News
MasterCard, Visa payment card share rising in Europe
A new study by RBR finds that 90 percent of the euros spent via payment card in Europe were on a Visa or MasterCard-branded card — the highest share of any region.
December 8, 2015
With domestic and private label card schemes on the decline, international players MasterCard and Visa now account for 86 percent of all payment cards in Europe, according to a new RBR report, "Global Payment Cards Data and Forecasts to 2020."
According to a news release, RBR statistics show that 90 percent of the euros spent via payment card in Europe were on a Visa or MasterCard-branded card — the highest share of any region.
There were 1.5 billion payment cards in circulation in Europe at the end of 2014, and these were used for payments valued at 2.9 trillion euros ($3.16 trillion) during the year.
Competition between the two leading schemes is fierce, with very little difference between Visa and MasterCard in terms of card numbers. With regard to payment value, however, Visa is by far the larger scheme, and gained a percentage point of value share in 2014, while MasterCard lost a percentage point.
An equal share of card numbers
With 42.9 percent of payment cards in issue in Europe, Visa is slightly ahead of MasterCard (42.6 percent). MasterCard’s share rose from 41.9 percent in 2013, as a result of a strong performance in a number of markets including Russia and Ukraine, as well as the Nordic and Baltic countries, while Visa’s share remained largely unchanged, RBR found.
The company's figures show that Visa is the largest scheme in 19 countries in the region, while MasterCard is the largest in the remaining 14.
The other international schemes — American Express, Discover, JCB and UnionPay — account for less than 2 percent of the regional card base, unchanged since 2013.
A significant, though declining, proportion of cards are domestic bank card schemes or private label cards. The former are numerous in Russia and to a lesser extent Ukraine, which together account for more than 80 percent of such cards in the region, RBR said.
Meanwhile, the largest European markets for private label cards are France, Spain, Germany and the U.K., which make up three-quarters of the region’s private label sector. Such cards are, however, being progressively replaced by those carrying an international brand.
Disparity in value of card payments
Visa accounts for 54 percent of card expenditure, as payment cards are used frequently in several of the markets where Visa cards are predominant, including France and the U.K. Furthermore, Visa has a high share of debit cards in the region, which are typically used more than credit cards.
The markets where the RBR report showed MasterCard to have gained share of card numbers include Russia and Ukraine, where cards are used for fewer than 25 payments per year on average — one reason why MasterCard’s share in card numbers does not translate into a greater share in value.
American Express and Discover both account for a somewhat higher share of value than because they are typically used for relatively high-value payments. In contrast, domestic and private label cards account for a lower share, and their share of value declined in 2014.
This is because domestic cards, such as those issued in Russia, are used infrequently. The same applies to private label cards whose limited acceptance network generally restricts their use even though they are often used for high-value payments.
The effect of Europe's new fee caps
Card schemes will be less able to compete on interchange fees than in the past due to new EU interchange caps of 0.2 percent for debit cards and 0.3 percent for credit cards.
RBR believes that portfolio gains will instead be based on factors such as service levels and scheme fees, meaning that competition between the card schemes in the region will be as intense as ever.
