South Africa’s Cards and Payments Industry: Emerging Opportunities, Trends, Size, Drivers, Strategies, Products and Competitive Landscape

The South African card payments channel registered growth during the review period (2009–2013). The number of cards in circulation recorded a review-period CAGR of 17.60%. The country’s positive economic outlook, the demand for more sophisticated prepaid and charge card products and the growth of online shopping supported the growth of the card payments channel. Over the forecast period (2014−2018), the channel is expected to increase at a CAGR of 7.60%, as consumers move away from cash payments. During the review period, the South African card payments channel grew in both volume and value terms. In terms of the volume of cards in circulation, debit cards accounted for the largest channel share of 58.0% in 2013, followed by prepaid cards with 26.0%. The main contributor to the growth of prepaid cards was a rise in demand for open-loop prepaid cards among the unbanked population. Technological developments were a key factor in the growth of the card payments channel in South Africa during the review period. Mini automatic teller machines (ATMs) were introduced by First National Bank, while mobile ATMs and wireless point of sale (POS) terminals were introduced by other national and foreign banks. With the increasing adoption of smartphones, handset manufacturers are promoting near-field communication (NFC) technology. However, retailers and banks in South Africa require clearly defined security benefits and cost-reductions before they will adopt NFC on a large scale.

Scope

• This report provides a comprehensive analysis of South Africa's cards and payments industry.

• It provides current values for South Africa's cards and payments industry for 2013, and forecast figures for the period up to 2018.

• It details the different economic, infrastructural and business drivers affecting South Africa's cards and payments industry.

• It outlines the current regulatory framework in the industry.

• It details the marketing strategies used by various banks and other institutions.

• It profiles the major banks in South Africa's cards and payments industry.

Key Highlights

• The South African card payments channel registered growth during the review period (2009–2013). The number of cards in circulation recorded a review-period CAGR of 17.60%. The country’s positive economic outlook, the demand for more sophisticated prepaid and charge card products and the growth of online shopping supported the growth of the card payments channel.

• In value terms, the card payments channel grew from ZAR856.6 billion (US$101.5 billion) in 2009 to ZAR1.4 trillion (US$140.5 billion) in 2013, at a CAGR of 12.07%. The card payments channel is expected to reach ZAR1.9 trillion (US$162.6 billion) in 2018, representative of a forecast-period CAGR of 7.07%. Growth is expected to be driven by demand for prepaid cards, regulatory improvements, and electronic and mobile commerce (e-commerce and m-commerce).

• Technological developments were a key factor in the growth of the card payments channel in South Africa during the review period. Mini automatic teller machines (ATMs) were introduced by First National Bank, while mobile ATMs and wireless point of sale (POS) terminals were introduced by other national and foreign banks.

• Banks are segmenting their customer base in order to maximize the potential of expanding their shares in each category. Banks such as First National Bank and Standard Bank of South Africa launched credit cards specifically targeted at students. Banks established a range of corporate cards designed to meet the specific needs of business houses. Absa Bank offers the Procurement Management card for the management of end-to-end procurement activity.

• With the increasing adoption of smartphones, handset manufacturers are promoting near field communication (NFC) technology. However, retailers and banks in South Africa require clearly defined security benefits and cost-reductions before they will adopt NFC on a large scale.

Reasons to buy

• Make strategic business decisions using top-level historic and forecast market data related to South Africa's cards and payments industry and each market within it.

• Understand the key market trends and growth opportunities within South Africa's cards and payments industry.

• Assess the competitive dynamics in South Africa's cards and payments industry.

• Gain insights in to the marketing strategies used for selling various card types in South Africa.

• Gain insights into key regulations governing South Africa's cards and payments industry.

Companies mentioned

First National Bank

Standard Bank of South Africa

Nedbank

Absa Bank

African Bank

MasterCard

Visa

American Express

Diners Club

Table of Contents

1 Executive Summary

2 Analysis of Market Environment, Key Trends and Drivers

2.1 Payment Infrastructure and Emerging Technologies

2.1.1 Automatic teller machines (ATMs)

2.1.2 Point of sale (POS) terminals

2.1.3 NFC and contactless payments

2.1.4 Internet penetration

2.1.5 Introduction of mini-ATMs, mobile ATMs and wireless POS

2.1.6 Mobile payments

2.2 Business Drivers

2.2.1 Growth in retail industry

2.2.2 Increasing focus on social media to understand consumer behavior

2.3 Economic Drivers

2.3.1 Stable GDP

2.3.2 Inflation

2.3.3 GDP per capita

3 Cards and Payments Industry Share Analysis

3.1 Industry Overview

3.1.1 Cash

3.1.2 Checks

3.1.3 Card payments

3.1.4 Credit transfer

3.1.5 Direct debit

4 Regulatory Framework and Card Fraud Statistics

4.1 Regulatory Framework

4.1.1 National Credit Act

4.1.2 Anti-money laundering (AML) measures

4.1.3 Foreign direct investment (FDI) regulations

4.2 Card Fraud Statistics

4.2.1 Card-not-present fraud

4.2.2 Counterfeit cards

4.2.3 Card ID theft

4.2.4 Cards lost or stolen

5 Emerging Consumer Attitudes and Trends

5.1 Industry Segmentation and Targeting

5.1.1 Retail segment

5.1.2 Corporate segment

5.2 Travel and Tourism Spending

5.2.1 Outbound tourist trips

5.2.2 Outbound tourist spending

5.3 Retail Card Spending

5.3.1 Analysis by product categories

5.3.2 Analysis by retail channels

6 Analysis of Card Payments and Growth Prospects

6.1 Channel Share Analysis by Card Category

6.2 Size and Forecast of the Card Payments Channel

6.2.1 Analysis by number of cards in circulation

6.2.2 Analysis by transaction value

7 Analysis of Credit Card Payments and Growth Prospects

7.1 Overall Category Size and Forecast

7.1.1 Analysis by number of cards in circulation

7.1.2 Analysis by transaction value

7.1.3 Analysis by transaction volume

7.2 Transaction Share Analysis by Channel

7.2.1 Analysis by transaction value

7.2.2 Analysis by transaction volume

7.3 Personal Credit Cards Sub-Category Size and Forecast

7.3.1 Analysis by number of cards in circulation

7.3.2 Analysis by transaction value

7.3.3 Analysis by transaction volume

7.4 Commercial Credit Cards Sub-Category Size and Forecast

7.4.1 Analysis by number of cards in circulation

7.4.2 Analysis by transaction value

7.4.3 Analysis by transaction volume

7.5 Competitive Landscape

7.5.1 Scheme share analysis

7.5.2 Issuer share analysis

8 Analysis of Debit Card Payments and Growth Prospects

8.1 Overall Category Size and Forecast

8.1.1 Analysis by number of cards in circulation

8.1.2 Analysis by transaction value

8.1.3 Analysis by transaction volume

8.2 Transaction Share Analysis by Channel

8.2.1 Analysis by transaction value

8.2.2 Analysis by transaction volume

8.3 Competitive Landscape

8.3.1 Scheme share analysis

8.3.2 Issuer share analysis

9 Analysis of Charge Card Payments and Growth Prospects

9.1 Overall Category Size and Forecast

9.1.1 Analysis by number of cards in circulation

9.1.2 Analysis by transaction value

9.1.3 Analysis by transaction volume

9.2 Transaction Share Analysis by Channel

9.2.1 Analysis by transaction value

9.2.2 Analysis by transaction volume

9.3 Personal Charge Cards Category Size and Forecast

9.3.1 Analysis by number of cards in circulation

9.3.2 Analysis by transaction value

9.3.3 Analysis by transaction volume

9.4 Commercial Charge Cards Sub-Category Size and Forecast

9.4.1 Analysis by number of cards in circulation

9.4.2 Analysis by transaction value

9.4.3 Analysis by transaction volume

9.5 Competitive Landscape

9.5.1 Scheme share analysis

9.5.2 Issuer share analysis

10 Analysis of Prepaid Card Payments and Growth Prospects

10.1 Overall Category Size and Forecast

10.1.1 Analysis by number of cards in circulation

10.1.2 Analysis by transaction value

10.2 Open-Loop Prepaid Cards Segment Size and Forecast

10.2.1 Analysis by number of cards in circulation

10.2.2 Analysis by transaction value

10.3 Closed-Loop Prepaid Cards Segment Size and Forecast

10.3.1 Analysis by number of cards in circulation

10.3.2 Analysis by transaction value

11 Merchant Acquiring

11.1 Merchant Acquirers in South Africa

12 Company Profiles of Card Issuers

12.1 First National Bank

12.1.1 Key financials

12.1.2 Card portfolio

12.1.3 Strategies

12.2 Standard Bank of South Africa

12.2.1 Key financials

12.2.2 Card portfolio

12.2.3 Strategies

12.3 Nedbank

12.3.1 Key financials

12.3.2 Card portfolio

12.3.3 Strategies

12.4 Absa Bank

12.4.1 Key financials

12.4.2 Card portfolio

12.4.3 Strategies

12.5 African Bank

12.5.1 Card portfolio

12.5.2 Strategies

13 Appendix

13.1 Methodology

13.2 Contact GlobalData

13.3 About GlobalData

13.4 GlobalData’s Services

13.5 Definitions

13.6 Disclaimer

List of Tables

Table 1: South African Payment Channels (ZAR Billion), 2009–2013

Table 2: South African Card Fraud (ZAR Million), 2009–2013

Table 3: Student Cards Offered in South Africa

Table 4: Cards Offered to South Africa’s Outbound Leisure Tourists

Table 5: Cards Offered to South Africa’s HNWIs

Table 6: Cards Offered to South Africa’s Vehicle Owners

Table 7: Credit Cards for Customers based on Income Level and Age

Table 8: Banks Offering Cards Supporting Charitable Activities in South Africa

Table 9: Purchasing Cards in South Africa

Table 10: Corporate Cards in South Africa

Table 11: Consumer Card Spending Product Category in South Africa (ZAR Million), 2012

Table 12: South African Consumer Card Spending by Retail Channel (ZAR Million), 2008–2012

Table 13: South African Card Payments Channel by Card Category (Million), 2009–2018

Table 14: South African Card Payments Channel Size by Volume of Cards (Million), 2009–2018

Table 15: South African Card Payments Channel Size by Transaction Value (ZAR Billion), 2009–2018

Table 16: South African Card Payments Channel Size by Transaction Value (US$ Billion), 2009–2018

Table 17: South African Credit Cards Category Size by Volume of Cards (Million), 20098–2018

Table 18: South African Credit Cards Category Size by Transaction Value (ZAR Billion), 2009–2018

Table 19: South African Credit Cards Category Size by Transaction Value (US$ Billion), 2009–2018

Table 20: South African Credit Cards Category Size by Transaction Volume (Million), ), 2009–2018

Table 21: South African Personal Credit Cards Sub-Category Size by Volume of Cards (Million), 2009–2018

Table 22: South African Personal Credit Cards Sub-Category Size by Transaction Value (ZAR Billion), 2009–2018

Table 23: South African Personal Credit Cards Sub-Category Size by Transaction Value (US$ Billion), 2009–2018

Table 24: South African Personal Credit Cards Sub-Category Size by Transaction Volume (Million), 2009–2018

Table 25: South African Commercial Credit Cards Sub-Category Size by Number of Cards (Thousand), 2009–2018

Table 26: South African Commercial Credit Cards Sub-Category Size by Transaction Value (ZAR Billion), 2009–2018

Table 27: South African Commercial Credit Cards Sub-Category Size by Transaction Value (US$ Million), 2009–2018

Table 28: South Africa Commercial Credit Cards Sub-Category Size by Transaction Volume (Million), 2009–2018

Table 29: South African Debit Cards Category Size by Number of Cards (Million), 2009–2018

Table 30: South African Debit Cards Category Size by Transaction Value (ZAR Billion), 2009–2018

Table 31: South African Debit Cards Category Size by Transaction Value (US$ Billion), 2009–2018

Table 32: South African Debit Cards Category Size by Transaction Volume (Billion), 2009–2018

Table 33: South African Charge Cards Category Size by Number of Cards (Thousand), 2009–2018

Table 34: South African Charge Cards Category Size by Transaction Value (ZAR Million), 2009–2018

Table 35: South African Charge Cards Category Size by Transaction Value (US$ Million), 2009–2018

Table 36: South African Charge Cards Category Size by Transaction Volume (Million), 2009–2018

Table 37: South African Personal Charge Cards Sub-Category Size by Number of Cards (Thousand), 2009–2018

Table 38: South African Personal Charge Cards Sub-Category Size by Transaction Value (ZAR Billion), 2009–2018

Table 39: South African Personal Charge Cards Sub-Category Size by Transaction Value (US$ Million), 2009–2018

Table 40: South African Personal Charge Cards Sub-Category Size by Transaction Volume (Million), 2009–2018

Table 41: South African Commercial Charge Cards Sub-Category Size by Number of Cards (Thousand), 2009–2018

Table 42: South African Commercial Charge Cards Sub-Category Size by Transaction Value (ZAR Billion), 2009–2018

Table 43: South African Commercial Charge Cards Sub-Category Size by Transaction Value (US$ Million), 2009–2018

Table 44: South African Commercial Charge Cards Sub-Category Size by Transaction Volume (Million), 2009–2018

Table 45: South African Prepaid Cards Category Size by Number of Cards (Million), 2009–2018

Table 46: South African Prepaid Cards Category Size by Transaction Value (ZAR Billion), 2009–2018

Table 47: South African Prepaid Cards Category Size by Transaction Value (US$ Billion), 2009–2018

Table 48: South African Open-Loop Prepaid Cards Segment Size by Number of Cards (Million), 2009–2018

Table 49: South African Open-Loop Prepaid Cards Segment Size by Transaction Value (ZAR Billion), 2009–2018

Table 50: South African Open-Loop Prepaid Cards Segment Size by Transaction Value (US$ Million), 2009–2018

Table 51: South African Closed-Loop Prepaid Cards Segment Size by Number of Cards (Million), 2009–2018

Table 52: South African Closed-Loop Prepaid Cards Segment Size by Transaction Value (ZAR Billion), 2009–2018

Table 53: South African Closed-Loop Prepaid Cards Segment Size by Transaction Value (US$ Million), 2009–2018

Table 54: FirstRand Bank Ltd – Key Financial Indicators (ZAR Million), Year Ended June, 2012–2013

Table 55: First National Bank – Card Portfolio and Key Features

Table 56: Standard Bank of South Africa Group – Key Financial Indicators (ZAR Million), 2011–2012

Table 57: Standard Bank of South Africa – Card Portfolio and Key Features

Table 58: Nedbank – Key Financial Indicators (ZAR Million), 2011–2012

Table 59: Nedbank – Card Portfolio and Key Features

Table 60: Absa Bank – Key Financial Indicators (ZAR Million), 2011–2012

Table 61: Absa Bank – Card Portfolio and Key Features

Table 62: African Bank – Card Portfolio and Key Features

Table 63: Key Definitions

List of Figures

Figure 1: Benchmarking the South African Card Payments Channel Against Other Large Markets in the Region

Figure 2: South Africa – Growth of Various Card Categories (%), 2009–2018

Figure 3: ATMs Penetration in South Africa, 2009–2018

Figure 4: POS Terminals Penetration in South Africa, 2009–2018

Figure 5: South Africa – Internet Users per 100 Inhabitants, 2009–2013

Figure 6: South African Value of M-Payments Growth (ZAR Million), 2009–2018

Figure 7: Value of Retail Sales in South Africa (ZAR Billion), 2009–2018

Figure 8: Real GDP Growth in South Africa (Percentage Change), 2009–2018

Figure 9: Inflation Rates in South Africa (%), 2009–2018

Figure 10: Nominal GDP per Capita in South Africa (US$), 2009–2018

Figure 11: Shares of Different Payment Channels in South Africa (%), 2009 and 2013

Figure 12: South African Card Fraud (ZAR Million), 2009 and 2013

Figure 13: South African Card-not-Present Fraud Value (ZAR Million), 2009–2013

Figure 14: South African Counterfeit Cards Fraud Value (ZAR Million), 2009–2013

Figure 15: South African Card ID Theft Fraud Value (ZAR Million), 2009–2013

Figure 16: South African Lost or Stolen Cards Fraud Value (ZAR Million), 2009–2013

Figure 17: South African Cards and Payments Industry Segmentation by Card Type

Figure 18: South African Outbound Tourist Trips (Thousand), 2009–2018

Figure 19: South African Outbound Tourists Spending (ZAR Billion), 2009–2018

Figure 20: Retail Consumer Card Spending by Product Category in South Africa (%), 2012

Figure 21: Retail Consumer Card Spending by Retail Channel in South Africa (%), 2012

Figure 22: South African Card Payments Channel by Card Category (%), 2009–2018

Figure 23: South African Card Payments Channel Size by Volume of Cards (Million), 2009–2018

Figure 24: South African Card Payments Channel Size by Transaction Value (ZAR Billion), 2009–2018

Figure 25: South African Credit Card Volume And Penetration, 2009–2018

Figure 26: South African Credit Cards Category Size by Volume of Cards (Million), 2009–2018

Figure 27: South African Credit Cards Category Size by Transaction Value (ZAR Billion), 2009–2018

Figure 28: South African Credit Card Category Size by Transaction Volume (Million), ), 2009–2018

Figure 29: South African Credit Card Transactions Value by Channel (ZAR Billion), 2009–2018

Figure 30: South African Credit Card Transaction Volume by Channel (Million), 2009–2018

Figure 31: South African Personal Credit Cards Sub-Category Size by Volume of Cards (Million), 2009–2018

Figure 32: South African Personal Credit Cards Sub-Category Size by Transaction Value (ZAR Billion), 2009–2018

Figure 33: South African Personal Credit Cards Sub-Category Size by Transaction Volume (Million), 2009–2018

Figure 34: South African Commercial Credit Cards Sub-Category Size by Number of Cards (Thousand), 2009–2018

Figure 35: South African Commercial Credit Cards Sub-Category Size by Transaction Value (ZAR Billion), 2009–2018

Figure 36: South Africa Commercial Credit Cards Sub-Category Size by Transaction Volume (Million), 2009–2018

Figure 37: South African Credit Cards Category Share by Scheme (%), 2013

Figure 38: South African Credit Cards Category Share by Issuer (%), 2013

Figure 39: South African Debit Card Volume and Penetration, 2009–2018

Figure 40: South African Debit Cards Category Size by Number of Cards (Million), 2009–2018

Figure 41: South African Debit Cards Category Size by Transaction Value (ZAR Billion), 2009–2018

Figure 42: South African Debit Cards Category Size by Transaction Volume (Billion), 2009–2018

Figure 43: South African Debit Cards Transaction Value by Channel (ZAR Billion), 2009–2018

Figure 44: South African Debit Cards Transaction Volume by Channel (Billion), 2009–2018

Figure 45: South African Debit Cards Category Share by Scheme (%), 2013

Figure 46: South African Debit Cards Category Share by Issuer (%), 2013

Figure 47: South African Charge Card Volume and Penetration (Thousand), 2009–2018

Figure 48: South African Charge Cards Category Size by Number of Cards (Thousand), 2009–2018

Figure 49: South African Charge Cards Category Size by Transaction Value (ZAR Million), 2009–2018

Figure 50: South African Charge Cards Category Size by Transaction Volume (Million), 2009–2018

Figure 51: South African Charge Cards Transaction Value by Channel (ZAR Million), 2009–2018

Figure 52: South African Charge Cards Transaction Volume by Channel (Million), 2009–2018

Figure 53: South African Personal Charge Cards Sub-Category Size by Number of Cards (Thousand), 2009–2018

Figure 54: South African Personal Charge Cards Sub-Category Size by Transaction Value (ZAR Billion), 2009–2018

Figure 55: South African Personal Charge Cards Sub-Category Size by Transaction Volume (Million), 2009–2018

Figure 56: South African Commercial Charge Cards Sub-Category Size by Number of Cards (Thousand), 2009–2018

Figure 57: South African Commercial Charge Cards Sub-Category Size by Transaction Value (ZAR Million), 2009–2018

Figure 58: South African Commercial Charge Cards Sub-Category Size by Transaction Volume (Million), 2009–2018

Figure 59: South African Charge Cards Category Share by Scheme (%), 2013

Figure 60: South African Charge Cards Category Share by Issuer (%), 2013

Figure 61: South African Prepaid Card Volume and Penetration, 2009–2018

Figure 62: South African Prepaid Cards Category Size by Number of Cards (Million), 2009–2018

Figure 63: South African Prepaid Cards Category Size by Transaction Value (ZAR Billion), 2009–2018

Figure 64: South African Open-Loop Prepaid Cards Segment Size by Number of Cards (Million), 2009–2018

Figure 65: South African Open-Loop Prepaid Cards Segment Size by Transaction Value (ZAR Billion), 2009–2018

Figure 66: South African Closed-Loop Prepaid Cards Segment Size by Number of Cards (Million), 2009–2018

Figure 67: South African Closed-Loop Prepaid Cards Segment Size by Transaction Value (ZAR Billion), 2009–2018

Figure 68: Merchant Acquirer Market Share in South Africa (%), 2013

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