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

Bahrain has a diversified economy with well-developed infrastructural facilities, and is home to numerous multinational companies in the Middle East and North Africa (MENA).

The government has encouraged investment in the financial service and tourism sectors as part of its economic diversification plans, with special emphasis on Islamic banking. The country has the region’s highest density of Islamic financial institutions, including 24 dedicated banks.

As the need for, and awareness levels of, sophisticated banking products and service offerings increase, banks operating in the country are launching new products to retain market share. Consequently, Bahrain’s cards and payments industry recorded healthy growth during the review period (2009–2013).

Credit transfers and check payments were the preferred payment instruments, having a combined industry share of 99.4% in 2013 in terms of transaction value. The share of payment cards increased from 0.4% in 2009 to 0.6% in 2013, as the government and banks are taking initiatives to increase benefits and awareness levels among consumers and merchants.

In terms of the number of cards in circulation, Bahrain’s payment cards – including debit and credit cards – registered positive growth during the review period, recording a compound annual growth rate (CAGR) of 5.49%, increasing from 830,360 cards in 2009 to 1.0 million in 2013.

In terms of transaction value, payment cards reached BHD1.1 billion (US$3 billion) in 2013, after registering a CAGR of 17.37%. Similarly in terms of transaction volume, payment cards registered a CAGR of 17.69%, reaching 16.1 million in 2013.

The average transaction value (ATV) in Bahrain was US$185.3 in 2013, which was higher than Saudi Arabia with US$131.3, but lower than other peer countries such as Kuwait, Oman and the UAE. Kuwait recorded the highest ATV with US$319.6, followed by the UAE with US$263.1 and Oman with US$207.4.

In terms of card penetration, Bahrain recorded 0.80 cards per inhabitant in 2013, while the UAE, Kuwait, Oman and Saudi Arabia recorded 1.96, 1.32, 1.03 and 0.69 respectively. In terms of frequency of use, Bahrain recorded 15.6 transactions per card in 2013, while Saudi Arabia recorded 95.3, Kuwait recorded 47.7, the UAE recorded 43.1 and Oman recorded 13.4.

The Bahraini government’s eGovernment project set out to promote electronic payments, improve banking infrastructure, introduce Sharia-compliant payment cards, and raise consumer awareness of electronic payments, which were the main factors driving the payment card channel’s growth. The adoption of Europay, MasterCard and Visa (EMV) standards – as well as growth in the e-commerce and retail sectors – also supported this growth.

Scope

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

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

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

Key Highlights

• Credit transfers and check payments were the preferred payment instruments, having a combined industry share of 99.4% in 2013 in terms of transaction value. The share of payment cards increased from 0.4% in 2009 to 0.6% in 2013, as the government and banks are taking initiatives to increase benefits and awareness levels among consumers and merchants.

• In terms of the number of cards in circulation, Bahrain’s payment cards – including debit and credit cards – registered positive growth during the review period, recording a compound annual growth rate (CAGR) of 5.49%, increasing from 830,360 cards in 2009 to 1.0 million in 2013. In terms of transaction value, payment cards reached BHD1.1 billion (US$3 billion) in 2013, after registering a CAGR of 17.37%. Similarly in terms of transaction volume, payment cards registered a CAGR of 17.69%, reaching 16.1 million in 2013.

• The average transaction value (ATV) in Bahrain was US$185.3 in 2013, which was higher than Saudi Arabia with US$131.3, but lower than other peer countries such as Kuwait, Oman and the UAE. Kuwait recorded the highest ATV with US$319.6, followed by the UAE with US$263.1 and Oman with US$207.4.

• The debit cards market dominated the payment card instrument during the review period, in terms of the number of cards in circulation, transaction value and volume. The share of debit cards stood at 75.5% in 2013 in terms of number of cards in circulation, while in terms of transaction value and volume the shares were 76% and 61.8% respectively.

• The Bahraini government’s eGovernment project set out to promote electronic payments, improve banking infrastructure, introduce Sharia-compliant payment cards, and raise consumer awareness of electronic payments, which were the main factors driving the payment card channel’s growth. The adoption of Europay, MasterCard and Visa (EMV) standards – as well as growth in the e-commerce and retail sectors – also supported this growth.

Reasons to buy

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

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

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

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

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

Companies mentioned

National Bank of Bahrain

Ahli United Bank

CrediMax

HSBC Bahrain

Standard Chartered Bank Bahrain

Citibank

American Express

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 Cashu

3.2.2 Neteller

3.2.3 PayPal

3.2.4 Skrill

3.2.5 2Checkout

3.2.6 Ukash

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 Commercial cards

6.2 New Product Launches

6.3 Travel Spending

6.3.1 Outbound trips volume and spending

6.3.2 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 Commercial Cards

10.1 Commercial Cards Market Analysis

10.1.1 Number of commercial cards in circulation

10.1.2 Commercial cards transaction value

10.1.3 Commercial cards comparison

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 National Bank of Bahrain

13.2 Ahli United Bank

13.3 CrediMax

13.4 HSBC Bahrain

13.5 Standard Chartered Bank Bahrain

14 Card Schemes

14.1 Visa

14.2 MasterCard

14.3 American Express

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 Prepaid cards 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: Bahrain – Key Facts, 2013

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

Table 3: Specialized Cards for High-Income Consumers, 2014

Table 4: Specialized Cards for Frequent Travelers, 2014

Table 5: Specialized Cards for Young Population, 2014

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

Table 7: Bahrain – New Product Launches

Table 8: Regional Benchmarking of Bahraini Debit Cards Market, 2013

Table 9: Bahrain – Debit Cards Comparison and Key Features

Table 10: Regional Benchmarking of Bahraini Credit Cards Market, 2013

Table 11: Bahrain – Gold Credit Cards Comparison and Key Features

Table 12: Bahrain – Premium Credit Cards Comparison and Key Features

Table 13: Bahrain – Commercial Cards Comparison and Key Features

Table 14: Bahrain – Market-Entry Strategies of Foreign Banks and Institutions

Table 15: Regional Benchmarking of Bahraini Prepaid Cards Market, 2013

Table 16: Bahrain – Prepaid Cards Comparison and Key Features

Table 17: Bahrain – Payment Instruments Transaction Value (BHD Million), 2009–2013

Table 18: Bahrain – Payment Instruments Transaction Value (US$ Million), 2009–2013

Table 19: Bahrain – Payment Instruments Transaction Volume (Million), 2009–2013

Table 20: Bahrain – Number of Cards in Circulation by Card Types (Thousand), 2009–2018

Table 21: Bahrain – Transaction Volume by Card Type (Million), 2009–2018

Table 22: Bahrain – Transaction Value by Card Type (BHD Million), 2009–2018

Table 23: Bahrain – Transaction Value by Card Type (US$ Billion), 2009–2018

Table 24: Bahrain – Personal and Commercial Cards Transaction Value (BHD Million), 2009–2018

Table 25: Bahrain – Personal and Commercial Cards Transaction Value (US$ Million), 2009–2018

Table 26: Bahrain – Number of Debit Cards in Circulation (Thousand), 2009–2018

Table 27: Bahrain – Debit Cards Transaction Volume and Frequency by Channel, 2009–2018

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

Table 29: Bahrain – Debit Cards Total and Average Transaction Value by Channel, 2009–2018

Table 30: Bahrain – Number of Debit Cards in Circulation By Scheme (Thousand), 2009–2013

Table 31: Bahrain – Debit Cards Transaction Value By Scheme (BHD Million), 2009–2013

Table 32: Bahrain – Debit Cards Transaction Value By Scheme (US$ Million), 2009–2013

Table 33: Bahrain – Debit Cards Transaction Value by Issuer (BHD Million), 2009–2013

Table 34: Bahrain – Debit Cards Transaction Value by Issuer (US$ Million), 2009–2013

Table 35: Bahrain – Number of Credit Cards in Circulation (Thousand), 2009–2018

Table 36: Bahrain – Credit Cards Transaction Volume and Frequency by Channel, 2009–2018

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

Table 38: Bahrain – Credit Cards Total and Average Transaction Value by Channel, 2009–2018

Table 39: Bahrain – Number of Credit Cards in Circulation by Scheme (Thousand), 2009–2013

Table 40: Bahrain – Credit Cards Transaction Value by Scheme (BHD Million), 2009–2013

Table 41: Bahrain – Credit Cards Transaction Value by Scheme (US$ Million), 2009–2013

Table 42: Bahrain – Credit Cards Transaction Value by Issuer (BHD Million), 2009–2013

Table 43: Bahrain – Credit Cards Transaction Value by Issuer (US$ Million), 2009–2013

Table 44: Bahrain – Credit Cards Balance Outstanding by Issuer (BHD Million), 2009–2013

Table 45: Bahrain – Credit Cards Balance Outstanding by Issuer (US$ Million), 2009–2013

Table 46: Bahrain – Number of Commercial Cards in Circulation (Thousand), 2009–2018

Table 47: Bahrain – Commercial Cards Transaction Value (BHD Million), 2009–2018

Table 48: Bahrain – Commercial Cards Transaction Value (US$ Million), 2009–2018

Table 49: Bahrain – Card Fraud (BHD Million), 2009–2013

Table 50: Bahrain – Card Fraud (US$ Million), 2009–2013

Table 51: Bahrain – Number of Prepaid Cards in Circulation (Million), 2009–2018

Table 52: Bahrain – Prepaid Cards Transaction Value (BHD Million), 2009–2018

Table 53: Bahrain – Prepaid Cards Transaction Value (US$ Million), 2009–2018

Table 54: Key Definitions

List of Figures

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

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

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

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

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

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

Figure 7: Bahrain – Volume of POS Terminals (Thousand) and Penetration, 2009–2018

Figure 8: Bahrain – E-Commerce Value (BHD Million), 2009–2018

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

Figure 10: Bahrain – Outbound Trips Volume (Thousand) and Spending (BHD Million), 2009–2018

Figure 11: Bahrain – Inbound Trips Volume (Thousand) and Spending (BHD Million), 2009–2018

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

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

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

Figure 15: Bahrain – Personal and Commercial Cards, Transaction Value (BHD Million), 2009–2018

Figure 16: Bahrain – Number of Debit Cards in Circulation (Thousand), 2009–2018

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

Figure 18: Bahrain – Debit Card Transaction Value by Channel (BHD Million), 2009–2018

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

Figure 20: Bahrain – Debit Card Scheme Shares in Terms of Transaction Value (%), 2013

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

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

Figure 23: Bahrain – Credit Card Transaction Volume by Channel (Thousand), 2009–2018

Figure 24: Bahrain – Credit Card Transaction Value by Channel (BHD Million), 2009–2018

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

Figure 26: Bahrain – Credit Card Scheme Shares in Terms of Transaction Value (%), 2013

Figure 27: Bahrain – Credit Card Issuers’ Shares in Terms of Transaction Value (%), 2013

Figure 28: Bahrain – Credit Card Issuers’ Shares in Terms of Outstanding Balance (%), 2013

Figure 29: Bahrain – Number of Commercial Cards in Circulation (Thousand), 2009–2018

Figure 30: Bahrain – Commercial Cards Transaction Value (BHD Million), 2009–2018

Figure 31: Bahrain – Shares of Various Types of Card Fraud in Terms of Transaction Value (%), 2009 and 2013

Figure 32: Bahrain – Number of Prepaid Cards in Circulation (Thousand), 2009–2018

Figure 33: Bahrain – Prepaid Cards Transaction Value (BHD Million), 2009–2018

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