If anyone needed convincing that the
Central and Eastern European (CEE) region represents the future
growth hotspots for credit and debit cards, one only needs to look
at the numbers concerning card issuance and transaction volumes to
be certain.

CI’s analysis of the CEE card markets reveals
that despite the credit crunch-related hangover that has afflicted
spending volumes and bank lending over the past two years, the CEE
region on the whole is continuing to embrace payment cards with
enthusiasm.

Credit gains ground in Eastern
Europe

Not surprisingly, credit card
issuance numbers continue to suffer from sluggish growth rates in
the more saturated Western European markets.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

View profiles in store

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData

Submit

UK USA Afghanistan Åland Islands Albania Algeria American Samoa Andorra Angola Anguilla Antarctica Antigua and Barbuda Argentina Armenia Aruba Australia Austria Azerbaijan Bahamas Bahrain Bangladesh Barbados Belarus Belgium Belize Benin Bermuda Bhutan Bolivia Bonaire, Sint Eustatius and Saba Bosnia and Herzegovina Botswana Bouvet Island Brazil British Indian Ocean Territory Brunei Darussalam Bulgaria Burkina Faso Burundi Cambodia Cameroon Canada Cape Verde Cayman Islands Central African Republic Chad Chile China Christmas Island Cocos Islands Colombia Comoros Congo Democratic Republic of the Congo Cook Islands Costa Rica Côte d"Ivoire Croatia Cuba Curaçao Cyprus Czech Republic Denmark Djibouti Dominica Dominican Republic Ecuador Egypt El Salvador Equatorial Guinea Eritrea Estonia Ethiopia Falkland Islands Faroe Islands Fiji Finland France French Guiana French Polynesia French Southern Territories Gabon Gambia Georgia Germany Ghana Gibraltar Greece Greenland Grenada Guadeloupe Guam Guatemala Guernsey Guinea Guinea-Bissau Guyana Haiti Heard Island and McDonald Islands Holy See Honduras Hong Kong Hungary Iceland India Indonesia Iran Iraq Ireland Isle of Man Israel Italy Jamaica Japan Jersey Jordan Kazakhstan Kenya Kiribati North Korea South Korea Kuwait Kyrgyzstan Lao Latvia Lebanon Lesotho Liberia Libyan Arab Jamahiriya Liechtenstein Lithuania Luxembourg Macao Macedonia, The Former Yugoslav Republic of Madagascar Malawi Malaysia Maldives Mali Malta Marshall Islands Martinique Mauritania Mauritius Mayotte Mexico Micronesia Moldova Monaco Mongolia Montenegro Montserrat Morocco Mozambique Myanmar Namibia Nauru Nepal Netherlands New Caledonia New Zealand Nicaragua Niger Nigeria Niue Norfolk Island Northern Mariana Islands Norway Oman Pakistan Palau Palestinian Territory Panama Papua New Guinea Paraguay Peru Philippines Pitcairn Poland Portugal Puerto Rico Qatar Réunion Romania Russian Federation Rwanda Saint Helena, Ascension and Tristan da Cunha Saint Kitts and Nevis Saint Lucia Saint Pierre and Miquelon Saint Vincent and The Grenadines Samoa San Marino Sao Tome and Principe Saudi Arabia Senegal Serbia Seychelles Sierra Leone Singapore Slovakia Slovenia Solomon Islands Somalia South Africa South Georgia and The South Sandwich Islands Spain Sri Lanka Sudan Suriname Svalbard and Jan Mayen Swaziland Sweden Switzerland Syrian Arab Republic Taiwan Tajikistan Tanzania Thailand Timor-Leste Togo Tokelau Tonga Trinidad and Tobago Tunisia Turkey Turkmenistan Turks and Caicos Islands Tuvalu Uganda Ukraine United Arab Emirates US Minor Outlying Islands Uruguay Uzbekistan Vanuatu Venezuela Vietnam British Virgin Islands US Virgin Islands Wallis and Futuna Western Sahara Yemen Zambia Zimbabwe Kosovo

Industry * Academia & Education Aerospace, Defense & Security Agriculture Asset Management Automotive Banking & Payments Chemicals Construction Consumer Foodservice Government, trade bodies and NGOs Health & Fitness Hospitals & Healthcare HR, Staffing & Recruitment Insurance Investment Banking Legal Services Management Consulting Marketing & Advertising Media & Publishing Medical Devices Mining Oil & Gas Packaging Pharmaceuticals Power & Utilities Private Equity Real Estate Retail Sport Technology Telecom Transportation & Logistics Travel, Tourism & Hospitality Venture Capital

Tick here to opt out of curated industry news, reports, and event updates from Electronic Payments International.

Submit and download

Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

There are two main factors for this: one being
the hangover from the credit crunch and financial turbulence of the
last two years continuing to act as a brake on consumer credit
spending and bank lending; and the other being that in heavily
saturated markets such as the UK, issuers on the whole have moved
away from mass-market customer recruitment programmes and are
concentrating on recruitment in niche consumer segments such as the
affluent or high net worth segments.

The picture could not be more different in
parts of Central and Eastern Europe. Poland is the stand-out credit
card hotspot, judging by the high double-digit growth rates for
credit card issuance, and it remains by far the largest credit card
market in the CEE region.

From just 2.8 million credit cards in 2004,
numbers had risen to more than 9.4 million by the end of 2008. To a
lesser degree, smaller CEE countries such as Romania and the Czech
Republic are also hotspots for credit card growth. Bulgaria is also
proving to be a popular growth market. From just over 110,000
credit cards in circulation in 2004, this figure had risen to 1.2
million by the end of 2008.

In terms of credit card transactions,
double-digit growth rates are the norm – only slightly dampened in
2008 as a result of economic turbulence that began in 2007.

Although Poland is by far the largest market
in terms of credit card transaction value (€5.2 billion [$7.2
billion] in 2008), Bulgaria and Romania have seen meteoric rises in
credit card transaction value between 2006 to 2008, with Bulgaria
enjoying a phenomenal growth rate of 170.84 percent in 2007 for
total value of €284 million.

Debit continues to
dominate

However, it is debit that is the
dominant payment card in the CEE region, not surprisingly given
these countries’ historical dependence on cash and domestic ATM
cards.

Cash withdrawals continue to form the bulk of
debit card transactions in the CEE region, although there are
promising signs that CEE consumers are becoming more sophisticated
and educated and are using debit at the POS in ever-greater
numbers.

In terms of card numbers, again Poland is the
largest market, with 20.5 million debit cards in circulation as of
2008, a rise of nearly 50 percent compared to the previous year,
while Romania has also seen a spike in debit card issuance, from
5.5 million debit cards in 2004 to 14.5 million in 2008.

Bulgaria is also ramping up debit card
issuance, with 6.9 million in issue as of 2008, a rise of over 13
percent compared to 2007.

When it comes to debit card transaction value,
the Baltic states of Estonia, Latvia and Lithuania appear to now be
on a gentle downward decline, indicating that banks these markets
are near to or have passed the tipping point in terms of getting
international debit cards into the hands of consumers, with the job
now being to get these cards activated and used at the POS.

Activation and POS usage
education

However impressive these growth
rates are, they need to be tempered by the fact that activation and
usage of both debit and credit cards falls way behind more
developed card markets.

Although rates of credit card activation vary
from country to country, the problem is a common one. Banks in
these markets need to be much more proactive in getting consumers
educated about the benefits of credit cards compared to other
payment mechanisms.

As an example, a look at Estonia’s card market
shows while banks may have been successful in rolling out payment
cards to customers, this was not matched with an effort to get
customers to activate those cards.

In 2004, 21.2 percent of all cards were
inactive, and this figure actually rose to a high of 35.9 percent
of all cards by mid-2008, at the same time that card issuance in
the country was accelerated.

It is credit cards which suffer the most from
not being activated, which is not surprising given that consumers
have much more of an incentive to activate their debit cards given
that it is their primary way of accessing cash.

As of 2004, around 39 percent of all credit
cards in Estonia were inactive, rising to a high of 53 percent in
mid-2008 before falling back to 44.4 percent at the end of that
year.

Cash withdrawals and POS
usage

Cash withdrawals remain the most
common payment card transaction across the CEE region, although
some markets are making more progress than others in pushing
consumers towards the POS instead of the ATM.

In terms of average POS transaction value per
card, the region as a whole is very much on an upwards trajectory,
which is encouraging for issuers and payment networks as it
illustrates the fact that consumers across the region are
increasingly making a greater proportion of payments at the
POS.

However, in terms of cash withdrawals, the CEE
region card markets have in common large average transaction
values, indicating that it will be some time before consumers in
these markets ditch their cash addiction.

CI’s analysis shows that in terms of average
value per card at the POS, the region as a whole is on the upswing,
with Estonia and Hungary having the largest average values with
€1,385.43 and €1,150.89 respectively.

The period between 2006 and 2007 saw the
highest growth rates for average POS transaction value, with
Romania and Slovakia enjoying growth rates of over 60 percent in
that period.

However, both of these countries also have the
lowest average POS transaction values, at €189.29 and €411.58
respectively for 2008. The period between 2007 and 2008 saw growth
rates subside a little into the low double-digit range as a result
of the economic turbulence which affected credit card spending
across Europe.

In terms of cash withdrawals, average values
per card far surpass those in Western European markets. In 2008,
the Czech Republic had the highest average cash withdrawal per
card, at €2447.23, while Bulgaria’s was the lowest at €717.40.

However, growth rates for average cash
withdrawals per card are generally on the decline across the
region, falling to the low-to-mid single digit range in most of the
countries listed – which indicates that more and more transactions
are taking place at the POS and not the ATM, which is good news for
issuers and payment networks.