England-based Retail Banking Research Ltd. says Italy is by far the largest European market for prepaid cards, with an estimated 8.2 million prepaid cards in circulation at the end of 2008, accounting for 9 percent of all cards in use in Italy at the end of 2008. And RBR expects that dominant prepaid-card use to continue in Italy.
RBR found that cash is still generally only used for low-value payments in Italy, while prepaid is seen as the most effective alternative, particularly by young people and the unbanked. In no other western European market do such cards represent more than 2 percent of the total, RBR says.
In its latest edition of the biennial western European payment cards report, "Payment Cards Western Europe 2010," RBR reports on key payments findings from 17 European countries.
Overall, the number of payment cards in western Europe increased 5 percent from 2007 to 2008, and now totals 866 million cards. The debit card sector has contributed the most to that increase.
Prepaid cards reach 9 million across the region
Prepaid cards have become increasingly popular across western Europe, with the payment medium being issued in 14 of the 17 markets covered in RBR's report. Prepaid card numbers reached more than 9 million at the end of 2008. These cards were responsible for a significant proportion of the growth in the number of debit cards in the region between 2007 and 2008.
Pay-later cards static because of recession
Story continues below...
Engage Customers with Strategic ATM Marketing
So, you’ve taken the plunge and launched one or more targeted offers at the ATM. But, are you getting those 20% take-up rates you were hoping for? Phoenix customers are. Find out five ways to drive more revenue with ATM marketing.
The market shares of the three card types — debit, charge and credit — have remained broadly static since 2007. Over the past year, debit cards have gained a little market share, partially because of growth in prepaid cards, while the shares of charge and credit cards have fallen; overall, however, the mix has been fairly stable. The lack of growth in the share of pay-later cards can mainly be attributed to the financial crisis.
The United Kingdom credit card market, which is still the largest in the region, accounting for 29 percent of credit cards, has continued to decline as a result of the credit crisis.
Card growth highest in Italy
Overall, the western European payment cards market grew by 42 million cards between 2007 and 2008. All of the markets surveyed saw an increase in total card numbers over this period, with the exception of The Netherlands, where the number of cards fell because of the downturn of the economy and the closure of inactive card accounts.
Italy showed the highest growth — the result of a surge in the number of prepaid cards. Card numbers in Italy increased overall by 16 percent.
Norway, Turkey and Ireland also saw cards growth of 10 percent or more in 2008. In Ireland, growth was driven almost entirely by the debit sector and a marketing campaign aimed at the 18- to 24-year-old age group, which has traditionally had very low cardholding in the country.
U.K. and France account for 44 percent of card payments
The number of payments made with cards in western Europe totaled 33 billion in 2008, an increase of 8 percent from 2007. The U.K. and France together accounted for 44 percent of all card payments in the region in 2008, with 7.8 billion and 6.6 billion transactions, respectively.
The average number of payments per adult in the region also has increased, with adults making an average of 81 card payments in 2008, up from 77 in 2007.
Number of EFTPOS terminals approaches 10 million
By the end of 2008, 9.6 million EFTPOS terminals had been deployed in western Europe, representing an increase of 10 percent from the year before. Turkey's installed base of terminals grew the most, mirroring the rapid expansion of the country's card base. Greece has the highest density of EFTPOS terminals to population, because of Greece's popularity as a holiday destination.
And despite strong growth in smaller markets, the top six markets still account for 80 percent of the region's terminals.
Drivers for the growth in the number of EFTPOS terminals include increased card acceptance in public administration sectors, as well as at smaller retailers and kiosks. The spread of handheld terminals across the region in specific sectors (notably bars and restaurants) also has driven growth.
