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

Ukraine’s economy was deeply impacted by the 2008–2009 global economic crises, and saw demand decrease for its steel and chemical exports. In August 2010, Ukraine entered into an agreement with the International Monetary Fund (IMF) for US$15.1 billion to generate economic growth path and revive its beleaguered banking sector. GDP growth resumed from 2010 onwards, reaching a peak of 5.11% in 2011.

A lack of government enthusiasm in implementing key reforms in the energy sector caused the IMF program to stall in 2011; as a result, real GDP growth fell to 0.3% in 2013. This led to a decrease in foreign exchange reserves in 2013, with fears of a sovereign debt default in 2014. In March 2014, the European Union (EU) and IMF announced bail-out packages worth EUR11.2 billion and US$14–18 billion respectively, to support Ukraine’s economy, although prospects over the forecast period (2014–2018) are uncertain due to the Crimean conflict.

The Ukrainian card payments channel grew at a healthy pace both in value and volume terms during the review period (2009–2013); the number of cards in circulation in the channel grew from 29.7 million in 2009 to 35.7 million in 2013, at a compound annual growth rate (CAGR) of 4.76%, and is anticipated to further post a CAGR of 5.06% over the forecast period to reach 45.3 million in 2018.

In terms of transaction value, the card payments channel grew at a review-period CAGR of 27.25%. The card payments channel is forecast to increase at a forecast-period CAGR of 14.50%.

Many factors supported review-period growth, such as an increase in per capita income, payment infrastructure modernization, and the adoption of technologically advanced payment cards. The government supported modernization in the form of regulations in September 2010 requiring all companies selling goods and services to accept card payments; this contributed to growth in value terms during the review-period. Banks have also targeted corporate employees and opened salary accounts, leading to the issue of high volumes of debit cards.

Growing consumer demand has forced banks and issuing companies to introduce many variants of prepaid card to meet specific needs. PrivatBank and Prominvestbank offer the E Card and Visa Virtuon respectively, while Ukrsotsbank offers the Gift Card. Cards for specific purposes, such as public transport and online shopping, are slowly gaining importance in Ukraine.

Scope

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

• It provides current values for Ukraine's cards and payments industry for 2013, and forecast figures for 2018.

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

Key Highlights

• The Ukrainian card payments channel grew at a healthy pace both in value and volume terms during the review period (2009–2013); the number of cards in circulation in the channel grew from 29.7 million in 2009 to 35.7 million in 2013, at a compound annual growth rate (CAGR) of 4.76%, and is anticipated to further post a CAGR of 5.06% over the forecast period to reach 45.3 million in 2018.

• In terms of transaction value, the card payments channel grew at a review-period CAGR of 27.25%. The card payments channel is forecast to increase at a forecast-period CAGR of 14.50%.

• Many factors supported review-period growth, such as an increase in per capita income, payment infrastructure modernization, and the adoption of technologically advanced payment cards. The government supported modernization in the form of regulations in September 2010 mandating all companies selling goods and services to accept card payments, contributed to the growth in value terms during the review-period. Banks have also targeted corporate employees and opened salary accounts, leading to the issue of debit cards in high volume.

• The value of e-commerce increased at a review-period CAGR of 49.18%. Over the forecast period, e-commerce is expected to increase at a forecast-period CAGR of 32.21%. Outbound tourist spending increased at review-period CAGR of 11.51%, and is expected to rise over the forecast period at a CAGR of 8.12%.

• The growing popularity of contactless technology prompted banks in Ukraine to offer cards enabled with this technology. Card issuers have begun circulating contactless stickers which can be used to pay for purchases in large retail chains using mobile phones.

Reasons to buy

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

• Understand the key market trends and growth opportunities in Ukraine's cards and payments industry.

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

• Gain insights in to the marketing strategies used for various card types in Ukraine.

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

Companies mentioned

PrivatBank

Raiffeisen Bank Aval

Ukrsotsbank

Ukreximbank

Prominvestbank

Delta Bank

Nadra Bank

NSMEP

UkrKart

MasterCard

Visa

Table of Contents

1 Executive Summary

2 Analysis of Market Environment, Key Trends and Drivers

2.1 Payment Infrastructure and Emerging Technology

2.1.1 Rising internet penetration

2.1.2 Growing mobile payments

2.1.3 Automated teller machines (ATMs)

2.1.4 Point-of-sale (POS) terminals

2.1.5 Adoption of EMV infrastructure

2.2 Business Drivers

2.2.1 Growth in retail industry

2.2.2 Growth in e-commerce

2.3 Economic Drivers

2.3.1 GDP growth

2.3.2 GDP per capita

2.3.3 Inflation

3 Regulatory Framework and Card Fraud Statistics

3.1 Regulatory Framework

3.1.1 Overview

3.1.2 Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT)

3.1.3 Foreign direct investment (FDI) regulations

3.2 Card Fraud Statistics

3.2.1 Lost or stolen card fraud

3.2.2 Counterfeit card fraud

3.2.3 Card ID theft

3.2.4 Card-not-present fraud

4 Emerging Consumer Attitudes and Trends

4.1 Industry Segmentation and Targeting

4.1.1 Retail segment

4.1.2 Corporate segment

4.2 Travel and Tourism Spending

4.2.1 Outbound tourist trips

4.2.2 Outbound tourist spending

5 Analysis of Card Payments and Growth Prospects

5.1 Channel Share Analysis by Card Category

5.2 Size and Forecast of the Card Payments Channel

5.2.1 Analysis by number of cards in circulation

5.2.2 Analysis by transaction value

6 Analysis of Credit Card Payments and Growth Prospects

6.1 Overall Category Size and Forecast

6.1.1 Analysis by number of cards in circulation

6.1.2 Analysis by transaction value

6.1.3 Analysis by transaction volume

6.2 Transaction Share Analysis by Channel

6.2.1 Analysis by transaction value

6.2.2 Analysis by transaction volume

6.3 Personal Credit Cards Segment Size and Forecast

6.3.1 Analysis by number of cards in circulation

6.3.2 Analysis by transaction value

6.3.3 Analysis by transaction volume

6.4 Commercial Credit Cards Segment Size and Forecast

6.4.1 Analysis by number of cards in circulation

6.4.2 Analysis by transaction value

6.4.3 Analysis by transaction volume

6.5 Competitive Landscape

6.5.1 Scheme share analysis

6.5.2 Issuer share analysis

7 Analysis of Debit 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 Competitive Landscape

7.3.1 Scheme share analysis

7.3.2 Issuer share analysis

8 Analysis of Prepaid 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

8.2 Open-Loop Prepaid Cards Segment Size and Forecast

8.2.1 Analysis by number of cards in circulation

8.2.2 Analysis by transaction value

8.3 Closed-Loop Prepaid Cards Segment Size and Forecast

8.3.1 Analysis by number of cards in circulation

8.3.2 Analysis by transaction value

9 Merchant Acquiring

10 Company Profiles of Card Issuers

10.1 PrivatBank

10.1.1 Key financials

10.1.2 Card portfolio

10.1.3 Strategies

10.2 Raiffeisen Bank Aval

10.2.1 Key financials

10.2.2 Card portfolio

10.2.3 Strategies

10.3 Ukrsotsbank

10.3.1 Key financials

10.3.2 Card portfolio

10.3.3 Strategies

10.4 Ukreximbank

10.4.1 Key financials

10.4.2 Card portfolio

10.4.3 Strategies

10.5 Prominvestbank

10.5.1 Key financials

10.5.2 Card portfolio

10.5.3 Strategies

11 Appendix

11.1 Methodology

11.2 Contact GlobalData

11.3 About GlobalData

11.4 GlobalData's Services

11.5 Definitions

11.6 Disclaimer

List of Tables

Table 1: Ukraine – Market Entry Strategies of Foreign Banks

Table 2: Number of Banks with Foreign Capital in Ukraine, 2007-2011

Table 3: Ukraine – Card Fraud Value (UAH Million), 2009-2013

Table 4: Ukraine – Cards for High-Income Customers, 2014

Table 5: Ukraine – Cards for Online Shoppers, 2014

Table 6: Ukraine – Cards for Women, 2014

Table 7: Ukraine – Cards for Students and Young Population, 2014

Table 8: Ukraine – Cards for Corporate Customers, 2014

Table 9: Ukraine – Card Payments Channel by Card Category In Terms of Volume of Cards (Thousand), 2009-2018

Table 10: Ukraine – Card Payments Channel Size by Volume of Cards (Million), 2009-2018

Table 11: Ukraine – Card Payments Channel Size by Transaction Value (UAH Billion), 2009-2018

Table 12: Ukraine – Card Payments Channel Size by Transaction Value (US$ Billion), 2009-2018

Table 13: Ukraine – Credit Cards Category Size by Volume of Cards (Million), 2009-2018

Table 14: Ukraine – Credit Cards Category Size by Transaction Value (UAH Billion), 2009-2018

Table 15: Ukraine – Credit Cards Category Size by Transaction Value (US$ Billion), 2009-2018

Table 16: Ukraine – Credit Cards Category Size by Transaction Volume (Million), 2009-2018

Table 17: Ukraine – Personal Credit Cards Segment Size by Volume of Cards (Million), 2009-2018

Table 18: Ukraine – Personal Credit Cards Segment Size by Transaction Value (UAH Billion), 2009-2018

Table 19: Ukraine – Personal Credit Cards Segment Size by Transaction Value (US$ Billion), 2009-2018

Table 20: Ukraine – Personal Credit Cards Segment Size by Transaction Volume (Million), 2009-2018

Table 21: Ukraine – Commercial Credit Cards Segment Size by Volume of Cards (Thousand), 2009-2018

Table 22: Ukraine – Commercial Credit Cards Segment Size by Transaction Value (UAH Million), 2009-2018

Table 23: Ukraine – Commercial Credit Cards Segment Size by Transaction Value (US$ Million), 2009-2018

Table 24: Ukraine – Commercial Credit Cards Segment Size by Transaction Volume (Thousand), 2009-2018

Table 25: Ukraine – Debit Cards Category Size by Volume of Cards (Million), 2009-2018

Table 26: Ukraine – Debit Cards Category Size by Transaction Value (UAH Billion), 2009-2018

Table 27: Ukraine – Debit Cards Category Size by Transaction Value (US$ Billion), 2009-2018

Table 28: Ukraine – Debit Cards Category Size by Transaction Volume (Million), 2009-2018

Table 29: Ukraine – Prepaid Cards Category Size by Volume of Cards (Thousand), 2009-2018

Table 30: Ukraine – Prepaid Cards Category Size by Transaction Value (UAH Million), 2009-2018

Table 31: Ukraine – Prepaid Cards Category Size by Transaction Value (US$ Million), 2009-2018

Table 32: Ukraine – Open-Loop Prepaid Cards Segment Size by Volume of Cards (Thousand), 2009-2018

Table 33: Ukraine – Open-Loop Prepaid Cards Segment Size by Transaction Value (UAH Million), 2009-2018

Table 34: Ukraine – Open-Loop Prepaid Cards Segment Size by Transaction Value (US$ Thousand), 2009-2018

Table 35: Ukraine – Closed-Loop Prepaid Cards Segment Size by Volume of Cards (Thousand), 2009-2018

Table 36: Ukraine – Closed-Loop Prepaid Cards Segment Size by Transaction Value (UAH Million), 2009-2018

Table 37: Ukraine – Closed-Loop Prepaid Cards Segment Size by Transaction Value (US$ Million), 2009-2018

Table 38: PrivatBank – Key Financial Indicators (UAH Billion), Year Ending December, 2012-2013

Table 39: PrivatBank – Card Portfolio and Key Features

Table 40: Raiffeisen Bank Aval – Key Financial Indicators (UAH Billion), Year Ending December, 2012-2013

Table 41: Raiffeisen Bank Aval – Card Portfolio and Key Features

Table 42: Ukrsotsbank – Key Financial Indicators (UAH Million), Year Ending December, 2012-2013

Table 43: Ukrsotsbank – Card Portfolio and Key Features

Table 44: Ukreximbank – Key Financial Indicators (UAH Million), Year Ending December, 2012-2013

Table 45: Ukreximbank – Card Portfolio and Key Features

Table 46: Prominvestbank – Key Financial Indicators (US$ Million), Year Ending December, 2012-2013

Table 47: Prominvestbank – Card Portfolio and Key Features

Table 48: Key Definitions

List of Figures

Figure 1: Benchmarking the Ukrainian Card Payments Channel Against Other European Markets

Figure 2: Ukraine – Growth of Various Card Categories (%), 2009-2018

Figure 3: Ukraine – Internet Penetration, 2009-2018

Figure 4: Ukraine – Value of M-Payments (UAH Million), 2009-2018

Figure 5: Ukraine – ATM Volume and Penetration, 2009-2018

Figure 6: Ukraine – POS Volume and Penetration, 2009-2018

Figure 7: Ukraine – EMV Cards Volume (Million), 2009-2013

Figure 8: Ukraine – Retail Sales Value (UAH Billion), 2009-2018

Figure 9: Ukraine – E-Commerce Value (UAH Billion), 2009-2013

Figure 10: Ukraine – Real GDP Growth (%), 2009-2018

Figure 11: Ukraine – Nominal GDP Per Capita (US$), 2009-2018

Figure 12: Ukraine – Inflation (Consumer Price Inflation) Rate (%), 2009-2018

Figure 13: Ukraine – Share of Various Card Frauds In Terms of Transaction Value (%), 2009 and 2013

Figure 14: Ukraine – Lost or Stolen Card Fraud Value (UAH Million), 2009-2013

Figure 15: Ukraine – Counterfeit Card Fraud Value (UAH Million), 2009-2013

Figure 16: Ukraine – Card ID Theft Value (UAH Million), 2009-2013

Figure 17: Ukraine – Card-Not-Present Fraud Value (UAH Million), 2009-2013

Figure 18: Ukraine – Cards and Payments Industry Segmentation by Card Type

Figure 19: Ukraine – Volume of Outbound Tourist Trips (Thousand), 2009-2018

Figure 20: Ukraine – Outbound Tourist Spending (UAH Billion), 2009-2018

Figure 21: Ukraine – Card Payments Channel by Card Category In Terms of Volume of Cards (%), 2009-2018

Figure 22: Ukraine – Card Payments Channel Size by Volume of Cards (Million), 2009-2018

Figure 23: Ukraine – Card Payments Channel Size by Transaction Value (UAH Billion), 2009-2018

Figure 24: Ukraine – Credit Cards Category Volume and Penetration, 2009-2018

Figure 25: Ukraine – Credit Cards Category Size by Volume of Cards (Million), 2009-2018

Figure 26: Ukraine – Credit Cards Category Size by Transaction Value (UAH Billion), 2009-2018

Figure 27: Ukraine – Credit Cards Category Size by Transaction Volume (Million), 2009-2018

Figure 28: Ukraine – Credit Cards Transaction Value Share Analysis by Channel (UAH Billion), 2009-2018

Figure 29: Ukraine – Credit Cards Transaction Volume Share Analysis by Channel (Million), 2009-2018

Figure 30: Ukraine – Personal Credit Cards Segment Size by Volume of Cards (Million), 2009-2018

Figure 31: Ukraine – Personal Credit Cards Segment Size by Transaction Value (UAH Billion), 2009-2018

Figure 32: Ukraine – Personal Credit Cards Segment Size by Transaction Volume (Million), 2009-2018

Figure 33: Ukraine – Commercial Credit Cards Segment Size by Volume of Cards (Thousand), 2009-2018

Figure 34: Ukraine – Commercial Credit Cards Segment Size by Transaction Value (UAH Million), 2009-2018

Figure 35: Ukraine – Commercial Credit Cards Segment Size by Transaction Volume (Thousand), 2009-2018

Figure 36: Ukraine – Credit Cards Category Share by Scheme in Terms of Value of Transactions (%), 2013

Figure 37: Ukraine – Credit Cards Category Share by Issuer in Terms of Value of Transactions (%), 2013

Figure 38: Ukraine – Debit Cards Category Volume and Penetration, 2009-2018

Figure 39: Ukraine – Debit Cards Category Size by Volume of Cards (Million), 2009-2018

Figure 40: Ukraine – Debit Cards Category Size by Transaction Value (UAH Billion), 2009-2018

Figure 41: Ukraine – Debit Cards Category Size by Transaction Volume (Million), 2009-2018

Figure 42: Ukraine – Debit Cards Transaction Value Share Analysis by Channel (UAH Billion), 2009-2018

Figure 43: Ukraine – Debit Cards Transaction Volume Share Analysis by Channel (Million), 2009-2018

Figure 44: Ukraine – Debit Cards Category Share by Scheme in Terms of Value of Transactions (%), 2013

Figure 45: Ukraine – Debit Cards Category Share by Issuer in Terms of Value of Transactions (%), 2013

Figure 46: Ukraine – Prepaid Cards Category Volume and Penetration, 2009-2018

Figure 47: Ukraine – Prepaid Cards Category Size by Volume of Cards (Thousand), 2009-2018

Figure 48: Ukraine – Prepaid Cards Category Size by Transaction Value (UAH Million), 2009-2018

Figure 49: Ukraine – Open-Loop Prepaid Cards Segment Size by Volume of Cards (Thousand), 2009-2018

Figure 50: Ukraine – Open-Loop Prepaid Cards Segment Size by Transaction Value (UAH Million), 2009-2018

Figure 51: Ukraine – Closed-Loop Prepaid Cards Segment Size by Volume of Cards (Thousand), 2009-2018

Figure 52: Ukraine – Closed-Loop Prepaid Cards Segment Size by Transaction Value (UAH Million), 2009-2018

Figure 53: Ukraine – Merchant Acquirer POS Terminals Market Share (%), 2012

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