49: MasterCard became the lead player in terms of value of transaction in 2008
Figure 50: Visa was the dominant player in charge and deferred-debit card schemes in Italy, 2004-08
Figure 51: Visa led in terms of value of transaction as well as in the charge and deferred-debit card market, 2004-08
Figure 52: Growth in the value of transactions forecast to drive the pay now market forward, 2008-13f
Figure 53: The volume and value of transaction on pay later cards will increase, 2008-13f
Figure 54: The increased issuance of deferred-debit and charge cards will be the driver of growth, 2008-13f
Figure 55: Online payments were worth an estimated €54.7 billion market in 2009 in Italy
Figure 56: Italian consumers were among the largest spenders online, 2009
Figure 57: Prepaid cards are used more than twice as often online than debit cards in Italy
Figure 58: Only around one third of online transactions are paid by credit card in Italy
Figure 59: Debit card usage online in Italy is among the lowest in the world
Figure 60: Contactless payments are an $45.5 billion opportunity in France
Figure 61: The petrol market offers the biggest opportunity for contactless payments
Figure 62: There were 8.5 million prepaid card in circulation by the end of 2008
Figure 63: Prepaid cards are usually used one to three times per month.
Figure 64: Postepay prepaid cards in issue and value of float
Figure 65: Poste Italiane accounted for 59% of prepaid cards in issue in 2007
Figure 66: Postepay was the most commonly held brand by consumers in 2009
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