Card Payments in Europe – Cards and payments at the POS and on the internet continued to drive significant growth in many European countries. The roll-out of contactless cards has started while there is again higher use of ATMs. New challenges for the industry are mPOS terminals, digital wallets and QR codes versus NFC technology.
by Horst Foerster – Head of Research, Payments Cards and Mobile
Across the 33 countries covered in the Yearbook, cards in issue and card payments by number and by value showed again significant growth rates. Also, while cash withdrawals grew, POS payments showed the most significant growth rates for a decade. By the end of 2012, card payments in the EEA region achieved a market share of 44.22% in the cashless payment market.
Cards and card use
In 2012, there were 927.5 million cards in issue in the E33 countries covered in the Yearbook, up 2.7% from 902.8 million in 2011. The number of cards per capita accounted for on average 1.46 in the EU27 countries and 1.53 in the E33 countries but varies significantly, ranging from a low of 0.64 in Romania to a high of 3.68 in Luxembourg. In 2012, 68.3% of all bank-issued cards were debit cards (See Table 1).
In 2012, there were 43.21 billion card payments in the E33 countries, showing a growth rate of 3.1% and amounting to an on average 74.9 payments per capita, ranging from 4.5 in Bulgaria to a high 333.8 in the exceptional case of Iceland, followed by Norway at 298.7. Further, card payments on the internet and on the mobile internet showed significant growth rates in 2012.
Card payments value across the E33 countries grew by 8.1% up to €2,360.0 billion at the end of 2012. The average transaction value (ATV) per card payment accounted for €54.62, up from €52.09 in 2011 (+4.8%).
Notable trends regarding cards and card payments (see individual country profiles) documented are:
- Card payments by value in the E33 countries grew in 2012, higher than the CAGR between 2007 and 2012;
- Contactless cards are issued in more than 28 countries of the region; the EMV migration is complete;
- More pilots with NFC payments on cards with cards stored on NFC stickers, microSD, or mobile SIM cards;
- From end of 2012, MasterCard and Visa Europe have launched digital wallets
- (e. g. MasterPass, V.me).
The debit card market share continued to grow in 2012. Five countries – Croatia, Cyprus, Hungary, Lithuania, Luxembourg and Serbia – recorded a fall in the number of debit cards issued, while numbers were static in several smaller countries and in Germany. Because of the migration of debit cards from Bancomat to VPAY in Luxembourg, the fall of card numbers by 23.8% sounds logical due to the inflated card base during the migration.
However, led by Turkey and France, the region’s total debit card base grew by 31.2 million cards to 633.2 million (+5.2%), with debit card penetration per capita reaching close to 1.05 debit cards per capita.
In 2012, debit card payments continued to grow across most of Europe (CAGR 8.7% between 2007 and 2012) amounting to 35.4 billion. The payments value on debit cards was €1,693.8 billion (+8.2% on 2011) and fell in no country of the region. The UK and France accounted for €861.8 billion of the total payments value on debit cards, 50.9% of the regional total.
Notable domestic card trends (see individual country profiles) documented are:
- More electronic purses to be phased-out: CASH (CH), Chipknip (NL), Proton (B);
- Ireland: Laser debit cards are to be replaced by Visa and MasterCard debit cards.
Credit/delayed debit cards
Credit/delayed debit cards showed a slightly lower growth rate (CAGR 6.7%) than debit card payments. In 2012, they grew by 4.3 million cards to 293.9 million (+1.5% on 2011) with a penetration of 0.49 cards per capita in the E33 countries. Some countries – Greece, Cyprus, Denmark, Italy, Malta and Slovenia – reported a fall in credit card numbers due to the local economic situation.
In 2012, there were 9,688.3 million delayed debit/credit card payments (+6.5%). With 38.2% growth over the last five years, credit/delayed debit card payments increased at a slower rate than debit cards (51.6%). However, the slowdown in the UK accounted for most of the relative under-performance.
Payments value on credit/delayed debit cards was €676.3 billion as at end-2012 (+9.4% on 2011) and fell only in Greece, Spain, and Ireland. The UK credit card market by number has essentially been flat for several years but grew by 7.6% in 2010, by 1.1% in 2011, and by 4.5% in 2012.
EFTPOS terminals and POS payments
In 2012, the EFTPOS terminal base continued to grow across the region by 7.7% to 12.3 million and the on-average number of payments per POS per month was 297.1 transactions (+0.1%). Five countries – Turkey, Spain, France, Italy and the UK – accounted for 68.33% of the region’s POS terminal base, unchanged since 2005. The very high growth rates in France (+27%) and in the UK (+20.4%) reflect the roll-out of contactless POS terminals and mPOS terminals. In 2012, Hungary, Lithuania, Poland, Slovenia, and Switzerland were the other countries reporting growth rates higher than 10%.
On the other hand, Greece (-11.3%), Croatia (-9.6%), Estonia (-9.6%) and Luxembourg (-9.3%) had a sharp decline year-over-year. Also, Belgium, Finland, Latvia, the Netherlands, Portugal, and Spain reported a decline. In 2012, the completion of EMV migration, final phase-out of old magnetic stripe terminals, roll-out of contactless terminals, and consolidation of the POS terminal base are reasons why the growth rate figures of 2012 look very different (See Table 2).
The total of POS payments by number accounted for 44.07 billion payments in 2012 from 40.86 billion in 2011.They showed an overall growth rate of 7.8% in 2012, lower than the CAGR of 8.5% in the last five years. There were on average 73.0 POS payments per capita (+7.6% on 2011) and the ATV per POS payment in the EU27 countries amounted to €51.46. In 2012, the statistical ATV per POS payment indicator showed a range from €16.5 (Estonia) up to €112.2 (Switzerland).
In 2012, POS payments per capita ranged from 5.0 payments (Bulgaria) up to an extremely high 373.4 payments (Iceland). In 2012, the top 10 list was headed again by the Nordic countries (Iceland, Norway, Finland, Sweden and Denmark), followed by the UK, Estonia, the Netherlands, France and Portugal.
Notable trends regarding the EFTPOS terminal infrastructure (see individual country profiles) documented are:
- EFTPOS terminals by number are growing, also driven by the roll-out of contactless POS terminals;
- EMV migration was complete by mid-2013; PayPass, and payWave acceptance is making significant progress;
- The roll-out of mini-EFTPOS terminals (mPOS terminals) to service very small and mobile merchants has started.
ATMs and cash withdrawals
The number of ATMs continued to grow across the E33 countries covered in the Yearbook (+0.8%), advancing by 10.5% to 450,459 between 2007 and 2012. However, the growth rate in 2012 was lower than the low CAGR of 2.0% in the last five years. The number of cash withdrawals per ATM per month accounted for 2,530.4 transactions (+0.4% on 2011).
As at end-2012, twenty countries reported declining numbers of ATMs installed, e.g. Estonia (-6.2%), Sweden (-4.2%) and Ireland (-4.1%). Those countries reporting a substantial growth of their ATM population include Turkey (+11.9%), Malta (+10.8%), Poland (+6.7%) and the Czech Republic (+4.1%).
Due to bank mergers and higher use of cards at POS terminals, the mid-term trend of declining ATM installations gained momentum. In 2012, the ATM density per 1 million capita ranged from 359 in Sweden to 1,452 in Portugal (Table 3).
Across the E33 countries, cash withdrawals by number accounted for 13.68 billion withdrawals from 13.51 billion in 2011, showing an overall growth rate of 1.2% in 2012, lower than the CAGR of 1.8% in the last five years. In the EU27 countries, there were 24.2 cash withdrawals per capita, ranging from 9.0 withdrawals per capita in Serbia up to a high 46.1 withdrawals per capita in the UK.
Cash withdrawal value across the E33 countries grew by 4.0% in 2012 up to €1,568.7 billion and the ATV per cash withdrawal amounted to €114.69 (+2.8% on 2011). In 2012, the UK, France, and Germany accounted for 51.7% of the EU total of cash withdrawals by value, down from 59.4% in 2005.
The continued growth in the total of ATMs and cash transactions by number and by value indicates that the battle against cash has not yet started. This bodes well for opportunities in prepaid, contactless and other online and mobile forms of electronic payment.
Notable trends regarding the ATM terminal infrastructure (see individual country profiles) documented are:
- ATM terminals installed and cash withdrawals by number and by value declined in more countries than in 2011;
- EMV migration of ATMs is complete; more VPAY, Discover, and UnionPay acceptance at ATMs;
- More contactless ATM pilots – withdrawals on contactless cards or initiated by mobile bank app request.
The European Payment Cards Yearbook 2013-14
The latest edition of the European Payment Cards Yearbook 2013-14 is based on end-2012 payment industry figures, reports on recent card market developments, and indicates new trends.
Rich statistical data is provided by country including typical key performance indicators to document the growth of cards in issue and the growth of transactions by number and value.
Further, more information was added on card brands issued and accepted by country, on leading issuers, acquirers, and processors by country, on cards and internet payments, views on notable market trends, and views on notable mobile payments initiatives.
Note: This article is compiled using detail information adapted from individual country profiles and from the European Overview section of the European Payment Cards Yearbook 2013-14.