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Cards and Payments Throughout Europe

Published By :


Published Date : Apr 2012

Category :

Cards & Payments

No. of Pages : 78 Pages


  • More people across Europe are using their debit cards to live within their means rather than borrowing to fund their lifestyles. The debit card is becoming the payment method of choice throughout Europe
  • This VRL report investigates cards and payments throughout the key economies in Europe
  • It provides analysis of the main market trends in the UK, Germany, Spain, France, Italy, Ireland, Greece and Portugal
  • It examines the impact of Europe-wide initiatives that are impacting on the financial services sector


There is a war on cash in Europe. Used for 6 out of 7 payment transactions in Europe, cash is disliked by governments and financial services organisations alike as it is expensive to manufacture, administer and keep secure. Cash is also the currency of the black economy in Europe and costs governments billions in unpaid taxes alone. This is a particular problem in some of the economically-troubled southern European countries. In Greece, Italy and Spain, for example, tax evasion is estimated to amount to 30%, 25% and 20% of the overall economy, respectively. As these countries and others in Europe attempt to clear budget deficits, governments will be keen for consumers to migrate towards more formal and traceable payments systems such as cards, credit transfers and direct debits. Cash tends to be a more popular payment method in southern European countries, where it accounts for more than 70% of retail sales payments. In the majority of northern European countries, non-cash payments account for the majority of retail sales transactions, with 30% or less being made using cash.


  • This report provides an analysis of the cards and payments systems of key countries within the proposed SEPA area, with a particular focus on the main markets in Western Europe
  • It also provides an assessment of the progress that different types of payment cards have made in light of the progress to full European EMV implementation
  • The progress that contactless payments are making on the European payments market is also considered
  • Likewise the growth of e-commerce in the region
Reasons To Buy

  • There is scope for replacing the reliance on cash and cheques by encouraging the update and use of plastic cards, electronic transfers and new innovations in payments
  • Consider why it is that stakeholders in financial systems (including governments and financial service organisations) are keen to migrate consumers from the use of cash to more formal and traceable payment methods
  • Find out about the trials involving contactless cards and mobile handsets in Spain, Italy and the UK
  • Compare the popularity of various payment methods throughout Europe and realise just how fragmented the market has become
Key Highlights

  • There is a war on cash in Europe, which is used for 6 out of 7 payment transactions
  • European consumers hold an average of 1.5 cards each, and the latest data suggests that the number of payment cards in circulation is stable
  • The European payments market is fragmented and complex, with 9,900 monetary financial institutions, just under 8,000 of which operate in the Euro area
  • New product innovations such as contactless cards have not yet started to make an impact on low value cash payments across Europe
Table Of Content

Executive Summary
List of Figures
List of Tables

1 Introduction to Cards and Payments in Europe
1.1 Non-cash payments in Europe
1.2 Cash is still king in Europe
1.3 Progress towards SEPA is off target
1.4 Noticeable Efforts - but SEPAS implementation is far from finished
1.5 SEPA Compliant transfers still lack depth
1.6 Banks and corporate initiatives to migrate to SEPA
1.7 Size and complexity of the European financial sector
1.8 Interchange fees differ by European country
1.9 Contactless payments the rhetoric and the reality
1.10 Debit cards are reducing the share of other payment methods in some markets
1.11 Consumer confidence is inhibiting consumer spending on cards
1.12 Low consumer confidence will affect spending on cards
1.13 E Commerce and the growth of new payment systems
1.14 PayPal and Payfair are growing their market share
1.15 Non-traditional challengers are beginning to emerge in the European payments market
1.16 EMV migration has reduced the value of fraud losses
1.17 Summary

2 Making inroads into cash reduction in the US
2.1 Cards account for over half of non-cash payments in the UK
2.2 The decline of cash
2.3 The proportion of banked consumers is at an all-time high in the UK
2.4 Debit cards are growing at the expense of cash, cheques and credit cards
2.5 Credit cards take a hit as consumers consolidate cards
2.6 Charge card volumes have remained flat for a decade
2.7 POS and ATM transactions reflect UK market trends
2.8 UK banks cancel 2018 cheque phasing deadline
2.9 Contactless payments are growing
2.10 Contactless payments trials and roll-outs
2.11 Barclaycard converts UK corporate cards portfolio into contactless cards
2.12 Interchange fees have been lowered to encourage merchant participation
2.13 Mobile devices will become the new wallet
2.14 Summary

3 Cash is still king in Germany
3.1 Debit cards dominate the German cards market
3.2 Zentraler Kreditausschuss (ZKA) Scheme
3.3 Credit cards are unpopular with German consumers
3.4 Charge cards have become increasingly popular in Germany
3.5 Prepaid Credit Cards in Germany
3.6 Key issuers in Germany
3.7 Landesbank Berlin
3.8 Barclaycard Germany
3.9 Crédit Mutuel-CIC, Targobank
3.10 Visa interchange fees for selected Germany payment methods
3.11 Contactless payments in Germany
3.12 Contactless prepaid card pilot
3.13 Contactless mobile travel in Germany
3.14 German consumers want the banks to manage mobile payments
3.15 Convenience payments dominate mobile payment preferences in Germany
3.16 PayWave and PayPass in Germany
3.17 Over half of German consumers bank online
3.18 Mobile banking is yet to gain popularity in Germany
3.19 Summary

4 The war on cash in Italy
4.1 Prepaid cards in Italy
4.2 Contactless payments in Italy
4.3 Vodafone, CartaSi launches prepaid contactless card
4.4 Contactless payments trials are Milan-centric
4.5 Transport paves the way for NFC payments
4.6 Plastic cards in Italy
4.7 Debit cards provide an opportunity for cash replacement in Italy
4.8 Credit cards in Italy
4.9 POS and ATM terminals
4.10 Overall lending is down from previous years
4.11 Tighter lending criteria provide opportunities for organised crime
4.12 Progress towards EMV migration in Italy
4.13 Internet banking has room for significant growth
4.14 Visa interchange fees for selected Italy payment methods
4.15 Summary

5 Cards and Payments in France
5.1 Plastic cards in France
5.2 Debit cards continue to show steady growth
5.3 Credit cards have also seen slight growth
5.4 Interchange fees by payment method
5.5 Launch of the MasterCard Display Card in France
5.6 Charge cards in France
5.7 Crédit Agricole rolls out contactless cards in France
5.8 Morpho partners with Moneo to launch contactless card in France
5.9 Crédit Agricole launches kwixo payments service
5.10 Visa launched contactless pilot in Strasbourg
5.11Prepaid cards: the PCS MasterCard
5.12 Cheques are in decline but still significant in France
5.13 Summary

6 Spain
6.1 Contactless payments in Spain
6.2 Contactless mobile payments – the Siteges experience
6.3 Definition of the economic model for contactless payments is required
6.4 Debit cards decline in volume
6.5 Room for growth in Credit cards
6.6 BBVA – increasing cardholder value through consumer focus and product rationalisation
6.7 BBVA consumers want simplicity and security
6.8 Rationalisation of the product portfolio to meet consumer needs
6.9 Internet banking in Spain
6.10Telefónica partners with RIM to launch mobile wallet in Spain
6.11 Issuers
6.12 Extensive ATM network
6.13 Summary

7 The need for product innovation in smaller european countries
7.1 Cards are the non-cash payment method of choice in Portugal
7.2 Portuguese consumers favour pay now cards in times of austerity
7.3 Debit cards dominate the Portuguese cards market
7.4 Interchange fees in Portugal
7.5 Cash still dominates the Greek payments market
7.6 Debit card volumes significantly outstrip credit cards
7.7 Contactless payments – a long way off for Greek consumers
7.8 Interchange fees in Greece
7.9 Internet banking has not yet gained momentum in Greece
7.10 Non-cash payment growth will be concentrated in the conurbations in Ireland
7.11Debit cards are increasingly popular in Ireland
7.12 Prepaid cards offer a growth opportunity in Ireland
7.13 Interchange fees in Ireland
7.14 Contactless payments in Ireland
7.15 Poland
7.16 Debit cards dominates the Poland market
7.17 First Data supports Raiffeisen Bank with the implementation of contactless card programme
7.18 Visa interchange fees in Poland 2012
7.19 Bulgaria
7.20 Debit cards accounts for 86% of total card market in Bulgaria
7.21Interchange fees by payment method
7.22 Summary

8 Cards and payments in Europe - Conclusions
8.1 Cash reduction is a key objective in most European countries
8.2 The decline of credit cards in Europe
8.3 The decline of cheques throughout Europe
8.4 Contactless cards are a long way off mass market adoption
8.5 Mobile wallets are even further from mass adoption than cards
8.6 Payment innovations will enable access to new market segments
8.7 The development of SEPA will continue to raise challenges
8.8 Summary

List of Table

Table 1: Cards and payments in Europe
Table 2: Card Payments in the EU (2010)
Table 3: Visa Europe interchange fees for consumer payments 2012
Table 4: Number and Value of transactions Debit cards
Table 5: Number and Value of transactions Credit cards
Table 6: Number and Value of transactions Charge cards
Table 7: Growth in number of transactions
Table 8: Visa interchange fees for selected UK payment methods
Table 9: Proportion of non-cash payments (in volume) in Germany
Table 10: Number and Value of transactions Credit cards
Table 11: Number and Value of transactions Charge cards
Table 12: Visa interchange fees in Germany 2012
Table 13: Proportion of non-cash payments (in volume) by payment type in Italy
Table 14: Number and Value of transactions Debit cards
Table 15: Number and Value of transactions Credit cards
Table 16: Number and Value of transactions Credit cards
Table 17: Visa interchange fees in Italy 2012
Table 18: Proportion of non-cash payments (in volume) by payment type in Italy
Table 19: Visa interchange fees in France 2012
Table 20: MasterCard Maestro interchange fees in France 2012
Table 21: Number and Value of transactions Debit cards
Table 22: Proportion of non-cash payments (in volume) by payment type in Portugal
Table 23: Visa interchange fees in Portugal 2012
Table 24: Proportion of non-cash payments (in volume) by payment type in Greece
Table 25: Visa interchange fees in Greece 2012
Table 26: Proportion of non-cash payments (in volume) by payment type in Ireland
Table 27: Visa interchange fees in Ireland 2012
Table 28: Visa interchange fees in Poland 2012
Table 29: Visa interchange fees in Bulgaria 2012
Table 30: Corruption index for selected European countries
Table 31: UK sub-prime lending products

List of Chart

Figure 1: Payment trends across the European Union
Figure 2: Cross border comparison by number of debit cards
Figure 3: Cross border comparison by number of credit cards
Figure 4: Number of MFIs by country in the EU
Figure 5: Consumer confidence across Europe, Q4 2011
Figure 6: PayPal growth in Europe 2011 2017
Figure 7: Deployment of EMV cards in Europe
Figure 8: Proportion of non-cash payments (by volume) by payment type in the UK
Figure 9: UK payment trends
Figure 10: Debit cards in the UK
Figure 11: Credit cards in the UK
Figure 12: Charge card volumes in the UK
Figure 13: Number of ATMs and POS terminals in the UK (2006 2010)
Figure 14: Debit cards in Germany (2007 2010)
Figure 15: Credit cards in Germany
Figure 16: Charge card in Germany
Figure 17: Internet banking and usage in Germany 2010
Figure 18: Smart phones by EU country (in 000)
Figure 19: Vodafone Smart Pass
Figure 20: Debit cards in Italy
Figure 21: Credit cards in Italy
Figure 22: Credit card - Volume of transactions in Italy
Figure 23: Number of POS and ATM terminals in Italy
Figure 24: Debit cards in France
Figure 25: Credit cards in France
Figure 26: MasterCard OTP cards
Figure 27: Charge cards in France
Figure 28: Proportion of non cash payments in 2010 - Spain
Figure 29: Debit card volumes in Spain
Figure 30: Credit cards in Spain
Figure 31: The growth of Internet banking in Spain
Figure 32: Payment card trends in Portugal 2006 2010
Figure 33: Payment cards in Greece
Figure 34: Debit and credit card volumes in Ireland
Figure 35: Debit, credit and Charge card volumes in Poland
Figure 36: Debit and credit card volumes in Bulgaria

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