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

Published By :

Timetric

Published Date : Nov 2013

Category :

Banking

No. of Pages : 107 Pages


Synopsis

The report provides market analysis, information and insights into the UK cards and payments industry, including:

  • Current and forecast values for each category of the UK 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 cards and payments industry.
  • Detailed analysis of the marketing strategies adopted for selling debit, credit, charge and 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 cards and payments industry.

Executive summary

In terms of card volume, the UK card payments channel grew at a CAGR of 4.55% during the review period (2008–2012). The largest share of the channel was occupied by the debit card category with 43.8% in 2012, followed by the credit cards category with 27.9%. Over the forecast period, the prepaid cards category is expected to surpass credit cards in terms of card volume to occupy the second-largest share, after debit cards, with 35.5% in 2017. Banks present competitive pricing strategies and offer attractive introductory interest rates to generate new subscriptions. Many banks extend 0% introductory interest rates on purchases and balance transfers for the first few months as well as competitive annual percentage rates (APRs) on credit cards. There was a considerable increase in the prompt payment of credit card bills during the review period which caused a loss in interest income for many banks. Banks are considering charging an annual fee to compensate for such losses.

Scope

  • This report provides a comprehensive analysis of the UK cards and payments industry.
  • It provides current values for the UK cards and payments industry for 2012 and forecast figures for 2017.
  • It details the different macroeconomic, infrastructural, consumer and business drivers affecting the UK 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 cards and payments industry.

Reasons to buy

  • Make strategic business decisions using historic and forecast market data related to the UK cards and payments industry and each market within it.
  • Understand the key market trends and growth opportunities within the UK cards and payments industry.
  • Assess the competitive dynamics in the UK 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 cards and payments industry.

Key highlights

  • The prepaid card category constituted 25.0% of the overall cards payments channel in 2012 and is expected to register significant growth over the forecast period to reach a 35.5% share by 2017. There are a number of prepaid card issuers in the country, both bank and non-bank, and prepaid cards have potential for growth in the travel, gifting and low value retail sectors.
  • Contactless cards were first issued in the UK in 2003 and, as of 2012, there were nearly 23 million cards in circulation. Leading banks that have rolled out contactless payments include Barclays, Lloyds, Bank of America (MBNA), HSBC and Royal Bank of Scotland (RBS).
  • Customer attempts to reduce existing debt is expected to prompt a reduction in credit consumption as purchases are made based on income and savings. This shift in consumer attitudes is expected to lead to a decline in the credit card category’s share from 27.1% in 2013 to 23.7% in 2017.
  • Banks present competitive pricing strategies and offer attractive introductory interest rates to generate new subscriptions. Many banks extend 0% introductory interest rates on purchases and balance transfers for the first few months as well as competitive annual percentage rates (APRs) on credit cards.
Table of contents

1 Executive Summary

2 Analysis of Market Environment and Key Trends and Drivers
2.1 Payment Infrastructure and Emerging Technologies
2.1.1 ATMs
2.1.2 POS terminals
2.1.3 Near-field communication (NFC)
2.1.4 Internet penetration
2.1.5 Network related
2.2 Business Drivers
2.2.1 Growth of gift cards
2.2.2 Growth of e-commerce and m-commerce
2.2.3 Decrease in credit card loan write-offs and delinquencies
2.3 Macroeconomic Drivers
2.3.1 Decrease in central bank interest rate to improve credit availability in the economy
2.3.2 Inflation
2.3.3 GDP per capita income

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

4 Regulatory Framework and Card Fraud Statistics
4.1 Regulatory Framework
4.1.1 Status of implementation of Payment Services Directive in the UK
4.1.2 Single European Payment Area (SEPA) implementation in the UK
4.1.3 Best practice guidelines set by UK Payment Cards Association
4.1.4 Other regulations applicable to the credit card category
4.1.5 The Anti-Money Laundering legislation 2012 and Know your Customer Rule
4.1.6 Foreign direct investment (FDI) regulation
4.2 Card Fraud Statistics
4.2.1 Cards-not-present
4.2.2 Counterfeit cards
4.2.3 Cards lost/stolen
4.2.4 Card ID theft

5 Emerging Consumer Attitudes and Trends
5.1 Market Segmentation and Targeting
5.1.1 Retail segment
5.1.2 Corporate segment
5.2 Travel and Tourism Spending
5.2.1 Outbound tourist volume
5.2.2 Outbound tourist spending
5.2.3 Outbound tourist card 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 card volume
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 volume 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 Segment Size and Forecast
7.3.1 Analysis by volume of cards in circulation
7.3.2 Analysis by transaction value
7.3.3 Analysis by transaction volume
7.4 Commercial Credit Cards Segment 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 Segment 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 Segment Size and Forecast
9.4.1 Analysis by volume 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 volume of cards in circulation
10.3.2 Analysis by transaction value

11 Merchant Acquiring
11.1 Merchant Acquirers in the UK

12 Company Profiles of Card Issuers
12.1 Santander UK Plc
12.1.1 Key financials
12.1.2 Card portfolio
12.1.3 Strategies
12.2 Lloyds Banking Group
12.2.1 Key financials
12.2.2 Card portfolio
12.2.3 Strategies
12.3 Barclays Bank
12.3.1 Key financials
12.3.2 Card portfolio
12.3.3 Strategies
12.4 HSBC Bank
12.4.1 Key financials
12.4.2 Card portfolio
12.4.3 Strategies
12.5 The Royal Bank of Scotland Group
12.5.1 Key financials
12.5.2 Card portfolio
12.5.3 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

List of Table


Table 1: The UK – Payment Channels (GBP Billion), 2008–2012
Table 2: Market Entry Strategy of Foreign Banks in the UK
Table 3: The UK – Card Fraud (GBP Million), 2008–2012
Table 4: Credit Cards Targeting Football Fans
Table 5: Credit Cards for People with Bad Credit History
Table 6: The UK – Consumer Spending through Cards by Product Category (GBP Million), 2008–2012
Table 7: The UK – Consumer Spending Through Cards by Retail Channel (GBP Million), 2008–2017
Table 8: The UK – Card Payments Channel by Card Category (Million), 2008–2017
Table 9: The UK – Card Payments Channel Size by Card Volume (Million), 2008–2017
Table 10: The UK – Card Payments Channel Size by Transaction Value (GBP Billion), 2008–2017
Table 11: The UK – Card Payments Channel Size by Transaction Value (US$ Billion), 2008–2017
Table 12: The UK – Credit Cards Category Size by Volume of Cards (Million), 2008–2017
Table 13: The UK – Credit Cards Category Size by Transaction Value (GBP Billion), 2008–2017
Table 14: The UK – Credit Cards Category Size by Transaction Value (US$ Billion), 2008–2017
Table 15: The UK – Credit Cards Category Size by Transaction Volume (Million), 2008–2017
Table 16: The UK – Personal Credit Cards Segment Size by Volume of Cards (Million), 2008–2017
Table 17: The UK – Personal Credit Cards Segment Size by Transaction Value (GBP Billion), 2008–2017
Table 18: The UK – Personal Credit Cards Segment Size by Transaction Value (US$ Billion), 2008–2017
Table 19: The UK – Personal Credit Cards Segment Size by Transaction Volume (Billion), 2008–2017
Table 20: The UK – Commercial Credit Cards Segment Size by Card Volume (Thousand), 2008–2017
Table 21: The UK – Commercial Credit Cards Segment Size by Transaction Value (GBP Million), 2008–2017
Table 22: The UK – Commercial Credit Cards Segment Size by Transaction Value (US$ Million), 2008–2017
Table 23: The UK – Commercial Credit Cards Segment Size by Transaction Volume (Million), 2008–2017
Table 24: The UK – Debit Cards Category Size by Volume of Cards (Million), 2008–2017
Table 25: The UK – Debit Cards Category Size by Transaction Value (GBP Billion), 2008–2017
Table 26: The UK – Debit Cards Category Size by Transaction Value (US$ Billion), 2008–2017
Table 27: The UK – Debit Cards Category Size by Transaction Volume (Billion), 2008–2017
Table 28: The UK – Charge Cards Category Size by Volume of Cards (Million), 2008–2017
Table 29: The UK – Charge Cards Category Size by Transaction Value (GBP Billion), 2008–2017
Table 30: The UK – Charge Cards Category Size by Transaction Value (US$ Billion), 2008–2017
Table 31: The UK – Charge Cards Category Size by Transaction Volume (Million), 2008–2017
Table 32: The UK – Personal Charge Cards Segment Size by Volume of Cards (Million), 2008–2017
Table 33: The UK – Personal Charge Cards Segment Size by Transaction Value (GBP Billion),
Table 34: The UK – Personal Charge Cards Segment Size by Transaction Value (US$ Billion),
Table 35: The UK – Personal Charge Cards Segment Size by Transaction Volume (Million), 2008–2017
Table 36: The UK – Commercial Charge Cards Segment Size by Volume of Cards (Million), 2008–2017
Table 37: The UK – Commercial Charge Cards Segment Size by Transaction Value (GBP Billion), 2008–2017
Table 38: The UK – Commercial Charge Cards Segment Size by Transaction Value (US$ Billion),
Table 39: The UK – Commercial Charge Cards Segment Size by Transaction Volume (Million),
Table 40: The UK – Prepaid Cards Category Size by Volume of Cards (Million), 2008–2017
Table 41: The UK – Prepaid Cards Category Size by Transaction Value (GBP Billion), 2008–2017
Table 42: The UK – Prepaid Cards Category Size by Transaction Value (US$ Billion), 2008–2017
Table 43: The UK – Open-Loop Prepaid Cards Segment Size by Volume of Cards (Million), 2008–2017
Table 44: The UK – Open-Loop Prepaid Cards Segment Size by Transaction Value (GBP Billion), 2008–2017
Table 45: The UK – Open-Loop Prepaid Cards Segment Size by Transaction Value (US$ Billion),
Table 46: The UK – Closed-Loop Prepaid Cards Segment Size by Volume of Cards (Million), 2008–2017
Table 47: The UK – Closed-Loop Prepaid Cards Segment Size by Transaction Value (GBP Billion),
Table 48: The UK – Closed-Loop Prepaid Cards Segment Size by Transaction Value (US$ Billion),
Table 49: Santander – Key Financial Indicators (GBP Million), 2011 and 2012
Table 50: Santander – Card Product Offerings and Key Features
Table 51: Lloyds Banking Group – Key Financial Indicators (GBP Million), 2011 and 2012
Table 52: Lloyds Banking Group – Card Product Offerings and Key Features
Table 53: Barclays Bank – Key Financial Indicators (GBP Million), 2012 and 2012
Table 54: Barclays Bank – Card Product Offerings and Key Features
Table 55: HSBC Bank – Key Financial Indicators (GBP Billion), 2011 and 2012
Table 56: HSBC Bank – Card Product Offerings and Key Features
Table 57: RBS Group – Key Financial Indicators (GBP Million), 2011 and 2012
Table 58: RBS Group – Card Product Offerings and Key Features
Table 59: Key Definitions

List of Chart


Figure 1: Benchmarking UK Card Payments Against Other Large Markets in the Region
Figure 2: The UK – Growth of Various Card Categories (%), 2008–2017
Figure 3: ATM Penetration Per 100,000 Inhabitants in the UK, 2008–2017
Figure 4: POS Terminal Penetration Per 100,000 Inhabitants in the UK, 2008–2017
Figure 5: Growth in Number of Internet Users in the UK (Million), 2008–2012
Figure 6: Gift Card and Voucher Sales in the UK (GPB Billion), 2008–2012
Figure 7: Central Bank Interest Rate (%), 2008–2012
Figure 8: Inflation – Average Consumer Prices (Percentage Change), 2008–2017
Figure 9: GDP Per Capita Income Growth (US$ Thousand), 2008–2017
Figure 10: The UK – Share of Payment Channels (%), 2008 and 2012
Figure 11: The UK – Card Fraud (GBP Million), 2008 and 2012
Figure 12: The UK – Card Fraud Value by Cards-Not-Present (GBP Million), 2008–2012
Figure 13: The UK – Card Fraud Value by Counterfeit Cards (GBP Million), 2008–2012
Figure 14: The UK – Value of Card Fraud by Cards Lost/Stolen (GBP Million), 2008–2012
Figure 15: The UK – Card ID Theft Fraud Value (GBP Million), 2008–2012
Figure 16: The UK – Card Payments Channel Segmentation by Card Type
Figure 17: The UK – Volume of Outbound Departures (Million), 2008–2012
Figure 18: The UK – Outbound Tourist Spending (US$ Billion), 2008–2017
Figure 19: The UK – Outbound Tourist Card Spending (GBP Million), 2012
Figure 20: The UK – Retail Consumer Card Spending by Product Category (%), 2012
Figure 21: The UK – Retail Consumer Card Spending by Retail Channel (%), 2012
Figure 22: The UK – Card Payments Channel by Card Category (%), 2008–2017
Figure 23: The UK – Card Payments Channel Size by Card Volume (Million), 2008–2017
Figure 24: The UK – Card Payments Channel Size by Transaction Value (GBP Billion), 2008–2017
Figure 25: The UK – Credit Cards Penetration Per 100 Inhabitants, 2008–2017
Figure 26: The UK – Credit Cards Category Size by Volume of Cards (Million), 2008–2017
Figure 27: The UK – Credit Cards Category Size by Transaction Value (GBP Billion), 2008–2017
Figure 28: The UK – Credit Cards Category Size by Transaction Volume (Million), 2008–2017
Figure 29: The UK – Credit Card Transaction Value by Channel (GBP Billion), 2008–2017
Figure 30: The UK – Credit Card Transaction Volume by Channel (Million), 2008–2017
Figure 31: The UK – Personal Credit Cards Segment Size by Volume of Cards (Million), 2008–2017
Figure 32: The UK – Personal Credit Cards Segment Size by Transaction Value (GBP Billion), 2008–2017
Figure 33: The UK – Personal Credit Cards Segment Size by Transaction Volume (Billion), 2008–2017
Figure 34: The UK – Commercial Credit Cards Segment Size by Card Volume (Thousand), 2008–2017
Figure 35: The UK – Commercial Credit Cards Segment Size by Transaction Value (GBP Million), 2008–2017
Figure 36: The UK – Commercial Credit Cards Segment Size by Transaction Volume (Million), 2008–2017
Figure 37: The UK – Credit Cards Category Share by Scheme (%), 2012
Figure 38: The UK – Credit Cards Category Share by Bank (%), 2012
Figure 39: The UK – Debit Cards Category Penetration Per 100 Inhabitants, 2008–2017
Figure 40: The UK – Debit Card Category Size by Volume of Cards (Million), 2008–2017
Figure 41: The UK – Debit Cards Category Size by Transaction Value (GBP Billion), 2008–2017
Figure 42: The UK – Debit Cards Category Size by Transaction Volume (Billion), 2008–2017
Figure 43: The UK – Debit Cards Category Transaction Value Share Analysis by Channel (Million), 2008–2017
Figure 44: The UK – Debit Card Transactions Volume Share Analysis by Channel (Million), 2008–2017
Figure 45: The UK – Debit Cards Category Share by Scheme (%), 2012
Figure 46: The UK – Debit Cards Category Share by Bank (%), 2012
Figure 47: The UK – Charge Cards Category Penetration Per 100 Inhabitants, 2008–2017
Figure 48: The UK – Charge Cards Category Size by Volume of Cards (Million), 2008–2017
Figure 49: The UK – Charge Cards Category Size by Transaction Value (GBP Billion), 2008–2017
Figure 50: The UK – Charge Cards Category Size by Transaction Volume (Million), 2008–2017
Figure 51: The UK – Charge Card Transaction Value Share Analysis by Channel (GBP Million), 2008–2017
Figure 52: The UK – Charge Card Transaction Volume Share Analysis by Channel (Million), 2008–2017
Figure 53: The UK – Personal Charge Cards Segment Size by Volume of Cards (Million), 2008–2017
Figure 54: The UK – Personal Charge Cards Segment Size by Transaction Value (GBP Billion), 2008–2017
Figure 55: The UK – Personal Charge Cards Segment Size by Transaction Volume (Million), 2008–2017
Figure 56: The UK – Commercial Charge Cards Segment Size by Volume of Cards (Million), 2008–2017
Figure 57: The UK – Commercial Charge Cards Segment Size by Transaction Value (GBP Billion), 2008–2017
Figure 58: The UK – Commercial Charge Cards Segment Size by Transaction Volume (Million), 2008–2017
Figure 59: The UK – Charge Cards Category Share by Scheme (%), 2012
Figure 60: The UK – Charge Cards Category Share by Issuer (%), 2012
Figure 61: The UK – Prepaid Cards Category Penetration Per 100 Inhabitants, 2008–2017
Figure 62: The UK – Prepaid Cards Category Size by Volume of Cards (Million), 2008–2017
Figure 63: The UK – Prepaid Cards Category Size by Transaction Value (GBP Billion), 2008–2017
Figure 64: The UK – Open-Loop Prepaid Cards Segment Size by Volume of Cards (Million), 2008–2017
Figure 65: The UK – Open-Loop Prepaid Cards Segment Size by Transaction Value (GBP Billion), 2008–2017
Figure 66: The UK – Closed-Loop Prepaid Cards Segment Size by Volume of Cards (Million), 2008–2017
Figure 67: The UK – Closed-Loop Prepaid Cards Segment Size by Transaction Value (GBP Billion), 2008–2017
Figure 68: Transaction Volume of Card Payments at Key Merchant Acquirers in Europe (Billion), 2012

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