The UK payment card market is dynamic and ever shifting, as issuers adopt different strategies to compete in a difficult environment. Featuring detailed consumer data and an overview of economic conditions, this brief provides up to the minute intelligence on how all of the competitors in the UK market are performing, with granular market share data and analysis of the key market developments.
Features and benefits
Benchmark your performance against UK issuers across metrics including number of cards, frequency of use, transactions, and balances outstanding.
Plan your product strategy around analysis of consumer behaviour at the issuer level, from Datamonitor’s Financial Services Consumer Insight survey.
Get the latest up to date information on the private label and prepaid card markets to understand the wider UK card payment space.
Know the competition with real world examples of the strategies being followed by the markets leading players.
Plan accordingly with insight of the latest economic indicators including consumer confidence, and card write off levels.
Plan your product strategy around analysis of consumer behaviour at the issuer level, from Datamonitor’s Financial Services Consumer Insight survey.
Get the latest up to date information on the private label and prepaid card markets to understand the wider UK card payment space.
Know the competition with real world examples of the strategies being followed by the markets leading players.
Plan accordingly with insight of the latest economic indicators including consumer confidence, and card write off levels.
Highlights
Despite the severity of the economic downturn in 2009 and the weak economic recovery in 2010, the UK payment card market remains relatively stable. Very few players have left the market, and competitive positionings remain largely unchanged. However, the pay later card market is now shrinking with falls across all market indicators.
The credit card market remains dominated by Barclaycard and Lloyds. Barclaycard is the largest single brand with 8.7 million cards in issue, while Lloyds remains the biggest issuer across all of its brands with 12.6 million cards in issue. Even these players however have seen a sharp decline in card numbers between 2008 and H1 2010.
The debit card market continues to be the key driver of the UK payment card market and has seen no slowdown in growth as a result of the recession. Santander has now become the UK’s biggest debit card issuer, following its brand consolidation and aggressive acquisition strategies with 10.6 million cards in issue.
Your key questions answered
Who are the key players in the debit, credit, charge, prepaid and private label card markets? How are they adapting to todays market conditions?
Who is gaining market share in this challenging economic environment? Who is losing?
What strategies are issuers taking to protect themselves from falling levels of demand? How sustainable is this long term?
Is consumer behaviour and card usage changing? What impact is the economy having on how consumers use their payment cards?
Are revolve rates falling? Which cards are consumers using the most?
Who is gaining market share in this challenging economic environment? Who is losing?
What strategies are issuers taking to protect themselves from falling levels of demand? How sustainable is this long term?
Is consumer behaviour and card usage changing? What impact is the economy having on how consumers use their payment cards?
Are revolve rates falling? Which cards are consumers using the most?
OVERVIEW
o Catalyst
o Summary
o Catalyst
o Summary
* COMPETITOR MARKET SHARES
o Lloyds Banking Group is still the largest credit card issuer by number of cards
+ Barclaycard-branded cards hold a steady 16.3% share of the market
+ Barclaycard has the largest portfolio of primary cards
+ Premium branded cards continue to constitute a significant share of the market
+ Usage and primacy rates are driven by card features
+ The number and value of transactions per issuer is broadly in line with market share
+ Transaction values grew by 2.3% in 2010
+ Frequency of use is consistent across most card issuers
+ Retail branded cards are generally used more frequently according to consumers
o Balances fell for most issuers in 2010
+ Lloyds Banking Group holds 21.9% of balances by issuing group
+ Virgin Money holds the highest average balance per card
+ Repayment rates are significantly higher for cards providing incentives for transacting
o The debit card market is led by the major high street retail banks
+ Barclays is the largest debit card issuer with over 11 million cards in 2010
+ POS accounts for the majority of debit transactions by volume
+ £67.9bn was spent by consumers on Barclays debit cards in 2010
+ Consumers spent an average of £52.90 per debit card transaction in 2010
o There were 5.3 million charge cards in issue in 2010
+ The value of charge card transactions grew by 3.2% in 2010
+ Average transaction values and frequency of use are broadly consistent across charge card issuers
* COMPETITOR DEVELOPMENTS
o The largest issuers are adapting in different ways
o Key competitor developments
+ MBNA is exiting the UK cards market
+ Lloyds Banking Group remains focused on product development
+ Barclaycard is the most aggressive UK cards player
+ HSBC is focused on less risky existing customers
+ Tesco Bank continues to see steady growth
o New regulations have increased transparency and forced increased competition
+ Legislation has been a major driver in increasing competition
+ The CCD increases transparency and means issuers cannot rely on overly complex schemes
+ Regulatory changes to the order of payments are having the biggest impact on issuer revenue
o Competition is increasing in the balance transfer market
+ The balance transfer market has seen the fiercest competition as issuers lengthen their 0% interest period
+ Increased competition has delayed the possible introduction of annual fees
o Lloyds Banking Group is still the largest credit card issuer by number of cards
+ Barclaycard-branded cards hold a steady 16.3% share of the market
+ Barclaycard has the largest portfolio of primary cards
+ Premium branded cards continue to constitute a significant share of the market
+ Usage and primacy rates are driven by card features
+ The number and value of transactions per issuer is broadly in line with market share
+ Transaction values grew by 2.3% in 2010
+ Frequency of use is consistent across most card issuers
+ Retail branded cards are generally used more frequently according to consumers
o Balances fell for most issuers in 2010
+ Lloyds Banking Group holds 21.9% of balances by issuing group
+ Virgin Money holds the highest average balance per card
+ Repayment rates are significantly higher for cards providing incentives for transacting
o The debit card market is led by the major high street retail banks
+ Barclays is the largest debit card issuer with over 11 million cards in 2010
+ POS accounts for the majority of debit transactions by volume
+ £67.9bn was spent by consumers on Barclays debit cards in 2010
+ Consumers spent an average of £52.90 per debit card transaction in 2010
o There were 5.3 million charge cards in issue in 2010
+ The value of charge card transactions grew by 3.2% in 2010
+ Average transaction values and frequency of use are broadly consistent across charge card issuers
* COMPETITOR DEVELOPMENTS
o The largest issuers are adapting in different ways
o Key competitor developments
+ MBNA is exiting the UK cards market
+ Lloyds Banking Group remains focused on product development
+ Barclaycard is the most aggressive UK cards player
+ HSBC is focused on less risky existing customers
+ Tesco Bank continues to see steady growth
o New regulations have increased transparency and forced increased competition
+ Legislation has been a major driver in increasing competition
+ The CCD increases transparency and means issuers cannot rely on overly complex schemes
+ Regulatory changes to the order of payments are having the biggest impact on issuer revenue
o Competition is increasing in the balance transfer market
+ The balance transfer market has seen the fiercest competition as issuers lengthen their 0% interest period
+ Increased competition has delayed the possible introduction of annual fees
* APPENDIX
o Definitions
+ AAGR
+ Affinity card
+ APACS
+ ATM-only card
+ Average transaction value
+ Balances outstanding
+ Bank of England base rate
+ CAGR
+ Charge card
+ Co-branded card
+ Credit card
+ Debit card
+ FLA
+ Frequency of use
+ Non-standard
+ Private label card
+ POS terminal
+ Turnover per card per year
o Methodology
+ Primary research
+ Secondary research
o Further reading
o Ask the analyst
o Disclaimer
o Definitions
+ AAGR
+ Affinity card
+ APACS
+ ATM-only card
+ Average transaction value
+ Balances outstanding
+ Bank of England base rate
+ CAGR
+ Charge card
+ Co-branded card
+ Credit card
+ Debit card
+ FLA
+ Frequency of use
+ Non-standard
+ Private label card
+ POS terminal
+ Turnover per card per year
o Methodology
+ Primary research
+ Secondary research
o Further reading
o Ask the analyst
o Disclaimer
* TABLES
o Table: Percentage of cards with benefits, by brand (one of two)
o Table: Percentage of cards with benefits, by brand (two of two)
o Table: Percentage of cards with benefits, by brand (one of two)
o Table: Percentage of cards with benefits, by brand (two of two)
* FIGURES
o Figure: Lloyds Banking Group leads the market with 11.4 million credit cards in issue
o Figure: Barclaycard is the largest player by brand ahead of both Lloyds TSB and HBOS
o Figure: 72% of Tesco Bank cards are considered primary by cardholders
o Figure: Barclaycard has 4.5 million primary cards in the market
o Figure: Barclaycard has 3.5 million platinum cards in issue
o Figure: Barclaycard had 305 million transactions in 2010
o Figure: Transaction values are dominated by Barclaycard and Lloyds TSB
o Figure: The average credit card has 32 transactions per year
o Figure: On average, only 24% of cards are used “all the time” according to cardholders
o Figure: Barclaycard holds the highest value of balances outstanding at £10.1bn in 2010
o Figure: Lloyds Banking Group holds 21.9% of the market by balances outstanding
o Figure: Virgin Money holds an average balance of £2,397
o Figure: 74% of American Express credit cardholders pay off their balance in full each month
o Figure: The number of debit cards grew to reach 84.6 million cards in2010
o Figure: Lloyds Banking Group holds 25% of the UK debit card market
o Figure: Debit cards are used more often at the POS than at ATMs
o Figure: POS accounts for 60% of all debit transactions by value
o Figure: Consumers spent an average of £52.90 across all types of debit transactions in 2010
o Figure: 2.7 million American Express charge cards were in issue in 2010
o Figure: £19.4bn was spent on American Express charge cards in 2010
o Figure: NatWest holds the highest average charge card transaction value at £119
o Figure: Barclaycard’s market leading balance transfer offers resulting from the price war
o Figure: Lloyds TSB platinum credit card advert with representative example
o Figure: Lloyds Banking Group leads the market with 11.4 million credit cards in issue
o Figure: Barclaycard is the largest player by brand ahead of both Lloyds TSB and HBOS
o Figure: 72% of Tesco Bank cards are considered primary by cardholders
o Figure: Barclaycard has 4.5 million primary cards in the market
o Figure: Barclaycard has 3.5 million platinum cards in issue
o Figure: Barclaycard had 305 million transactions in 2010
o Figure: Transaction values are dominated by Barclaycard and Lloyds TSB
o Figure: The average credit card has 32 transactions per year
o Figure: On average, only 24% of cards are used “all the time” according to cardholders
o Figure: Barclaycard holds the highest value of balances outstanding at £10.1bn in 2010
o Figure: Lloyds Banking Group holds 21.9% of the market by balances outstanding
o Figure: Virgin Money holds an average balance of £2,397
o Figure: 74% of American Express credit cardholders pay off their balance in full each month
o Figure: The number of debit cards grew to reach 84.6 million cards in2010
o Figure: Lloyds Banking Group holds 25% of the UK debit card market
o Figure: Debit cards are used more often at the POS than at ATMs
o Figure: POS accounts for 60% of all debit transactions by value
o Figure: Consumers spent an average of £52.90 across all types of debit transactions in 2010
o Figure: 2.7 million American Express charge cards were in issue in 2010
o Figure: £19.4bn was spent on American Express charge cards in 2010
o Figure: NatWest holds the highest average charge card transaction value at £119
o Figure: Barclaycard’s market leading balance transfer offers resulting from the price war
o Figure: Lloyds TSB platinum credit card advert with representative example
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