Emerging Opportunities in the UK Cards and Payments Industry: Market Size, Trends and Drivers, Strategies, Products and Competitive Landscape

Date: December 14, 2012
Pages: 116
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Publisher: Timetric
Report type: Strategic Report
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ID: E6BEB4E7D04EN
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Emerging Opportunities in the UK Cards and Payments Industry: Market Size, Trends and Drivers, Strategies, Products and Competitive Landscape
Synopsis

The report provides market analysis, information and insights into the UK’s cards and payments industry, including:
  • Current and forecast values for each segment of the UK’s cards and payments industry including debit cards, credit cards, prepaid cards and charge cards
  • Comprehensive analysis of the industry’s market attractiveness and future growth areas
  • Analysis of various market drivers and regulations governing the UK's cards and payments industry
  • Detailed analysis of the marketing strategies adopted for selling prepaid cards used by various bankers and other institutions in the market
  • Comprehensive analysis of consumer attitudes and their buying preferences for cards
  • Competitive landscape of the UK's cards and payments industry
Summary

The UK cards and payments industry grew at a CAGR of 4.11% during the review period. The largest share of the industry was occupied by the debit card category with a 45.2% share in 2012, followed by the prepaid card category which claimed 26.1% of the overall industry in 2012. This trend is expected to continue during the forecast period. In 2017 the prepaid card category is projected to occupy 37.7% of the overall industry. The credit card category share is expected to decline from 27.6% in 2012 to 21.8% in 2017 at a CAGR of -0.53%. The emergence of contactless payments is expected to increase the scope of card based payments in the UK. Contactless cards were first issued in the UK in 2007 and, as of 2012, there were nearly 23 million cards in circulation. Top banks that have rolled out contactless payments include Barclays, Lloyds, Bank of America (MBNA), HSBC and RBS. The emergence of contactless payments has encouraged customers to opt for card based payments, as such transactions are secure and can be processed much faster compared to traditional card based transactions. Contactless payments are also expanding to post offices and other retail segments. The recent ruling increasing the price limit of contactless transactions from GBP15 (US$24.05) to GBP20 (US$32.07) is also expected to shift low value cash based transactions to cards.

Scope
  • This report provides a comprehensive analysis of the UK’s cards and payments industry
  • It provides current values for the UK’s cards and payments industry for 2012 and forecast figures for 2017
  • It details the different macroeconomic, infrastructural, consumer and business drivers affecting the UK’s cards and payments industry
  • It outlines the current regulatory framework in the industry
  • It details the marketing strategies used by various bankers and other institutions
  • It profiles the major banks in the UK’s cards and payments industry
Reasons To Buy
  • Make strategic business decisions using historic and forecast market data related to the UK’s cards and payments industry and each market within it
  • Understand the key market trends and growth opportunities within the UK’s cards and payments industry
  • Assess the competitive dynamics in the UK’s cards and payments industry
  • Gain insights into the marketing strategies used for selling various types of cards in the UK
  • Gain insights into key regulations governing the UK’s cards and payment industry
Key Highlights
  • The UK cards and payments industry grew at a CAGR of 4.11% during the review period. The largest share of the industry was occupied by the debit card category with a 45.2% share in 2012, followed by the prepaid card category which claimed 26.1%.
  • In 2017 the prepaid card category is projected to occupy 37.7% of the overall industry.
  • Proposed regulatory reform to eliminate payment card surcharges to encourage card use.
  • Decreasing appetite for credit fuelled spending to reduce credit card category share.
  • Competitive pricing and attractive introductory interest rate by banks to expand customer base.
1 EXECUTIVE SUMMARY

2 MARKET ATTRACTIVENESS AND FUTURE PROSPECTS OF CARDS AND PAYMENTS INDUSTRY

3 ANALYSIS OF UK CARDS AND PAYMENTS INDUSTRY DRIVERS

3.1 Macroeconomic Drivers
  3.1.1 Inflation rate
  3.1.2 Total investments
  3.1.3 Central bank interest rate
  3.1.4 Annual disposable income
3.2 Infrastructure Drivers
  3.2.1 Emergence of contactless payments
  3.2.2 Emergence of Google wallet/ Google check out
  3.2.3 Increasing penetration of smartphones
  3.2.4 Increasing penetration of mobile internet
  3.2.5 Growing Number of POS terminals
3.3 Business Drivers
  3.3.1 Growth of gift cards
  3.3.2 Emergence of prepaid cards
  3.3.3 Rise of m-commerce transactions
  3.3.4 Decrease in credit card delinquencies
3.4 Consumer Drivers
  3.4.1 Household final consumption expenditure
  3.4.2 Outbound tourism
  3.4.3 Rising per-capita income
  3.4.4 Economically active population
3.5 Card Fraud Statistics
  3.5.1 Card fraud by channel
  3.5.2 Card fraud – country comparison
3.6 Regulatory Framework
  3.6.1 Status of implementation of Payment Services Directive in UK
  3.6.2 Single European Payment Area (SEPA) implementation in UK
  3.6.3 Best Practice guidelines set by UK Payment Cards Association
  3.6.4 Other regulations applicable to the credit card industry
  3.6.5 E-money regulation in the UK
  3.6.6 Prospective changes in card market regulatory landscape

4 EMERGING CONSUMER ATTITUDES AND TRENDS

4.1 Market Segmentation and Targeting
4.2 Consumer Preference
4.3 Preferred Payment Methods

5 COMPETITIVE LANDSCAPE AND INDUSTRY DYNAMICS

5.1 Market Share Analysis by Payment Channels
  5.1.1 Overview of payment channels
5.2 Debit Cards Category Share
  5.2.1 By bank
  5.2.2 By scheme
5.3 Credit Cards Category Share
  5.3.1 By bank
  5.3.2 By scheme
5.4 Charge Cards Category Share

6 STRATEGIES ADOPTED BY KEY PLAYERS

6.1 Marketing Entry Strategies
6.2 Marketing and Product Strategies
  6.2.1 Debit cards
  6.2.2 Credit cards
  6.2.3 Prepaid cards
  6.2.4 Charge cards
6.3 Pricing Strategies
  6.3.1 Debit card pricing
  6.3.2 Credit card pricing

7 SIZE AND GROWTH POTENTIAL OF PAYMENT CARD INDUSTRY

7.1 Industry Share Analysis by Type of Card
7.2 Total Market Size and Forecast of Card Industry
  7.2.1 Analysis by number of cards
  7.2.2 Analysis by transaction value
  7.2.3 Analysis by transaction volume
7.3 Debit Card Category Size and Forecast
  7.3.1 Analysis by number of cards
  7.3.2 Analysis by transaction value
  7.3.3 Analysis by transaction volume
  7.3.4 Other key performance indicators
7.4 Prepaid Card Category Size and Forecast
  7.4.1 Analysis by number of cards
  7.4.2 Analysis by segments closed-loop and open-loop cards
7.5 Charge Card Category Size and Forecast
  7.5.1 Analysis by number of cards
  7.5.2 Analysis by transaction value
  7.5.3 Analysis by transaction volume
7.6 Credit Card Category Size and Forecast
  7.6.1 Analysis by number of cards
  7.6.2 Analysis by transaction value
  7.6.3 Analysis by transaction volume
  7.6.4 Other key performance indicators

8 COMPANY PROFILES, PRODUCT, AND MARKETING STRATEGIES

8.1 Santander UK plc
  8.1.1 Strategies
  8.1.2 Debit cards Offered
  8.1.3 Credit cards Offered
8.2 Lloyds Banking Group
  8.2.1 Strategies
  8.2.2 Lloyds TSB Cards
  8.2.3 Halifax Cards
  8.2.4 Bank of Scotland Cards
8.3 Barclays Bank
  8.3.1 Strategies
  8.3.2 Debit Cards Offered
  8.3.3 Credit Cards Offered
8.4 HSBC, UK
  8.4.1 Strategies
  8.4.2 Debit Cards Offered
  8.4.3 Credit Cards Offered
8.5 Royal Bank of Scotland Group (RBS Group)
  8.5.1 Strategies
  8.5.2 Debit Cards Offered
  8.5.3 Credit Cards Offered

9 APPENDIX

9.1 Methodology
9.2 Definitions
9.3 Contact Us
9.4 About Timetric
9.5 Our approach
9.6 Services
9.7 Disclaimer



LIST OF TABLES

Table 1: Comparison of Liability Standards of UK and that set By PSD
Table 2: Master Card Interchange Fee, 2012
Table 3: Visa Interchange Fee, 2012
Table 4: UK Payment Channels (GBP Million), 2008–2012
Table 5: Market Entry Strategies of Various Foreign Corporate and Retail Bank
Table 6: Debit Card Fee of Selected Banks
Table 7: Credit Card Fee of Selected Banks
Table 8: UK Cards Industry Size by Type of Card (Number in Thousands), 2008–2017
Table 9: UK Cards Industry Size by Volume (Thousands), 2008–2017
Table 10: UK Cards Industry Size by Transaction Value (GBP Million), 2008–2017
Table 11: UK Cards Industry Size by Transaction Value (US$ Million), 2008–2017
Table 12: UK Cards Industry Size by Transaction Volume (Million), 2008–2017
Table 13: UK Debit Card Category Size (Thousands), 2008–2017
Table 14: UK Debit Card Category Size (GBP Million), 2008–2017
Table 15: UK Debit Card Category Size (US$ Million), 2008–2017
Table 16: UK Debit Card Category Size by Transaction Volume (Million), 2008–2017
Table 17: UK Debit Card Category Size by Frequency of Use (Transaction/Card/Year), 2008–2017
Table 18: UK Prepaid Card Category Size (Thousands), 2008–2017
Table 19: UK Open-Loop Prepaid Cards Segment Size (Thousands), 2008–2017
Table 20: UK Closed-Loop Prepaid Cards Segment Size (Thousands), 2008–2017
Table 21: UK Prepaid Cards Category Size (GBP Million), 2008–2017
Table 22: UK Prepaid Cards Category Size (US$ Million), 2008–2017
Table 23: UK Charge Card Category Size (Thousands), 2008–2017
Table 24: UK Charge Card Category Size (GBP Million), 2008–2017
Table 25: UK Charge Card Category Size (US$ Million), 2008–2017
Table 26: UK Charge Card Category Size by Transaction Volume (Million), 2008–2017
Table 27: UK Charge Card Category Size by Frequency of Use (Transaction/Card/Year)
Table 28: UK Credit Card Category Size by Volume (Thousands), 2008–2017
Table 29: UK Credit Card Category Size by Transaction Value (GBP Million), 2008–2017
Table 30: UK Credit Card Category Size by Transaction Value (US$ Million), 2008–2017
Table 31: UK Credit Card Category Size by Transaction Volume (Million), 2008–2017
Table 32: UK Credit Card Category Size by Frequency of Use, 2008–2017
Table 33: UK Credit Card Category Size by Average Transaction Value (GBP), 2008–2017
Table 34: UK Credit Card Category Size by Average Transaction Value (US$), 2008–2017
Table 35: Cards and Payments Key Definitions

LIST OF FIGURES

Figure 1: Current and Future Prospects of Various Cards in the UK
Figure 2: Growth Potential of the UK Cards and Payments Industry by Area of Usage
Figure 3: UK Cards and Payments Industry Drivers
Figure 4: Inflation, Average Consumer Prices (% Change), 2008 - 2017
Figure 5: Total Investment (% of GDP), 2008 - 2017
Figure 6: Central Bank Interest Rate (%), 2008-2012
Figure 7: Annual Disposable Income (GBP Million), 2008-2017
Figure 8: Smartphone Penetration in the UK, 2008-2012
Figure 9: Mobile Internet Penetration, 2008 - 2012
Figure 10: Number of POSs in the UK (Thousands), 2008 – 2017
Figure 11: Gift Card And Voucher Sales in The UK, 2008 – 2012
Figure 12: M-Commerce Transactions in the UK, 2008 – 2012
Figure 13: Write-offs of Credit card loans by banks and building societies (GBP Million), 2010-2012
Figure 14: Household Final Consumption Expenditure (GBP), Q1 2008 – Q2 2012
Figure 15: UK Residents Spending Abroad (GBP Million), 2008 - 2012
Figure 16: Per-Capita Income (GBP), 2008 - 2017
Figure 17: Economically Active Population (Million), 2008 - 2017
Figure 18: Share of Various Card Fraud Types in Overall Card Fraud (%), 2011
Figure 19: UK Card Fraud Statistics by Channel (GBP Million), 2008 – 2012
Figure 20: Card Fraud in Selected EU Countries (US$ Million), 2008–2011
Figure 21: UK Cards and Payments Industry Segmentation by Card Type
Figure 22: Credit Cards Targeting Football Fans
Figure 23: Credit Cards for People with Bad Credit History
Figure 24: Sharia-Compliant Prepaid Card
Figure 25: Card Expenditure Incurred by UK Population on Various Retail Segments, (GBP Million), (2008 And 2011)
Figure 26: Online Retail Sales in UK, 2008-2017, (GBP Million)
Figure 27: Fastest Growing E-Commerce Sectors (%), 2011
Figure 28: Household Internet Access (%), 2008- 2012
Figure 29: Mobile Internet Usage Among Different Age Groups (%), 2009 - 2011
Figure 30: Share of Different Online Payment Options in the UK (%), 2012
Figure 31: Share of Different Payment Channel in UK (%), 2012
Figure 32: UK Value and Growth of Cash Transactions (GBP Million), 2008–2012
Figure 33: UK Value and Growth of Credit Transfer (GBP Million), 2008–2012
Figure 34: UK Value and Growth of Direct Debit (GBP Million), 2008–2012
Figure 35: UK Value and Growth of Cards Payment (GBP Million), 2008–2012
Figure 36: UK Value and Growth of Check Payment (GBP Million), 2008–2012
Figure 37: UK Debit Card Category Share by Banks (%), 2011
Figure 38: UK Debit Card Category Share by Schemes (%), 2011
Figure 39: UK Credit Card Category Share by Bank (%), 2011
Figure 40: UK Credit Card Category Share by Schemes (%), 2011
Figure 41: UK Charge Card Category Share by Schemes (%), 2011
Figure 42: Card Marketing Strategies by UK Banks
Figure 43: Effective Interest Rates on Credit Cards (%), Jan, 2011-Sept,2012
Figure 44: UK Cards Industry by Type of Card (%), 2008–2017
Figure 45: UK Cards Industry Size by Volume (Thousands), 2008–2017
Figure 46: UK Cards Industry Size by Transaction Value (GBP Million), 2008–2017
Figure 47: UK Cards Industry Size by Transaction Volume (Million), 2008–2017
Figure 48: UK Debit Card Category Size (Thousands), 2008–2017
Figure 49: UK Debit Card Category Size (GBP Million), 2008–2017
Figure 50: UK Debit Card Category Size by Transaction Volume (Million), 2008–2017
Figure 51: UK Debit Card Category Size by Frequency of Use (Transaction/Card/Year), 2008–2017
Figure 52: Debit Card Usage ATM and POS Terminals (Thousands), 2008–2017
Figure 53: UK Prepaid Card Category Size (Thousands), 2008–2017
Figure 54: UK Open-Loop Prepaid Cards Segment Size (Thousands), 2008–2017
Figure 55: UK Closed-Loop Prepaid Cards Segment Size (Thousands), 2008–2017
Figure 56: UK Prepaid Cards Category Size (GBP Million), 2008–2017
Figure 57: UK Charge Card Category Size (Thousands), 2008–2017
Figure 58: UK Charge Card Category Size (GBP Million), 2008–2017
Figure 59: UK Charge Card Category Size by Transaction Volume (Million), 2008–2017
Figure 60: UK Charge Card Category Size by Frequency of Use (Transaction/Card/Year)
Figure 61: UK Credit Card Category Size by Volume (Thousands), 2008–2017
Figure 62: UK Credit Card Category Size by Transaction Value (GBP Million), 2008–2017
Figure 63: UK Credit Card Category Size by Transaction Volume (Million), 2008–2017
Figure 64: UK Credit Card Category Size by Frequency of Use, 2008–2017
Figure 65: UK Credit Card Category Size by Average Transaction Value (GBP), 2008–2017
Figure 66: Santander UK, PLC Market Segmentation of Cards Offered
Figure 67: Lloyds Banking Group Market Segmentation of Cards Offered
Figure 68: Barclays Market Segmentation of Cards Offered
Figure 69: HSBC Market Segmentation of Cards Offered
Figure 70: RBS Market Segmentation of Cards Offered

COMPANIES MENTIONED

Santander UK plc
Lloyds Banking Group
Barclays Bank
HSBC
Royal Bank of Scotland Group
Boots
Marks & Spencer
HBOS
Amazon

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