Payment cards at the point of sale (POS) and online showed solid growth rates in most European countries in 2014, supported by the roll-out of contactless technology. The challenges for the industry as a whole are the downward pressure on interchange fees and growing fraud losses.
Cards in issue and card payments by volume and by value showed significant rates of growth once again across the 33 countries covered in the Yearbook. In particular, POS payments showed further significant growth, while cash withdrawals grew slightly. By the end of 2014, card payments by volume accounted for 48.51% of the cashless payments in the region, up from 45.83% in the previous year.
Cards and card use in Europe
In the European countries covered in the Yearbook (E33), there were 966.8 million cards in circulation at the end of 2014, up 1.7% from 951.0 million in 2013. The number of cards per capita was 1.50 on average in the EU28 countries and 1.59 in the E33 countries, but card holding varies significantly between countries, ranging from a low of 0.72 in Romania to a high of 3.80 in Luxembourg. In 2014, 69.3% of all bank-issued cards were debit cards.
In 2014, there were 53.78 billion card payments in the E33 countries, a growth of 8.8%. There were 88.4 payments per capita on average, ranging from 8.0 in Greece and 9.0 in Bulgaria to an exceptionally high 375.5 in Iceland and 353.8 in Norway. Additionally, remote payments on the internet and payments initiated from mobile devices grew by more than 10% and 20% respectively in 2014.
The value of card payments across the E33 countries grew by 8.0% to €2,654.7 billion at the end of 2014, up by 45.0% on 2009. The average transaction value (ATV) was €49.36, down from €49.72 in 2013, probably as a result of contactless cards being used more frequently for lower value payments.
Across the E33 countries, notable market trends include:
• Card payments by volume and value between 2009 and 2014 continued to grow higher than the compound annual growth rate (CAGR)
• Contactless cards and payments are the new normal in Europe and gained significant traction in 2014
• Digital payments are continuing to grow, spurred by the launch of digital wallets, such as MasterPass by MasterCard, and mobile HCE NFC payment pilots combining card credentials stored in the cloud with tokenisation
• Downward pressure on card issuers following the Interchange Fee Regulation (IFR) effective 9 December 2015
Debit cards
In 2014, the region’s total debit card base grew by 5.5 million cards to 669.8 million, with around 1.10 debit cards per capita. 10 countries recorded a decline in the total number of debit cards, with the greatest declines in Greece (-36.0%), Bulgaria (-9.3%) and Spain (-7.8%). These declines were partly due to consolidation of card portfolios and changes in statistical reporting. For example, in Germany, ELV direct debits are now excluded from the debit card total.
Payments on debit cards were 42.9 billion in 2014 (+9.4% on 2013). All the major developed markets continued to show significant growth in payment volumes compared with 2013. The only exception was Germany, where direct debits (ELV) were no longer reported as debit card payments.
Leading markets such as the UK and France accounted for 19.7 billion debit card payments in 2014, an impressive 45.9% of the regional total.
Notable trends include:
• Moneo prepaid cards have replaced the electronic purse Moneo in France
• Capped bilateral interchange arrangements instead of multi-lateral domestic scheme interchange fees apply from the end of 2015
Credit/delayed debit cards
The total credit/delayed debit card base grew to 300.3 million in 2014, up by 7.7 million (+2.6%) on 2013. There were around 0.49 credit cards per capita in the E33 countries. The decline in credit/delayed debit cards across 8 countries is likely to be due in part to changes in statistical reporting, which were aligned with the new European Central Bank (ECB) statistical standard.
There were 10.9 billion credit/delayed debit card payments in 2014 (+6.2%). Although credit/delayed debit card volumes have been growing healthily (37.1% over the last 5 years), these rates of growth are outpaced by those on debit card volumes (56.4%). 6 countries – Belgium, Croatia, Cyprus, Finland, Ireland and Portugal – actually recorded a fall in the number of payments on credit/delayed debit cards in 2014.
The value of payments on credit/delayed debit cards was €748.3 billion in 2014 (+9.0% on 2013). The value of such payments fell in Belgium, Cyprus, Finland, Ireland, Portugal, Serbia, Slovenia and Turkey.
Notable domestic card trends include:
• Most cards of the remaining domestic credit card schemes are co-badged with an international card brand
• Domestic interchange fees for delayed debit/credit consumer cards were capped at 0.3% at the end of 2015
POS terminals and payments
In 2014, the POS terminal base grew across the E33 countries by 5.0% to 12.39 million, an advancement of 15.4% over the last 5 years (CAGR: 2.9%). The roll-out of contactless POS terminals and mPOS terminals has contributed to the growth in 2014.
Belgium (29.5%), Poland (22.0%) and Luxembourg (20.9%) reported POS terminal growth exceeding 20% in 2014. Conversely, Ireland (-61.9%), Greece (-53.3%), Finland (-19.9%) and Slovenia (-7.6%) had the largest declines year-on-year. Denmark and Iceland also reported declines.
Total POS payments by number amounted to 50.24 billion payments in 2014, up from 47.54 billion in 2013. The overall growth was 5.7% on 2013, which was lower than the CAGR of 7.4% over the last 5 years. There were 82.6 POS payments per capita per year (+5.3% on 2013) on average with a POS ATV of €49.19 across the EU28 countries.
POS payments per capita again ranged widely from 7.1 POS payments (Bulgaria) up to an extremely high 382.0 POS payments (Iceland) in 2014.
Notable trends include:
• 95.7% of all domestic POS payments on cards in Europe are now EMV transactions, according to the ECB
• The roll-out of contactless POS terminals continued as did tablet-based mPOS solutions
• The POS continued to be a testbed for new technologies, including QR-codes and Bluetooth Smart (BL E).
ATMs and cash withdrawals
The number of ATMs continued to grow slightly across the E33 countries covered in the Yearbook advancing to 454,459 ATMs (+0.5%), up 4.1% from 2009. The growth rate in 2014 was lower than the fairly low CAGR of 0.8% over the last 5 years. The number of cash withdrawals per ATM per month amounted to average 2,626.6 withdrawals (+3.7% on 2013).
As at the end of 2014, 20 countries reported declining ATM numbers, including Cyprus (-29.4%), Belgium (-26.9%) and Estonia (-12.5%). Those countries reporting a substantial growth of their ATM population include Ireland (+9.0%), Poland (+8.6%) and Turkey (+8.5%). The mid-term trend of declining ATM installations in Europe is likely due to bank mergers and the higher use of cards at POS and on the internet. In 2014, ATM density showed a wide range from 333.2 in a mature market such as Sweden to a high density of 1,410 in Portugal.
The total number of cash withdrawals across the E33 countries covered in the Yearbook showed an overall growth rate of 4.2% in 2014. This was higher than the compound annual growth rate of 1.7% over the last 5 years. The total of cash withdrawals in the E33 accounted for 14.32 billion withdrawals. In 2014, there were 23.6 withdrawals on cards per capita in the E33 region, ranging from 10.4 withdrawals in Serbia up to a high of 43.8 withdrawals in the UK.
Total cash withdrawals by value across the E33 countries showed an overall growth rate of 3.8% in 2014, which was higher than the compound annual growth rate of 2.8% between 2009 and 2014. The E33 total of cash withdrawals by value amounted to €1,665 billion (3.2% on 2013). The notable growth was influenced by the statistical effect of adding withdrawals from Austria and Germany that were not previously reported.
The ATV per cash withdrawal amounted to €114.04, slightly down from 2013. In 2014, the UK, France, and Germany accounted for 48.3% of total cash withdrawals by value, down from 59.4% in 2005.
Notable trends include:
• ATM terminals installed and cash withdrawals by volume and by value continued to decline in many countries
• Pilots of card-less ATM withdrawals initiated using mobile banking apps or biometric authentication
The European Payment CardsYearbook 2015-16
The latest edition of the European Payment Cards Yearbook 2015-16 is based on end-2014 payment industry figures. It reports recent card market developments and the latest card business trends. Rich statistical data is provided by country, including typical key performance indicators, documenting the growth of cards in issue and transactions by volume and by value.
Further information on leading issuers, acquirers and processors, on cards and remote payments via the internet, digital wallets and mobile payments initiatives by country are also included, along with notable trends.
Note: This article is compiled using detailed information adapted from individual country profiles and from the European Overview section of the European Payment Cards Yearbook 2015-16.
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