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

Before the global financial crisis, the Croatian economy grew at a rate of 4–5% annually. However, the crisis impeded economic progress, and the country entered into its sixth year of recession in 2014. This had a direct bearing on the Croatian cards and payments industry.

Croatia became the 28th member of the European Union (EU) on July 1, 2013, and has since been trying to raise its competitiveness to benefit from EU funding to aid economic development and growth.

Consequently, the government has undertaken labor, pension, social benefit and investment reforms, which are anticipated to stimulate employment opportunities. The privatization of large government-owned companies and access to EU funds are anticipated to provide support for the country’s economic recovery over the forecast period (2014–2018). However, the growth prospects for the cards and payments industry are anticipated to remain weak, until the economy re-enters a state of growth.

In 2013, credit transfers and direct debits were the most popular payment instruments, with a combined industry share of 90.3% in terms of transaction value, while payment cards accounted for a share of just 2.2%. The use of cash is increasing, and its share rose from 6.3% in 2009 to 7.5% in 2013.

In terms of the number of cards in circulation, payment cards (debit, credit and charge cards) declined marginally during the review period, recording a compound annual growth rate (CAGR) of -0.39%, decreasing from 8.5 million in 2009 to 8.4 million in 2013. However, in terms of transaction value, payment cards valued HRK116.1 billion (US$20.3 billion) in 2013, after registering a review-period CAGR of 1.07%.

Improved banking infrastructure, new product developments, a higher awareness of electronic payments and the wider acceptance of payment cards at POS terminals were the main growth drivers. The adoption of Europay, MasterCard and Visa (EMV) standards, as well as the emergence of contactless technology, also supported industry growth.

In 2013, the Croatia’s average transaction value (ATV) was US$64.8, equivalent to ranking of 24th in the European region. Greece recorded the highest ATV of US$227.6, followed by Switzerland (US$156.6), Italy (US$140.4), Germany (US$131.5), Luxembourg (US$121.2), Ireland (US$106.4) and Romania (US$104.3). In terms of card penetration, Croatia had 1.88 cards per inhabitant in 2013, the eighth-highest figure in the region. Luxembourg with (4.43) had the highest penetration, followed by Norway (2.73), the UK (2.48), Sweden (2.38), Belgium (2.04), Turkey (1.95) and Switzerland (1.91).

In terms of frequency of use, Croatia recorded 36.9 transactions per card in 2013. Finland recorded 172.8 transactions per card and had the highest frequency of use, followed by Denmark (159.2), Estonia (149.4) and France (127.8).

In terms of transaction value, debit cards remained a popular payment card during the review period, growing from HRK82.1 billion (US$15.5 billion) in 2009 to HRK87.7 billion (US$15.3 billion) in 2013, at a review-period CAGR of 1.68%. The value is anticipated to grow to reach HRK115.7 billion (US$21 billion) in 2018, at a CAGR of 5.38%. Due to the European debt crisis and uncertain economic conditions, the majority of Croatian consumers became debt-cautious and preferred to use debit cards to make payments to track expenses. Consequently, the debit cards market grew in terms of the number of cards in circulation, transaction value and volume during the review period (2009–2013).

Transaction values at POS terminals gradually increased during the review period, a trend that is anticipated to continue over the forecast period.

Scope

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

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

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

Key Highlights

• In terms of the number of cards in circulation, payment cards (debit, credit and charge cards) declined marginally during the review period, recording a compound annual growth rate (CAGR) of -0.39%, decreasing from 8.5 million in 2009 to 8.4 million in 2013. However, in terms of transaction value, payment cards valued HRK116.1 billion (US$20.3 billion) in 2013, after registering a review-period CAGR of 1.07%.

• In terms of transaction value, debit cards remained a popular payment card during the review period, growing from HRK82.1 billion (US$15.5 billion) in 2009 to HRK87.7 billion (US$15.3 billion) in 2013, at a review-period CAGR of 1.68%. The value is anticipated to reach HRK115.7 billion (US$21 billion) in 2018, at a CAGR of 5.38%. Due to the European debt crisis and uncertain economic conditions, the majority of Croatian consumers became debt-cautious and preferred to use debit cards to make payments to track expenses. Consequently, the debit cards market grew in terms of the number of cards in circulation, transaction value and volume during the review period (2009–2013). Transaction values at POS terminals gradually increased during the review period, a trend that is anticipated to continue over the forecast period.

• PBZ launched the American Express Gift Card, the first prepaid card in the American Express portfolio of PBZ Card in 2012. Similarly, Hrvatska Poštanska Banka (HPB), in April 2013 launched a reloadable Visa prepaid card. The card can be used at home and abroad, and also to withdraw cash from automatic teller machines (ATMs) and at POS terminals. Also in May, the bank launched the Visa Prepaid Youth Card. The card is designed for young people aged 14 and above.

• Contactless cards were first introduced in Croatia in December 2012, with MasterCard PayPass first issued by Erste & Steiermärkische Banka. Contactless technology is being rolled-out by banks and card issuing companies for making payments using mobile phones. In July 2012, telecommunication provider Hrvatski Telekom introduced mobile payment based on NFC technology, and in August 2014, PBZ, Intesa Sanpaolo Card and American Express announced a pilot to test mobile NFC payments. The emergence of contactless technology is expected to drive card-based payments over the forecast period.

Reasons to buy

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

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

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

• Gain insights into the strategies used to market various card types in Croatia.

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

Companies mentioned

Zagrebačka Banka

Privredna Banka Zagreb

Erste & Steiermärkische Banka

Hrvatska Poštanska Banka

Splitska Banka

MasterCard

Visa

Diners Club

American Express

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 Mobile payments

3.2.2 ClickandBuy

3.2.3 Click2Pay

3.2.4 hyperWALLET

3.2.5 Skrill

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

6.2 Travel Spending

6.2.1 Outbound trips volume and spending

6.2.2 Inbound trips volume and spending

7 Payment Cards

7.1 Payment Cards Instrument 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 cards transaction volume by channel

8.1.3 Debit cards 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 cards 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 cards comparison

10 Charge Cards

10.1 Charge Cards Market Analysis

10.1.1 Number of charge cards in circulation

10.1.2 Charge cards transaction volume by channel

10.1.3 Charge cards transaction value by channel

10.1.4 Number of charge cards in circulation by scheme

10.1.5 Charge cards transaction value by scheme

10.1.6 Charge cards comparison

11 Commercial Cards

11.1 Commercial Cards Market Analysis

11.1.1 Number of commercial cards in circulation

11.1.2 Commercial cards transaction value

11.1.3 Commercial credit cards

11.1.4 Commercial charge cards

11.1.5 Commercial cards comparison

12 Regulations in the Cards and Payments Industry

12.1 Regulatory Framework

12.2 Anti-Money Laundering and Combating of Terrorism Financing (AML and CTF)

12.3 Foreign Direct Investment (FDI) Regulations

13 Card Fraud Statistics

13.1 Card Fraud Analysis

14 Card Issuers

14.1 Zagrebačka Banka

14.2 Privredna Banka Zagreb

14.3 Erste & Steiermärkische Banka

14.4 Hrvatska Poštanska Banka

14.5 Splitska Banka

15 Card Schemes

15.1 Visa

15.2 MasterCard

15.3 American Express

15.4 Diners Club

16 Prepaid Cards

16.1 Prepaid Cards Market Analysis

16.1.1 Number of prepaid cards in circulation

16.1.2 Prepaid cards transaction value

16.1.3 Open-loop prepaid cards

16.1.4 Closed-loop prepaid cards

16.1.5 Prepaid cards comparison

17 Appendix

17.1 Tables

17.2 Methodology

17.3 Contact GlobalData

17.4 About GlobalData

17.5 GlobalData’s Services

17.6 Definitions

17.7 Disclaimer

List of Tables

Table 1: Croatia – Key Facts, 2013

Table 2: Regional Benchmarking of Croatian Payment Cards, 2013

Table 3: Cards for High-Income Customers, 2014

Table 4: Cards for Students and Young Population, 2014

Table 5: Cards for Shoppers, 2014

Table 6: Cards for Frequent Travelers, 2014

Table 7: Cards for Corporate Customers, 2014

Table 8: Regional Benchmarking of Croatian Debit Cards, 2013

Table 9: Croatia – Visa Domestic Interchange Reimbursement Fees, 2013

Table 10: Croatia – MasterCard Consumer Card and Commercial Card Interchange Fees, 2014

Table 11: Croatia – Debit Cards Comparison and Key Features, 2014

Table 12: Regional Benchmarking of Croatian Credit Cards, 2013

Table 13: Croatia – Visa Domestic Interchange Reimbursement Fees, 2013

Table 14: Croatia – MasterCard Consumer Card and Commercial Card Interchange Fees, 2014

Table 15: Croatia – Gold Credit Cards Comparison and Key Features

Table 16: Croatia – Premium Credit Cards Comparison and Key Features

Table 17: Regional Benchmarking of Croatian Charge Cards, 2013

Table 18: Croatia – Charge Cards Comparison and Key Features, 2014

Table 19: Croatia – Commercial Cards Comparison and Key Features, 2014

Table 20: Croatia – Market-Entry Strategies of Foreign Banks and Institutions

Table 21: Regional Benchmarking of Croatian Prepaid Cards, 2013

Table 22: Croatia – Prepaid Cards Comparison and Key Features

Table 23: Croatia – Payment Instruments Transaction Value (HRK Million), 2009–2013

Table 24: Croatia – Payment Instruments Transaction Value (US$ Million), 2009–2013

Table 25: Croatia – Payment Instruments Transaction Volume (Million), 2009–2013

Table 26: Croatia – Number of Cards in Circulation by Card Types (Thousand), 2009–2018

Table 27: Croatia – Transaction Volume by Card Type (Million), 2009–2018

Table 28: Croatia – Transaction Value by Card Type (HRK Billion), 2009–2018

Table 29: Croatia – Transaction Value by Card Type (US$ Billion), 2009–2018

Table 30: Croatia – Personal and Commercial Cards Transaction Value (HRK Billion), 2009–2018

Table 31: Croatia – Personal and Commercial Cards Transaction Value (US$ Billion), 2009–2018

Table 32: Croatia – Number of Debit Cards in Circulation (Million), 2009–2018

Table 33: Croatia – Debit Cards Transaction Volume and Frequency by Channel, 2009–2018

Table 34: Croatia – Debit Cards Total and Average Transaction Value by Channel, 2009–2018

Table 35: Croatia – Debit Cards Total and Average Transaction Value by Channel, 2009–2018

Table 36: Croatia – Number of Debit Cards in Circulation By Scheme (Million), 2009–2013

Table 37: Croatia – Debit Cards Transaction Value By Scheme (HRK Billion), 2009–2013

Table 38: Croatia – Debit Cards Transaction Value By Scheme (US$ Billion), 2009–2013

Table 39: Croatia – Debit Cards Transaction Value by Issuer (HRK Billion), 2009–2013

Table 40: Croatia – Debit Cards Transaction Value by Issuer (US$ Billion), 2009–2013

Table 41: Croatia – Number of Credit Cards in Circulation (Thousand), 2009–2018

Table 42: Croatia – Credit Cards Transaction Volume and Frequency by Channel, 2009–2018

Table 43: Croatia – Credit Cards Total and Average Transaction Value by Channel, 2009–2018

Table 44: Croatia – Credit Cards Total and Average Transaction Value by Channel, 2009–2018

Table 45: Croatia – Number of Credit Cards in Circulation By Scheme (Thousand), 2009–2013

Table 46: Croatia – Credit Cards Transaction Value By Scheme (HRK Million), 2009–2013

Table 47: Croatia – Credit Cards Transaction Value By Scheme (US$ Million), 2009–2013

Table 48: Croatia – Credit Cards Transaction Value By Issuer (HRK Million), 2009–2013

Table 49: Croatia – Credit Cards Transaction Value By Issuer (US$ Million), 2009–2013

Table 50: Croatia – Credit Cards Balance Outstanding By Issuer (HRK Million), 2009–2013

Table 51: Croatia – Credit Cards Balance Outstanding By Issuer (US$ Million), 2009–2013

Table 52: Croatia – Number of Charge Cards in Circulation (Thousand), 2009–2018

Table 53: Croatia – Charge Cards Transaction Volume and Frequency by Channel, 2009–2018

Table 54: Croatia – Charge Cards Total and Average Transaction Value by Channel, 2009–2018

Table 55: Croatia – Charge Cards Total and Average Transaction Value by Channel, 2009–2018

Table 56: Croatia – Number of Charge Cards in Circulation By Scheme (Thousand), 2009–2013

Table 57: Croatia – Charge Cards Transaction Value By Scheme (HRK Billion), 2009–2013

Table 58: Croatia – Charge Cards Transaction Value By Scheme (US$ Billion), 2009–2013

Table 59: Croatia – Number of Commercial Cards in Circulation (Thousand), 2009–2018

Table 60: Croatia – Commercial Cards Transaction Value (HRK Billion), 2009–2018

Table 61: Croatia – Commercial Cards Transaction Value (US$ Million), 2009–2018

Table 62: Croatia – Commercial Credit Cards, 2009–2018

Table 63: Croatia – Commercial Charge Cards, 2009–2018

Table 64: Croatia – Card Fraud (HRK Million), 2009–2013

Table 65: Croatia – Card Fraud (US$ Thousand), 2009–2013

Table 66: Croatia – Number of Prepaid Cards in Circulation (Million), 2009–2018

Table 67: Croatia – Prepaid Cards Transaction Value (HRK Million), 2009–2018

Table 68: Croatia – Prepaid Cards Transaction Value (US$ Million), 2009–2018

Table 69: Croatia – Open-Loop Prepaid Cards, 2009–2018

Table 70: Croatia – Closed-Loop Prepaid Cards, 2009–2018

Table 71: Key Definitions

List of Figures

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

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

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

Figure 4: Croatia – Total Population (Million) and Proportion Aged Over 65 Years, 2009–2018

Figure 5: Croatia – Nominal GDP per Capita (US$) and Real GDP Growth Rate (%), 2009–2018

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

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

Figure 8: Croatia – E-Commerce Value (HRK Million), 2009–2018

Figure 9: Croatia – Cards and Payments Industry Segmentation by Card Type, 2014

Figure 10: Croatia – Outbound Trips Volume and Spending, 2009–2018

Figure 11: Croatia – Inbound Trips Volume and Spending, 2009–2018

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

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

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

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

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

Figure 17: Croatia – Debit Cards Transaction Volume by Channel (Million), 2009–2018

Figure 18: Croatia – Debit Cards Transaction Value by Channel (HRK Billion), 2009–2018

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

Figure 20: Croatia – Debit Cards Scheme Market Shares in Terms of Transaction Value (%), 2013

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

Figure 22: Croatia – Number of Credit Cards in Circulation (Thousand), 2009–2018

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

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

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

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

Figure 27: Croatia – Credit Cards Issuers’ Market Shares in Terms of Transaction Value (%), 2013

Figure 28: Croatia – Credit Cards Issuers’ Market Shares in Terms of Outstanding Balance (%), 2013

Figure 29: Croatia – Number of Charge Cards in Circulation (Thousand), 2009–2018

Figure 30: Croatia – Charge Cards Transaction Volume by Channel (Million), 2009–2018

Figure 31: Croatia – Charge Cards Transaction Value by Channel (HRK Billion), 2009–2018

Figure 32: Croatia – Charge Cards Scheme Market Shares in Terms of Number of Cards in Circulation (%), 2013

Figure 33: Croatia – Charge Cards Scheme Market Shares in Terms of Transaction Value (%), 2013

Figure 34: Croatia – Number of Commercial Cards in Circulation (Thousand), 2009–2018

Figure 35: Croatia – Commercial Cards Transaction Value (HRK Million), 2009–2018

Figure 36: Croatia – Shares of Various Types of Card Fraud in Terms of Transaction Value (%), 2009 and 2013

Figure 37: Croatia – Number of Prepaid Cards in Circulation (Million), 2009–2018

Figure 38: Croatia – Prepaid Cards Transaction Value (HRK Million), 2009–2018

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