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

The economic reforms introduced by the Pakistani government during the review period (2009–2013) had a positive impact on the country’s GDP growth rate. This rate increased from 2.8% in 2009 to 6.1% in 2013; a trend that is expected to continue over the forecast period (2014–2018). The improved economic conditions are expected to positively impact the country’s cards and payments industry.

Pakistani payment cards (including debit and credit cards) registered a positive growth during the review period, recording a compound annual growth rate (CAGR) of 25.93%, and increasing from 9.2 million cards in circulation in 2009 to 23.1 million by the end of 2013. In terms of transaction value, payment cards valued PKR1.9 trillion (US$18.8 billion) in 2013, after registering a review-period CAGR of 24.37%.

With the development of alternative delivery channels, the launch of biometric ATMs and the availability of fund transfer facilities online and at ATM terminals, banks are able to reach a large volume of the population. Furthermore, the improvement in banking infrastructure, the development of the new products, government initiatives and stable economic conditions are all factors which led to the growth of payment cards.

While cash remains the most popular payment format among Pakistani consumers, they are gradually making use of payment cards for payments for purchases and utility bill payments. The rising consumer awareness of the benefits of payment cards, government initiatives and the introduction of innovative products and marketing campaigns by card issuers are expected to drive consumers towards card-based payments. Banks are implementing various marketing strategies to offer benefits to cardholders, in the form of discounts and rewards points on card use. The government’s initiative to issue Watan Cards for the disbursement of funds to flood victims also contributed to the growth of payment cards. Growth in retail outlets and e-commerce activities, supported by rising POS terminals and online payment gateways, also aided the growth. Banks are also introducing branchless banking concepts so that customers can carry out their banking transactions via a mobile phone.

Debit cards are considered to be the most favorable mode of payment card instrument in Pakistan. The debit card market was very strong in 2013, accounting for 94.4% of the entire cards and payment market, followed by credit cards, with a 5.6% share in terms of transaction value. The same trend is anticipated to follow over the forecast period. Debit cards are generally used by customers to pay utility bills, transfer funds online, make payments at retail outlets and to withdraw cash. In order to offer debit cards, banks are targeting niche segments of society.

The Pakistani prepaid card market is recording positive and steady growth. The market grew at a CAGR of 18.11% in terms of the number of cards in circulation, increasing from 1.4 million in 2009 to 2.7 million in 2013. This is anticipated to record a CAGR of 5.62% over the forecast period, with 3.5 million cards in 2018.

With a large unbanked population and outbound tourism growth, these cards have significant growth potential over the forecast period. UBL issued Wiz cards targeting females, as well as young people and frequent travelers. Furthermore, the Pakistani government also used prepaid cards to disperse funds among citizens as part of its social benefits scheme. The government also issued Watan cards in association with HBL, in order to distribute relief funds to flood affected victims.

Scope

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

• It provides current values for the industry for 2013, and forecast figures for 2018.

• It details the different economic, infrastructural and business drivers affecting the 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 the industry.

Key Highlights

• Pakistani payment cards (including debit and credit cards) registered a positive growth during the review period, recording a compound annual growth rate (CAGR) of 25.93%, and increasing from 9.2 million cards in circulation in 2009 to 23.1 million by the end of 2013. Payment cards valued PKR1.9 trillion (US$18.8 billion) in 2013 in terms of transaction value, after registering a review-period CAGR of 24.37%.

• The average transaction value (ATV) in Pakistan was US$93.0, which is the ninth-largest among other Asia-Pacific countries. China recorded the highest ATV, with US$302.4, followed by Taiwan (US$251.1), Kazakhstan (US$199.7), Hong Kong (US$184.6), Singapore (US$148.5), Thailand (US$148.2), Malaysia (US$140.1) and Australia (US$98.9). Pakistan ranked fifteenth in terms of the card penetration rate compared to the other Asia-Pacific countries, with 0.12 cards per inhabitant.

• Pakistan ranked sixteenth among other Asia-Pacific countries in the frequency of use of payment cards, with 8.7 transactions per card. New Zealand recorded the highest frequency with 146.1 transactions, followed by Australia (96.6), South Korea (44.7), Singapore (36.0), Indonesia (28.8), Hong Kong (26.3), Thailand (25.0), Malaysia (18.1), India (17.5), Kazakhstan (14.2), Taiwan (12.4), Cambodia (11.8), Japan (11.5), Vietnam (10.4) and the Philippines (9.9).

• While cash remains the most popular payment format among Pakistani consumers, they are also gradually making use of payment cards for payments for purchases and utility bill payments. Rising consumer awareness of the benefits of payment cards, government initiatives and the introduction of innovative products and marketing campaigns by card issuers are expected to drive consumers towards card-based payments.

Reasons to buy

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

• Understand the key market trends and growth opportunities in the industry.

• Assess the competitive dynamics in the industry.

• Gain insights into the marketing strategies used for selling various card types in Pakistan.

• Gain insights into key regulations governing the industry.

Companies mentioned

Habib Bank Ltd

National Bank of Pakistan

Alfalah Bank

United Bank Ltd

MCB Bank

Allied Bank

Askari Bank

Citibank

Standard Chartered Bank

MasterCard

Visa

Table of Contents

1 Key Facts and Top Events

2 Executive Summary

3 Payment Instruments

3.1 Current Payments Environment

3.2 Alternative Payment Instruments

3.2.1 Click2Pay

3.2.2 Skrill

3.2.3 ClickandBuy

3.2.4 PayPal

3.2.5 Payza

3.2.6 WebMoney

4 Market Attractiveness and Future Prospects of Cards and Payments

5 Analysis of Cards and Payments Industry Drivers

5.1 Demographic Drivers

5.2 Economic Drivers

5.3 Infrastructure Drivers

5.4 Business Drivers

6 Emerging Consumer Attitudes and Trends

6.1 Market Segmentation and Targeting

6.1.1 Consumer cards

6.1.2 Corporate cards

6.1.3 New product launches

6.2 Travel Spending

6.2.1 Outbound trips spending

6.2.2 Inbound trips spending

7 Payment Cards

7.1 Payment Cards Market Analysis

7.1.1 Number of cards in circulation by card type

7.1.2 Transaction volume by card type

7.1.3 Transaction value by card type

7.1.4 Personal vs commercial cards

8 Debit Cards

8.1 Debit Cards Market Analysis

8.1.1 Number of debit cards in circulation

8.1.2 Debit card transaction volume by channel

8.1.3 Debit card transaction value by channel

8.1.4 Number of debit cards in circulation by scheme

8.1.5 Debit cards transaction value by scheme

8.1.6 Debit cards issuers market shares

8.1.7 Debit card comparison

9 Credit Cards

9.1 Credit Cards Market Analysis

9.1.1 Number of credit cards in circulation

9.1.2 Credit cards transaction volume by channel

9.1.3 Credit cards transaction value by channel

9.1.4 Number of credit cards in circulation by scheme

9.1.5 Credit cards transaction value by scheme

9.1.6 Credit cards issuers market share

9.1.7 Credit card comparison

10 Commercial Cards

10.1 Commercial Cards Market Analysis

10.1.1 Number of commercial cards in circulation

10.1.2 Commercial cards transaction value

11 Regulations in the Cards and Payments Industry

11.1 Regulatory Framework

11.2 Anti-Money Laundering (AML)

11.3 Foreign Direct Investment (FDI) Regulations

12 Card Fraud Statistics

12.1 Card Fraud Analysis

13 Card Issuers

13.1 Habib Bank Ltd

13.2 National Bank of Pakistan

13.3 Bank Alfalah

13.4 United Bank Ltd

13.5 MCB Bank

14 Card Schemes

14.1 Visa

14.2 MasterCard

15 Prepaid Cards

15.1 Prepaid Cards Market Analysis

15.1.1 Number of prepaid cards in circulation

15.1.2 Prepaid cards transaction value

15.1.3 Open-loop prepaid cards

15.1.4 Closed-loop prepaid cards

15.1.5 Prepaid card comparison

16 Appendix

16.1 Tables

16.2 Methodology

16.3 Contact GlobalData

16.4 About GlobalData

16.5 GlobalData’s Services

16.6 Definitions

16.7 Disclaimer

List of Tables

Table 1: Pakistan – Key Facts, 2013

Table 2: Regional Benchmarking of Pakistan Payment Cards Instrument, 2013

Table 3: Specialized Cards for High Income Customers, 2014

Table 4: Specialized Cards for the Young Population, 2014

Table 5: Specialized Cards for the Female Population, 2014

Table 6: Specialized Cards for Business Managers and Entrepreneurs, 2014

Table 7: Pakistan – New Product Launches, 2014

Table 8: Regional Benchmarking of Pakistan Debit Cards, 2013

Table 9: Pakistan – Debit Card Comparison, 2014

Table 10: Regional Benchmarking of Pakistan Credit Cards, 2013

Table 11: Pakistan – Gold Cards Comparison

Table 12: Pakistan – Premium Cards Comparison

Table 13: Pakistan – Market Entry Strategies of Foreign Banks

Table 14: Regional Benchmarking of Pakistan Prepaid Cards, 2013

Table 15: Pakistan – Prepaid Cards Comparison, 2014

Table 16: Pakistan – Payment Instruments Transaction Value (PKR Billion), 2009–2013

Table 17: Pakistan – Payment Instruments Transaction Value (US$ Million), 2009–2013

Table 18: Pakistan – Payment Instruments Transaction Volume (Thousand), 2009–2013

Table 19: Pakistan – Number of Cards in Circulation by Card Types (Million), 2009–2018

Table 20: Pakistan – Transaction Volume by Card Type (Million), 2009–2018

Table 21: Pakistan – Transaction Value by Card Type (PKR Billion), 2009–2018

Table 22: Pakistan – Transaction Value by Card Type (US$ Billion), 2009–2018

Table 23: Pakistan – Personal and Commercial Cards Transaction Value (PKR Billion), 2009–2018

Table 24: Pakistan – Personal and Commercial Cards Transaction Value (US$ Million), 2009–2018

Table 25: Pakistan – Number of Debit Cards in Circulation (Million), 2009–2018

Table 26: Pakistan – Debit Cards Transaction Volume and Frequency by Channel, 2009–2018

Table 27: Pakistan – Debit Cards Total and Average Transaction Value by Channel, 2009–2018

Table 28: Pakistan – Debit Cards Total and Average Transaction Value by Channel, 2009–2018

Table 29: Pakistan – Number of Debit Cards in Circulation By Scheme (Million), 2009–2013

Table 30: Pakistan – Debit Cards Transaction Value By Scheme (PKR Billion), 2009–2013

Table 31: Pakistan – Debit Cards Transaction Value By Scheme (US$ Billion), 2009–2013

Table 32: Pakistan – Debit Cards Transaction Value By Issuer (PKR Billion), 2009–2013

Table 33: Pakistan – Debit Cards Transaction Value By Issuer (US$ Million), 2009–2013

Table 34: Pakistan – Number of Credit Cards in Circulation (Million), 2009–2018

Table 35: Pakistan – Credit Cards Transaction Volume and Frequency by Channel, 2009–2018

Table 36: Pakistan – Credit Cards Total and Average Transaction Value by Channel, 2009–2018

Table 37: Pakistan – Credit Cards Total and Average Transaction Value by Channel, 2009–2018

Table 38: Pakistan – Number of Credit Cards in Circulation By Scheme (Thousand), 2009–2013

Table 39: Pakistan – Credit Cards Transaction Value By Scheme (PKR Billion), 2009–2013

Table 40: Pakistan – Credit Cards Transaction Value By Scheme (US$ Million), 2009–2013

Table 41: Pakistan – Credit Cards Transaction Value By Issuer (PKR Billion), 2009–2013

Table 42: Pakistan – Credit Cards Transaction Value By Issuer (US$ Million), 2009–2013

Table 43: Pakistan – Number of Commercial Cards in Circulation (Thousand), 2009–2018

Table 44: Pakistan – Commercial Cards Transaction Value (PKR Billion), 2009–2018

Table 45: Pakistan – Commercial Cards Transaction Value (US$ Million), 2009–2018

Table 46: Pakistan – Card Fraud (PKR Million), 2009–2013

Table 47: Pakistan – Card Fraud (US$ Thousand), 2009–2013

Table 48: Pakistan – Number of Prepaid Cards in Circulation (Thousand), 2009–2018

Table 49: Pakistan – Prepaid Cards Transaction Value (PKR Billion), 2009–2018

Table 50: Pakistan – Prepaid Cards Transaction Value (US$ Million), 2009–2018

Table 51: Pakistan – Open-Loop Prepaid Cards, 2009–2018

Table 52: Pakistan – Closed-Loop Prepaid Cards, 2009–2018

Table 53: Key Definitions

List of Figures

Figure 1: Pakistan – Payment Instruments Shares by Transaction Value (%), 2009 and 2013

Figure 2: Pakistan – Payment Instruments Shares by Transaction Volume (%), 2009 and 2013

Figure 3: Pakistan – Payment Cards Transaction Value and Growth, 2009–2018

Figure 4: Pakistan – Total Population (Million) and Proportion Over 65 (%) for 2009–2018

Figure 5: Pakistan – Nominal GDP Per Capita (US$) and Real GDP (%) for 2009–2018

Figure 6: Pakistan – Volume of ATMs and Penetration, 2009–2018

Figure 7: Pakistan – Volume of POS and Penetration, 2009–2018

Figure 8: Pakistan – E-Commerce Value (PKR Million), 2009–2018

Figure 9: Pakistan – Cards and Payments Industry Segmentation by Card Type

Figure 10: Pakistan – Outbound Trips Spending (PKR Billion), 2009–2013

Figure 11: Pakistan – Inbound Trips Spending (PKR Billion), 2009–2013

Figure 12: Pakistan – Card Shares In Terms of Numbers in Circulation (%), 2009–2018

Figure 13: Pakistan – Card Shares in Terms of Transaction Volume (%), 2009–2018

Figure 14: Pakistan – Card Shares in Terms of Transaction Value (%), 2009–2018

Figure 15: Pakistan – Personal and Commercial Cards, Transaction Value (PKR Billion) 2009–2018

Figure 16: Pakistan – Number of Debit Cards in Circulation (Million), 2009–2018

Figure 17: Pakistan – Debit Card Transaction Volume by Channel (Million), 2009–2018

Figure 18: Pakistan – Debit Card Transaction Value by Channel (PKR Billion), 2009–2018

Figure 19: Pakistan – Debit Card Scheme Shares in Terms of Number of Cards in Circulation (%), 2013

Figure 20: Pakistan – Debit Card Scheme Market Share in Terms of Transaction Value (%), 2013

Figure 21: Pakistan – Debit Card Issuers’ Market Shares in Terms of Transaction Value (%), 2013

Figure 22: Pakistan – Number of Credit Cards in Circulation (Million), 2009–2018

Figure 23: Pakistan – Credit Cards Transaction Volume by Channel (Million), 2009–2018

Figure 24: Pakistan – Credit Cards Transaction Value by Channel (PKR Billion), 2009–2018

Figure 25: Pakistan – Credit Cards Scheme Market Share in Terms of Number of Cards in Circulation (%), 2013

Figure 26: Pakistan – Credit Cards Scheme Market Share in Terms of Transaction Value (%), 2013

Figure 27: Pakistan – Credit Cards Issuers Market Share in Terms of Transaction Value (%), 2013

Figure 28: Pakistan – Number of Commercial Cards in Circulation (Thousand), 2009–2018

Figure 29: Pakistan – Commercial Cards Transaction Value (PKR Billion), 2009–2018

Figure 30: Pakistan – Shares of Various Types of Card Fraud in Terms of Transaction Value (%), 2009 and 2013

Figure 31: Pakistan – Number of Prepaid Cards in Circulation (Million), 2009–2018

Figure 32: Pakistan – Prepaid Cards Transaction Value (PKR Billion), 2009–2018

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