The Cards and Payments Industry in the UK: Emerging Trends and Opportunities to 2019

GlobalData’s 'The Cards and Payments Industry in the UK: Emerging Trends and Opportunities to 2019' report provides detailed analysis of market trends in the UK cards and payments industry. It provides values and volumes for a number of key performance indicators in the industry, including check payments, credit transfers, direct debits, payment cards and cash transactions during the review period (2010–2014).

The report also analyzes various payment card markets operating in the industry and provides detailed information on the number of cards in circulation, and transaction values and volumes during the review period and over the forecast period (2015–2019). It also offers information on the country's competitive landscape, including market shares of issuers and schemes.

The report brings together GlobalData’s research, modeling, and analysis expertise to allow banks and card issuers to identify segment dynamics and competitive advantages. The report also covers detailed regulatory policies, recent changes in regulatory structure, card fraud statistics and profiles of card issuers operating in the country.

Scope

• This report provides a comprehensive analysis of the UK cards and payments industry.

• It provides current values for the UK cards and payments industry for 2014, and forecast figures to 2019.

• It details the different demographic, economic, infrastructural and business drivers affecting the UK cards and payments industry.

• It outlines the current regulatory framework in the industry.

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

• It profiles major banks in the UK cards and payments industry.

Key Highlights

• The UK government implemented the EU rule on the interchange fee cap effective from December 9, 2015. Under these new rules, the interchange fee for credit and debit cards are capped at 0.3% and 0.2%, respectively. The regulation is anticipated to have a major impact on profitability of the UK's payment cards market. With a reduction in revenue, issuers are likely to cut card offerings and benefits for consumers, and instead look at new ways to generate revenue. One way could be to increase fees levied on debit and credit cards. Alternatively, high-street banks might put an end to free current accounts. The cap on interchange fees is expected to reduce card issuers' revenue from consumer cards, but not commercial cards. Therefore, card issuers are likely to compensate for some of the lost revenue by issuing more commercial charge cards and credit cards.

• The emergence of digital only banks is likely to accelerate a shift towards electronic payments in the UK. Atom Bank, which was granted a banking license by the Bank of England in June 2015, may become the country's first digital only bank, allowing consumers to conduct banking transactions entirely online and via mobile phones. Other digital-only banks, such as the German-based Fidor Bank, Tandem Bank and Starling Bank, are also making their debut into the market.

• The UK payment cards market has seen the uptake of contactless technology from 2013 onwards. According to the UK Cards Association, the number of contactless card transactions increased from 1.7 million in 2010 to 319.2 million in 2014. In September 2015 alone, 103.2 million contactless transactions were made, including 89.7 million debit cards and 13.5 million credit and charge cards. One of the key drivers of contactless payments has been its use in London's public transport system. In 2014, there were 17 million contactless payments in bus journeys and 14 million in rail trips. To drive growth in contactless payments, the UK Cards Association increased the spending limit on contactless transactions from the existing US$31.5 (GBP20) to US$47.9 (GBP30) in September 2015. This move is anticipated to further propel contactless transactions in the UK.

Reasons to buy

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

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

• Assess the competitive dynamics in the UK cards and payments industry.

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

• Gain insights into key regulations governing the UK cards and payments industry.

Companies mentioned

Llyods Bank

Barclays Bank

The Royal Bank of Scotland

HSBC

Santander UK

American Express

Visa

MasterCard

Diners Club

Table of Contents

1 Definitions and Methodology

1.1 Definitions

1.2 Methodology

2 Key Facts and Events

3 Executive Summary

4 Payment Instruments

4.1 Current Payment Environment

5 E-Commerce

5.1 E-Commerce Market Analysis

6 Alternative Payments

6.1 Alternative Payment Instruments

6.1.1 Apple Pay

6.1.2 Samsung Pay

6.1.3 bPay

6.1.4 PayPal

6.1.5 Skrill

6.1.6 Visa V.me

6.1.7 MasterPass

6.1.8 Ukash

6.1.9 Paym

6.1.10 Pingit

6.1.11 Zapper

6.1.12 Zapp

6.1.13 Starbucks mobile wallet

7 Regulations in the Cards and Payments Industry

7.1 Regulatory Framework

7.1.1 Status of implementation of payment services directive (PSD) in the UK

7.1.2 Interchange fee regulation

7.1.3 Single European payment area (SEPA) implementation in the UK

7.1.4 Best practice guidelines set by the UK payment cards association

7.2 Anti-Money Laundering (AML)

7.3 Foreign Direct Investment (FDI) Regulations

8 Analysis of Cards and Payments Industry Drivers

8.1 Demographic Drivers

8.2 Economic Drivers

8.3 Infrastructure Drivers

8.4 Business Drivers

9 Market Segmentation and New Product Launches

9.1 Market Segmentation and Targeting

9.1.1 Consumer cards

9.1.2 Commercial cards

9.2 New Product Launches

10 Payment Cards

10.1 Payment Cards Analysis

10.1.1 Volume and value of payment card transactions by type

10.1.2 Personal vs commercial cards

10.1.3 Contactless payments

11 Debit Cards

11.1 Debit Card Market Analysis

11.1.1 Debit card transaction volumes and values by channel

11.1.2 Debit card scheme and issuer shares in terms of transaction value

11.1.3 Debit cards comparison

12 Credit Cards

12.1 Credit Card Market Analysis

12.1.1 Credit card transaction volumes and values by channel

12.1.2 Credit card scheme and issuer shares in terms of transaction value

12.1.3 Credit cards comparison

13 Charge Cards

13.1 Charge Card Market Analysis

13.1.1 Charge card transaction volumes and values by channel

13.1.2 Charge card scheme shares in terms of transaction value

13.1.3 Charge cards comparison

14 Commercial Cards

14.1 Commercial Card Market Analysis

14.1.1 Commercial cards comparison

15 Card Fraud Statistics

15.1 Card Fraud Analysis

16 Card Issuers

16.1 Lloyds Bank

16.2 Barclays Bank

16.3 The Royal Bank of Scotland

16.4 HSBC

16.5 Santander UK

16.6 American Express

17 Prepaid Cards

17.1 Prepaid Card Market Analysis

17.1.1 Prepaid cards comparison

18 Merchant Acquiring

18.1 Merchant Acquiring Market Analysis

19 Appendix

19.1 Tables

19.2 Contact GlobalData

19.3 About GlobalData

19.4 GlobalData’s Services

19.5 Disclaimer

List of Tables

Table 1: Key Definitions

Table 2: Annual Average Exchange Rate

Table 3: The UK – Key Facts, 2014

Table 4: Regional Benchmarking of the UK Payment Cards, 2014

Table 5: The UK – Mode of Entry of Foreign Banks

Table 6: Cards for High-Income Consumers, 2015

Table 7: Cards for Travelers, 2015

Table 8: Cards for Students and Young Population, 2015

Table 9: Cashback Credit Cards, 2015

Table 10: Shopping Reward Point Credit Cards, 2015

Table 11: Balance Transfer Credit Cards, 2015

Table 12: Commercial Cards Comparison and Key Features, 2015

Table 13: The UK – New Product Launches

Table 14: The UK – Contactless Payments, 2010–2015

Table 15: The UK – Contactless Payments, 2010–2015

Table 16: The UK – Debit Cards Comparison and Key Features, 2015

Table 17: The UK – Gold Credit Cards Comparison and Key Features, 2015

Table 18: The UK – Premium Credit Cards Comparison and Key Features, 2015

Table 19: The UK – Charge Cards Comparison and Key Features, 2015

Table 20: The UK – Commercial Cards Comparison and Key Features, 2015

Table 21: The UK – Prepaid Cards Comparison and Key Features, 2015

Table 22: The UK – Payment Instrument Transaction Values (GBP Billion), 2010–2014

Table 23: The UK – Payment Instrument Transaction Values (US$ Billion), 2010–2014

Table 24: The UK – Payment Instrument Transaction Volumes (Billion), 2010–2014

Table 25: The UK – Number of Payment Cards in Circulation by Type (Million), 2010–2019

Table 26: The UK – Volume of Payment Card Transactions by Type (Billion), 2010–2019

Table 27: The UK – Value of Payment Card Transactions by Type (GBP Billion), 2010–2019

Table 28: The UK – Value of Payment Card Transactions by Type (US$ Billion), 2010–2019

Table 29: The UK – Personal and Commercial Card Transaction Volumes (Million), 2010–2019

Table 30: The UK – Personal and Commercial Card Transaction Values (GBP Billion), 2010–2019

Table 31: The UK – Personal and Commercial Card Transaction Values (US$ Billion), 2010–2019

Table 32: The UK – Number of Debit Cards in Circulation (Million), 2010–2019

Table 33: The UK – Debit Card Transaction Volumes and Frequency by Channel, 2010–2019

Table 34: The UK – Debit Card Total and Average Transaction Values by Channel, 2010–2019

Table 35: The UK – Debit Card Total and Average Transaction Values by Channel, 2010–2019

Table 36: The UK – Number of Debit Cards in Circulation by Scheme (Million), 2010–2014

Table 37: The UK – Debit Card Transaction Values by Scheme (GBP Billion), 2010–2014

Table 38: The UK – Debit Card Transaction Values by Scheme (US$ Billion), 2010–2014

Table 39: The UK – Debit Card Transaction Values by Issuer (GBP Billion), 2010–2014

Table 40: The UK – Debit Card Transaction Values by Issuer (US$ Billion), 2010–2014

Table 41: The UK – Number of Credit Cards in Circulation (Million), 2010–2019

Table 42: The UK – Credit Card Transaction Volumes and Frequency by Channel, 2010–2019

Table 43: The UK – Credit Card Total and Average Transaction Values by Channel, 2010–2019

Table 44: The UK – Credit Card Total and Average Transaction Values by Channel, 2010–2019

Table 45: The UK – Number of Credit Cards in Circulation by Scheme (Million), 2010–2014

Table 46: The UK – Credit Card Transaction Values by Scheme (GBP Billion), 2010–2014

Table 47: The UK – Credit Card Transaction Values by Scheme (US$ Billion), 2010–2014

Table 48: The UK – Pay Later Card Transaction Values by Issuer (GBP Billion), 2010–2014

Table 49: The UK – Pay Later Card Transaction Values by Issuer (US$ Billion), 2010–2014

Table 50: The UK – Credit Card Balances Outstanding by Issuer (GBP Billion), 2010–2014

Table 51: The UK – Credit Card Balances Outstanding by Issuer (US$ Billion), 2010–2014

Table 52: The UK – Number of Charge Cards in Circulation (Million), 2010–2019

Table 53: The UK – Charge Card Transaction Volumes and Frequency by Channel, 2010–2019

Table 54: The UK – Charge Card Total and Average Transaction Values by Channel, 2010–2019

Table 55: The UK – Charge Card Total and Average Transaction Values by Channel, 2010–2019

Table 56: The UK – Number of Charge Cards in Circulation by Scheme (Thousand), 2010–2014

Table 57: The UK – Charge Card Transaction Values by Scheme (GBP Billion), 2010–2014

Table 58: The UK – Charge Card Transaction Values by Scheme (US$ Billion), 2010–2014

Table 59: The UK – Number of Commercial Cards in Circulation (Million), 2010–2019

Table 60: The UK – Commercial Card Transaction Values (GBP Billion), 2010–2019

Table 61: The UK – Commercial Card Transaction Values (US$ Billion), 2010–2019

Table 62: The UK – Card Fraud (GBP Million), 2010–2014

Table 63: The UK – Card Fraud (US$ Million), 2010–2014

Table 64: The UK – Number of Prepaid Cards in Circulation (Million), 2010–2019

Table 65: The UK – Prepaid Card Transaction Values (GBP Billion), 2010–2019

Table 66: The UK – Prepaid Card Transaction Values (US$ Billion), 2010–2019

Table 67: The UK – Merchant Acquiring Transaction Volumes by Channel (Billion), 2010–2019

Table 68: The UK – Merchant Acquiring Transaction Values (GBP Billion), 2010–2019

Table 69: The UK – Merchant Acquiring Transaction Values (US$ Billion), 2010–2019

Table 70: The UK – Acquirers’ Transaction Volumes (Million), 2010–2014

Table 71: The UK – Acquirers’ Transaction Values (GBP Billion), 2010–2014

Table 72: The UK – Acquirers’ Transaction Values (US$ Billion), 2010–2014

Table 73: The UK – Retail Outlets and Merchant Accounts (Thousand), 2010–2019

List of Figures

Figure 1: The UK – Payment Instrument Shares by Transaction Value (%), 2010 and 2014

Figure 2: The UK – Payment Instrument Shares by Transaction Volume (%), 2010 and 2014

Figure 3: The UK – E-Commerce Value (US$ Billion) and Payment Types (%)

Figure 4: The UK – Total Population and Structure, 2010–2019

Figure 5: The UK – Economic Indicators, 2010–2019

Figure 6: The UK – Number of ATMs, POS Terminals and Branch Banking Composition, 2010–2019

Figure 7: The UK – Retail Sales and Household Final Consumption Expenditure Per Capita, 2010–2014

Figure 8: The UK – Cards and Payments Industry Segmentation by Card Type, 2015

Figure 9: The UK – Growth in Payment Card Transaction Values and Number of Cards in Circulation by Type, 2010–2019

Figure 10: The UK – Volume and Value of Payment Card Transactions by Type (%), 2010–2019

Figure 11: The UK – Personal and Commercial Card, Transaction Volumes and Values (%), 2010–2019

Figure 12: The UK – Contactless Cards in Circulation, Transaction Values and Volumes, 2010–2015

Figure 13: The UK – Contactless Transactions: Debit Vs Credit Vs Charge Cards, September 2015

Figure 14: The UK – Total Vs Contactless Terminals (%), 2014 and 2015

Figure 15: The UK – Breakdown of Contactless Transactions (%), April 2015

Figure 16: The UK – Values and Volumes of Contactless Debit, Credit and Charge Card Transactions, 2010–2015

Figure 17: The UK – Growth in Debit Card Transaction Values and Number of Debit Cards in Circulation, 2010–2019

Figure 18: The UK – Pay Now, Average Interchange Fees: Intra-Network Transactions (%), 2010–2014

Figure 19: The UK – Pay Now, Average Merchant Service Charge: Domestic Transactions (%), 2010–2019

Figure 20: The UK – Debit Card Transaction Volumes and Values by Channel, 2010–2019

Figure 21: The UK – Debit Card Scheme and Issuer Shares in Terms of Transaction Value (%), 2014

Figure 22: The UK – Growth in Credit Card Transaction Values and Number of Credit Cards in Circulation, 2010–2019

Figure 23: The UK – Pay Later, Average Interchange Fees: Intra-Network Transactions (%), 2010–2014

Figure 24: The UK – Pay Later, Average Merchant Service Charge: Domestic Transactions (%), 2010–2019

Figure 25: The UK – Credit Card Transaction Volumes and Values by Channel, 2010–2019

Figure 26: The UK – Credit Card Scheme and Issuer Shares in Terms of Transaction Value (%), 2014

Figure 27: The UK – Growth in Charge Card Transaction Values and Number of Charge Cards in Circulation, 2010–2019

Figure 28: The UK – Charge Card Transaction Volumes and Values by Channel, 2010–2019

Figure 29: The UK – Charge Card Scheme Shares in Terms of Transaction Value (%), 2014

Figure 30: The UK – Number of Commercial Cards in Circulation and Transaction Value, 2010–2019

Figure 31: The UK – Shares of Various Types of Card Fraud in Terms of Transaction Value (%), 2010 and 2014

Figure 32: The UK – Number of Prepaid Cards in Circulation and Transaction Value, 2010–2019

Figure 33: The UK – Merchant Acquiring Transaction Volume and Value, 2010–2019

Figure 34: The UK – Acquirers’ Market Share in Terms of Transaction Volume and Value (%), 2014

Figure 35: The UK – Number of Retail Outlets and Total Merchant Accounts (Thousand), 2010–2019

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