Driven by contactless card payments and by increased card usage, in 2017 the number of card payments continued to grow across the 33 countries covered by our PCM’s Payment Card Yearbooks.
POS payments showed further strong growth, while cash withdrawals by card declined. In addition, cardless bank payment services and mobile payment apps gained momentum.
Horst Foerster, Head of Research at Payments Cards and Mobile, examines the statistics and significant trends.
Cards and Card Use in Europe
By the end of 2017, card payments by number accounted for 55.3 percent of cashless payments in Europe, up from 52.2 percent the previous year.
Across the 33 European countries covered by the Yearbook, there were 1,034.2 million cards in circulation at the end of 2017, up 3.2 percent over 2016, of which 68.6 percent were debit cards. On average, there were 1.59 cards per capita in the 28 EU countries, and 1.71 in the E33 countries. The number of cards held varied significantly between countries, from a low of 0.83 in Romania to a high of 4.32 in Luxembourg.
In 2017, there were 77.8 billion card payments in the E33 countries, a growth rate of 11.4 percent over 2016. There was an average of 127.1 payments per capita, ranging from 18.3 in Bulgaria and 23.5 in Romania to a high of 421.5 in Iceland and 425.4 in Norway. In addition, online payments and payments initiated from mobile devices grew by more than 10 and 20 percent respectively over 2016.
The value of card payments across the E33 countries grew by 3.5 per cent to €3,395 billion by the end of 2017, up by 45.8 percent over the five years since 2012. The calculated Average Transaction Value (ATV) per card payment declined to €43.65, down by 7.1 percent from 2016, reflecting more lower-value payments.
Notable trends across the E33 countries include:
Higher card use led to a growing number of POS and online payments and more low-value contactless payments. In 2017, card payments by number and by value once again grew more rapidly than the compound annual growth rate (CAGR) between 2012 and 2017.
- All the E33 countries promoted contactless card payments and mobile HCE NFC payment services, including all the European domestic debit card schemes. Almost all banks issued contactless cards in 2017.
- Contactless card payments, now considered the new normal in Europe and embraced by many cardholders, showed significant growth rates. In December 2018, around 30 percent of all card payments in the UK were contactless payments.
- More European banking groups supported digital wallets such as MasterPass and Visa Checkout, as well as the ‘Giant Pays’: Apple Pay, Samsung Pay, and Google Pay, all of which launched in more European markets in 2017.
- More European banks combined their mobile banking apps with IBAN-based bank payments directly from bank accounts. Among others, payment apps such as BLIK, Jiffy, PayConiq, Swish and Vipps use QR-codes as bridging technologies to enable cardless bank payments in-store.
- Effective from 9 December 2015 and 9 June 2016, respectively, an interchange fee cap and payment application selection provision were implemented in all countries of the EEA region.
- New challenges for the payments industry emerging in 2017 included 3D-Secure 2.0, tokenisation security, and the implementation of strong customer authentication according to technical regulatory standards relating to the PSD2 (RTS SCA).
Debit Cards
In 2017, the E33 region’s total debit card base grew by 23.7 million cards to 709.4 million, an increase of 3.5 percent, and CAGR of 2.2 percent. On average, there were around 1.15 debit cards per capita across Europe. Only six countries recorded a decline in the total number of debit cards due to consolidation of card portfolios following the rollout of contactless cards. The greatest declines were seen in Iceland (-9.4 percent) and Sweden (-5.7 percent). Latvia, Cyprus, Turkey, Greece and Poland showed higher debit card growth than usual.
There were 63.6 billion payments on debit cards in 2017, a 11.3 percent increase on 2016, with a total value of €2.58 trillion. All the major developed markets continued to show significant growth in the number of debit payments in 2017. The leaders, the UK and France, accounted for 29.2 billion debit card payments in 2017, an impressive 45.8 percent of the regional total. With specific regard to Germany, 1.5 billion card-initiated IBAN-based ELV direct debits totalling €76.5 billion are not included in the debit card total.
Notable trends across the E33 countries include:
- All domestic debit card schemes issued contactless cards in 2017, including the card schemes Girocard in Germany, TROY in Turkey, and MIR in Russia.
- More card issuers replaced their Maestro and Electron cards with contactless cards branded Debit Mastercard or Visa Debit, respectively. Even in Girocard-country Germany, nine card issuers launched Debit Mastercard cards.
- Instead of pushing debit card use on the internet, more European banks launched mobile banking apps combined with IBAN-based payments direct from the account alongside immediate mobile P2P money transfers.
- The last active e-purse system in Europe, German GeldKarte, will be replaced by contactless girocard cards.
Credit/Delayed Debit Cards
In 2017, the total credit/delayed debit card base grew by 8.8 million cards to 324.8 million, up slightly by 2.8 percent over 2016. There were 0.53 credit cards per capita on average across the E33 countries, although credit card countries, such as Greece, Ireland, Turkey and the UK accounted for 131.7 million credit/delayed debit cards, 40.5 percent of the total.
There were 14.1 billion delayed debit/credit card payments in 2017. With a CAGR of 8.0 percent growth over the last five years, credit/delayed debit card payments increased at a lower rate than debit cards, which grew by 12.3 percent over the same period. In 2017, just two countries – Latvia and Belgium – recorded a fall in the number of payments on credit/delayed debit cards.
The value of credit/delayed debit cards payments was €813.2 billion, a rise of 2.2 percent over 2016. The UK credit card market has essentially been flat for several years but grew again from 2009 and showed moderate growth of 0.8 percent in 2017. The value of spending on credit/delayed debit cards fell in Latvia, Turkey, Belgium and Sweden.
Notable trends across the E33 countries include:
- Most credit/delayed debit cards are contactless cards, including the remaining domestic credit card schemes. PIN authentication will replace signature-based authentication.
- More European banks launched mobile HCE NFC payments on credit cards in 2017.
- The domestic interchange fee cap for delayed debit/credit consumer cards is stimulating credit card acceptance in many European merchant outlets.
POS Terminals and POS Payments
In 2017, the POS terminal base across the E33 countries grew by 7.3 percent to 15.8 million (CAGR: 6.1 percent). The roll-out of contactless POS terminals and mPOS terminals for small merchants has contributed to stronger growth since 2015.
The total number of POS payments was 69.9 billion, up from 55.7 billion in 2015. There was an overall growth rate of 14.6 percent compared to 2015, which was again higher than the CAGR of 9.5 percent seen over the last five years. On average, there were 113.7 POS payments per capita each year, with a statistical POS ATV of €42.17 across the E33 countries. Naturally, the POS ATV varies by country and reflects national payment habits. At one end of the scale, Latvia had an ATV per POS payment of €15.6, while at the other end, Italy boasted an ATV of €67.8 for each POS payment.
POS payments per capita once again showed a range from 15.7 POS payments in Bulgaria up to an extremely high 443.1 POS payments for each person in Iceland. The Nordic countries topped the POS payments table: Iceland, Norway, Sweden, Denmark and Finland occupied the top five spots. They were followed by the UK, Estonia, the Netherlands, France and Belgium.
Notable trends across the E33 countries include:
- 79.2 percent of all domestic POS payments on cards in Europe are now EMV transactions, according to the European Central Bank. This includes contactless payments and mobile HCE NFC payments.
- The rollout of contactless POS terminals and tablet-based retailing solutions combined with contactless mPOS terminals continues. Innovations at POS include various payment and loyalty applications based around the display of QR-codes, Bluetooth Smart (BLE) and beacon technologies.
- Combined tablet PC and mPOS retailing solutions have allowed for mobile payments in-store both on cards and on cardless payment means. This includes in-app payments with mobile banking apps.
- Cash advances on cards at POS terminals in merchant outlets is a hot topic, since this allows for the circumvention of ATMs.
- Driven by connected consumers, modern retailers intend to offer omni-channel retailing services. The implication of this is a growing demand for multiple payment services at any type of checkout device from supporting acquirers, both for cards and for cardless bank payments.
ATMs and Cash Withdrawals
The number of ATMs continued to decline slightly, with 459,645 ATMs across the E33 countries covered in the Yearbook. This decline of -0.3 percent from 2016 compares with a low CAGR of +0.4 percent in ATM numbers over the last five years. The number of cash withdrawals per ATM each month amounted to an average of 2,494 withdrawals.
In Europe, there is a medium-term trend of declining ATM installations owing to bank mergers, branch closures and the higher use of cards. In 2017, ATM density per million inhabitants showed a wide range, from 247 in mature Sweden to a high of 1,315 in Portugal.
The total number of cash withdrawals across all E33 countries covered in the Yearbook showed an overall decline of -2.2 percent from 2016 and a compound annual growth rate of +0.1 percent over the last five years. There were 13.76 billion cash withdrawals performed across the E33 countries. In 2017, there were 22.4 withdrawals on cards per capita, ranging from 7.7 withdrawals in Norway up to an elevated 44.9 withdrawals per capita in Portugal.
The total value of cash withdrawals on cards declined overall by 3.1 percent from 2016, representing a compound annual growth rate of 2.5 percent between 2012 and 2017. A total of €1,787.7 billion was withdrawn from ATMs across in the region in 2017, with the ATV per withdrawal being €129.94. The UK, France and Germany accounted for 47.8 percent of the total of cash withdrawn by value, down from 59.4 percent in 2005.
Notable trends across the E33 countries include:
- ATM terminals installed and cash withdrawals by number and by value continued to decline in many countries. This compares with notably higher card use, including contactless payments.
- Applicable ATM technologies include: touch screens, contactless functions, the display of QR codes and cardless withdrawal functions.
- In addition, other ATM services offered include: account balance statements, credit transfer functions, cash-in functions, bank advertising and recharging of prepaid mobiles.
- Cardless ATM pilot projects are allowing for cash withdrawals initiated by mobile banking apps using one-time token authentication systems. Biometric ATMs with finger vein authentication are being trialled in the UK, Denmark and elsewhere.
- Contactless ATMs, cardless withdrawals initiated using mobile banking apps, biometric authentication and the extension of the ATM as a self-service channel both in-branch and outside of core banking hours are becoming more widespread.
- Cash advances on cards at POS terminals are competing with outdoor ATMs in retail locations.
Cards and Remote Payments on the Internet
In 2017, around 87 percent of households in the 28 EU member states had internet access, 85 percent of individuals in the EU28 countries used the internet and 51 percent were online banking users.
In 2017, online payments and mobile payments in the E33 countries showed continued growth rates higher than 10 percent and 20 percent respectively. With eGDP representing a 7.9 percent share of total GDP, the UK is the largest e-commerce market in Europe and the third largest worldwide, behind China and the US.
In Europe, the online payment mix varies by country, reflecting national payment habits. This mix is composed of credit cards, debit cards, prepaid cards, IBAN-based payments directly from bank accounts, wallets such as PayPal, prepaid products and, from November 2017, immediate payments.
In addition, online merchants accept traditional payment services such as payment on invoice, payment in advance, card/cash on delivery, instalment payments and payment on delivery in outlets (click&collect).
Online payments and mobile payments are indispensable parts of digital commerce in the E33 countries. Online buyers purchase using PCs, notebooks, tablets and smartphones, and initiate more and more remote payments from their internet-capable mobile devices. In 2017, for example 83 percent of mobile phone users in the UK accessed the internet via mobile devices, and 41 percent made online purchases using tablets or smartphones.
Thanks to digital technologies (tablets, smartphones, mobile apps, QR codes, 1D-barcodes, Bluetooth BLE and HCE NFC with tokenisation security), both digital commerce and retail outlets with POS terminals are converging into an omnichannel commerce ecosystem, including in-app payments and mobile in-store payments.
The European Payment Cards Yearbook 2018-19
The latest edition of the European Payment Cards Yearbook 2018-19 is based on end-2017 payment industry figures. It reports recent card market developments and the latest card business trends. Rich statistical data is provided for each country, including typical key performance indicators to document the growth of cards in issue and the growth of transactions by number and by value.
Further information on leading issuers, acquirers, processors and PSPs, on cards and card-less payments, on ATM/POS payments and online payments, digital wallets and mobile payments initiatives by country are also included, along with notable trends.
Note: This article has been compiled using detail information adapted from individual country profiles and from the European Overview section of the European Payment Card Yearbook 2018-19.
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