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South Africas Cards and Payments Industry: Emerging Opportunities, Trends, Size, Drivers, Strategies, Products and Competitive Landscape

Published By :

Timetric

Published Date : Feb 2014

Category :

Banking

No. of Pages : 104 Pages

Synopsis

The report provides top-level market analysis, information and insights into South Africa\'s cards and payments industry, including:

  • Current and forecast values for each category of South Africa\'s cards and payments industry, including debit cards, credit cards and prepaid cards
  • Comprehensive analysis of the industry’s market attractiveness and future growth areas
  • Analysis of various market drivers and regulations governing South Africa\'s cards and payments industry
  • Detailed analysis of the marketing strategies adopted for selling debit, credit and prepaid cards used by banks and other institutions in the market
  • Comprehensive analysis of consumer attitudes and buying preferences for cards
  • The competitive landscape of South Africa\'s cards and payments industry

Executive summary

The South African card payments channel registered growth during the review period (2009–2013). The number of cards in circulation recorded a review-period CAGR of 17.60%. The country’s positive economic outlook, the demand for more sophisticated prepaid and charge card products and the growth of online shopping supported the growth of the card payments channel. Over the forecast period (2014−2018), the channel is expected to increase at a CAGR of 7.60%, as consumers move away from cash payments. During the review period, the South African card payments channel grew in both volume and value terms. In terms of the volume of cards in circulation, debit cards accounted for the largest channel share of 58.0% in 2013, followed by prepaid cards with 26.0%. The main contributor to the growth of prepaid cards was a rise in demand for open-loop prepaid cards among the unbanked population. Technological developments were a key factor in the growth of the card payments channel in South Africa during the review period. Mini automatic teller machines (ATMs) were introduced by First National Bank, while mobile ATMs and wireless point of sale (POS) terminals were introduced by other national and foreign banks. With the increasing adoption of smartphones, handset manufacturers are promoting near-field communication (NFC) technology. However, retailers and banks in South Africa require clearly defined security benefits and cost-reductions before they will adopt NFC on a large scale.

Scope

  • This report provides a comprehensive analysis of South Africa\'s cards and payments industry.
  • It provides current values for South Africa\'s cards and payments industry for 2013, and forecast figures for the period up to 2018.
  • It details the different economic, infrastructural and business drivers affecting South Africa\'s cards and payments industry.
  • It outlines the current regulatory framework in the industry.
  • It details the marketing strategies used by various banks and other institutions.
  • It profiles the major banks in South Africa\'s cards and payments industry.

Reasons to buy

  • Make strategic business decisions using top-level historic and forecast market data related to South Africa\'s cards and payments industry and each market within it.
  • Understand the key market trends and growth opportunities within South Africa\'s cards and payments industry.
  • Assess the competitive dynamics in South Africa\'s cards and payments industry.
  • Gain insights in to the marketing strategies used for selling various card types in South Africa.
  • Gain insights into key regulations governing South Africa\'s cards and payments industry.

Key highlights

  • The South African card payments channel registered growth during the review period (2009–2013). The number of cards in circulation recorded a review-period CAGR of 17.60%. The country’s positive economic outlook, the demand for more sophisticated prepaid and charge card products and the growth of online shopping supported the growth of the card payments channel.
  • In value terms, the card payments channel grew from ZAR856.6 billion (US$101.5 billion) in 2009 to ZAR1.4 trillion (US$140.5 billion) in 2013, at a CAGR of 12.07%. The card payments channel is expected to reach ZAR1.9 trillion (US$162.6 billion) in 2018, representative of a forecast-period CAGR of 7.07%. Growth is expected to be driven by demand for prepaid cards, regulatory improvements, and electronic and mobile commerce (e-commerce and m-commerce).
  • Technological developments were a key factor in the growth of the card payments channel in South Africa during the review period. Mini automatic teller machines (ATMs) were introduced by First National Bank, while mobile ATMs and wireless point of sale (POS) terminals were introduced by other national and foreign banks.
  • Banks are segmenting their customer base in order to maximize the potential of expanding their shares in each category. Banks such as First National Bank and Standard Bank of South Africa launched credit cards specifically targeted at students. Banks established a range of corporate cards designed to meet the specific needs of business houses. Absa Bank offers the Procurement Management card for the management of end-to-end procurement activity. 
  • With the increasing adoption of smartphones, handset manufacturers are promoting near field communication (NFC) technology. However, retailers and banks in South Africa require clearly defined security benefits and cost-reductions before they will adopt NFC on a large scale.
Table of contents

1 Executive Summary

2 Analysis of Market Environment, Key Trends and Drivers
2.1 Payment Infrastructure and Emerging Technologies
2.1.1 Automatic teller machines (ATMs)
2.1.2 Point of sale (POS) terminals
2.1.3 NFC and contactless payments
2.1.4 Internet penetration
2.1.5 Introduction of mini-ATMs, mobile ATMs and wireless POS
2.1.6 Mobile payments
2.2 Business Drivers
2.2.1 Growth in retail industry
2.2.2 Increasing focus on social media to understand consumer behavior
2.3 Economic Drivers
2.3.1 Stable GDP
2.3.2 Inflation
2.3.3 GDP per capita

3 Cards and Payments Industry Share Analysis
3.1 Industry Overview
3.1.1 Cash
3.1.2 Checks
3.1.3 Card payments
3.1.4 Credit transfer
3.1.5 Direct debit

4 Regulatory Framework and Card Fraud Statistics
4.1 Regulatory Framework
4.1.1 National Credit Act
4.1.2 Anti-money laundering (AML) measures
4.1.3 Foreign direct investment (FDI) regulations
4.2 Card Fraud Statistics
4.2.1 Card-not-present fraud
4.2.2 Counterfeit cards
4.2.3 Card ID theft
4.2.4 Cards lost or stolen

5 Emerging Consumer Attitudes and Trends
5.1 Industry Segmentation and Targeting
5.1.1 Retail segment
5.1.2 Corporate segment
5.2 Travel and Tourism Spending
5.2.1 Outbound tourist trips
5.2.2 Outbound tourist spending
5.3 Retail Card Spending
5.3.1 Analysis by product categories
5.3.2 Analysis by retail channels

6 Analysis of Card Payments and Growth Prospects
6.1 Channel Share Analysis by Card Category
6.2 Size and Forecast of the Card Payments Channel
6.2.1 Analysis by number of cards in circulation
6.2.2 Analysis by transaction value

7 Analysis of Credit Card Payments and Growth Prospects
7.1 Overall Category Size and Forecast
7.1.1 Analysis by number of cards in circulation
7.1.2 Analysis by transaction value
7.1.3 Analysis by transaction volume
7.2 Transaction Share Analysis by Channel
7.2.1 Analysis by transaction value
7.2.2 Analysis by transaction volume
7.3 Personal Credit Cards Sub-Category Size and Forecast
7.3.1 Analysis by number of cards in circulation
7.3.2 Analysis by transaction value
7.3.3 Analysis by transaction volume
7.4 Commercial Credit Cards Sub-Category Size and Forecast
7.4.1 Analysis by number of cards in circulation
7.4.2 Analysis by transaction value
7.4.3 Analysis by transaction volume
7.5 Competitive Landscape
7.5.1 Scheme share analysis
7.5.2 Issuer share analysis

8 Analysis of Debit Card Payments and Growth Prospects
8.1 Overall Category Size and Forecast
8.1.1 Analysis by number of cards in circulation
8.1.2 Analysis by transaction value
8.1.3 Analysis by transaction volume
8.2 Transaction Share Analysis by Channel
8.2.1 Analysis by transaction value
8.2.2 Analysis by transaction volume
8.3 Competitive Landscape
8.3.1 Scheme share analysis
8.3.2 Issuer share analysis

9 Analysis of Charge Card Payments and Growth Prospects
9.1 Overall Category Size and Forecast
9.1.1 Analysis by number of cards in circulation
9.1.2 Analysis by transaction value
9.1.3 Analysis by transaction volume
9.2 Transaction Share Analysis by Channel
9.2.1 Analysis by transaction value
9.2.2 Analysis by transaction volume
9.3 Personal Charge Cards Category Size and Forecast
9.3.1 Analysis by number of cards in circulation
9.3.2 Analysis by transaction value
9.3.3 Analysis by transaction volume
9.4 Commercial Charge Cards Sub-Category Size and Forecast
9.4.1 Analysis by number of cards in circulation
9.4.2 Analysis by transaction value
9.4.3 Analysis by transaction volume
9.5 Competitive Landscape
9.5.1 Scheme share analysis
9.5.2 Issuer share analysis

10 Analysis of Prepaid Card Payments and Growth Prospects
10.1 Overall Category Size and Forecast
10.1.1 Analysis by number of cards in circulation
10.1.2 Analysis by transaction value
10.2 Open-Loop Prepaid Cards Segment Size and Forecast
10.2.1 Analysis by number of cards in circulation
10.2.2 Analysis by transaction value
10.3 Closed-Loop Prepaid Cards Segment Size and Forecast
10.3.1 Analysis by number of cards in circulation
10.3.2 Analysis by transaction value

11 Merchant Acquiring
11.1 Merchant Acquirers in South Africa

12 Company Profiles of Card Issuers
12.1 First National Bank
12.1.1 Key financials
12.1.2 Card portfolio
12.1.3 Strategies
12.2 Standard Bank of South Africa
12.2.1 Key financials
12.2.2 Card portfolio
12.2.3 Strategies
12.3 Nedbank
12.3.1 Key financials
12.3.2 Card portfolio
12.3.3 Strategies
12.4 Absa Bank
12.4.1 Key financials
12.4.2 Card portfolio
12.4.3 Strategies
12.5 African Bank
12.5.1 Card portfolio
12.5.2 Strategies

13 Appendix
13.1 Methodology
13.2 Contact Timetric
13.3 About Timetric
13.4 Timetric’s Services
13.5 Definitions
13.6 Disclaimer

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