Competitor market shares and developments in the UK Plastic Card Market
Datamonitor
August 21, 2009 51 Pages - SKU: DFMN2429969
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Countries covered: United Kingdom
Introduction
The UK payment card market is dynamic and ever shifting, as issuers adopt different strategies to compete. Featuring detailed consumer data for the very first time, 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.
Scope- Includes figures for all of the major UK credit issuers including number of cards, frequency of use, transaction values,and balances outstanding.
- Features detailed consumer behaviour data at the card issuer level, from Datamonitor's proprietary Financial Services Consumer Insight survey
- This brief includes up to date information on changes within the private label and prepaid cards markets.
- An analysis of the key developments in UK plastic cards is included, with real world examples of the strategies being followed by the leading players.
Highlights
Lloyd's Group has now become the leading player in the UK credit card market following its acquisition of HBOS. However Lloyd's faces stiff competition from more pro-active players such as Barclaycard and Tesco Personal Finance.
Consumer behaviour data shows that cards that incentivise consumer have higher usage rates, particularly for day-to-day transactions. However these cards also hold higher repayment levels, limiting their profitability for issuers.
While up to 50% of Barclaycard cardholders pay off their balance in full each month, repayment rates range from 83% to 18% across different issuer brands. With unemployment growing repayment levels are likely to drop in the near term, with up to 6% of cardholders reporting they made no payments on their balances outstanding in June 2009
Reasons to Purchase- Stay ahead of the competition with up to date market data on all of the major UK issuers in credit, debit, private label, and prepaid cards.
- Delve deeper into realworld cardholder behaviour and understand not just what cards consumers have, but what they do with them.
- Move with the market by understanding what todays market leaders are doing, and how others are adapting to a changing environment.
Please note: this is delivered as a Zip file.
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- Overview
- Catalyst
- Summary
- Methodology
- Table of Contents
- Table of figures
- Table of tables
- Competitor Shares and Developments in the UK Card Market
- Lloyds Group is now the largest credit card issuer by cards in issue
- Barclaycards remains by far the dominant credit card brand
- Barclaycard has the largest portfolio of 'primary' cards
- The number of standard and premium cards by brand highlights the largest issuers' mass market strategy
- Usage and primacy rates are driven by card features
- The number and value of transactions per issuer is broadly in line with market share
- Usage rates are low for most cards despite high rates of primacy
- Lloyds Group has the highest value of balances outstanding
- Not surprisingly, Citigroup and MBNA continue to have the highest balance per card on average
- Repayment rates are significantly higher for cards providing incentives for transacting
- The debit card market is led by the major high street retail banks
- Barclays' leads the market, with 9.9 million debit cards in issue
- Debit is growing strongly in day to day use
- Santander now leads the private label card market
- Private label usage rates are likely to drop as a result of the recession
- Prepaid cards have strong growth potential, but are likely to remain niche
- Barclaycard, Tesco Personal Finance and Santander have performed strongly in 2009
- Barclaycard is pushing forward in creating incentives for card usage
- Barclaycard is leading the market in developing contactless payments
- Barclaycard is developing a new loyalty program
- Barclaycard is forming strategic partnerships with key brands and service providers
- Tesco Personal Finance is poised for strong growth as it moves to become a bank
- Santander will expand in the cards market, to the detriment of MBNA
- Card issuers must choose between diversifying and refocusing on core strengths
- Appendix
- 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
- Methodology
- Primary research
- Secondary research
- Further reading
- Ask the analyst
- Datamonitor consulting
- Disclaimer
- List of Tables
- Table 1: Consumer perceptions of the features on their credit card by brand
- Table 2: UK prepaid cards by number of cards in issue by brand and issuing group
- Table 3: Prepaid transaction by type, frequency, value and average balance per card per year
- Table 4: Current relevant publications, 2008-09
- Table 5: Future relevant publications, 2009
- List of Figures
- Figure 1: Following the merger with HBOS, Lloyds now dominates the market
- Figure 2: The newly formed Lloyds Group is now the UK market leader with 22.3% of cards in issue in H1 09
- Figure 3: Barclaycard is the largest player by brand ahead of both Lloyds TSB, and HBOS
- Figure 4: Barclaycard by far has the highest number of primary cards in the market
- Figure 5: Tesco and John Lewis/Waitrose are the primary card for more than 75% of their customers
- Figure 6: 40% of Barclaycard's cards in issue are premium branded
- Figure 7: There were 278 million transactions made on Barclaycard branded credit cards in 2008, ahead of NatWest and Lloyds TSB branded products
- Figure 8: Transaction values follow a very similar pattern to transaction numbers, with Barclaycard and NatWest leading the market in 2008
- Figure 9: Regardless of total transaction values, average spend per transaction is highly variable
- Figure 10: Tesco and American Express have the highest proportion of cards that are used all the time
- Figure 11: Lloyds Group now has the highest level of balances outstanding, followed closely by MBNA
- Figure 12: Lloyds holds 21% of the market by balances outstanding but is closely followed by MBNA at 20%
- Figure 13: Citigroup has the highest average balance per card, growing 30% since June 2007
- Figure 14: Repayment rates are higher for cards with rewards and incentives, with cardholder most likely to revolve on Virgin Money and MINT cards
- Figure 15: The number of debit cards in issue has increased in H1 2009
- Figure 16: The debit card market is evenly divided between the dominant big leading banks
- Figure 17: POS makes up more than 70% of all debit transactions by volume
- Figure 18: POS accounts for 60% of all debit transactions by value
- Figure 19: Average spend levels are highly variable by issuer
- Figure 20: Santander is by far, the dominant issuing group of private label cards as at H1 2009
- Figure 21: Debenhams is the leading brand for private label store cards
- Figure 22: The private label sector is fragmented, with Debenhams leading with a 17% market share
- Figure 23: The overall number of cancelled private label cards in the UK market is high
- Figure 24: With the highest brand awareness, Virgin and PayPal lead the prepaid cards market
- Figure 25: The prepaid cards sector is dominated by four issuers accounting for 75% of the market
- Figure 26: POS dominates prepaid card usage, with £5.5 billion of POS transactions in 2008
- Figure 27: Barclaycard used viral marketing techniques as part of its campaign
- Figure 28: MyBarclaycard will offer users in-depth online card management services
- Figure 29: Barclaycard is strengthening its branding with younger consumers through strategic sponsorship
- Figure 30: The Santander rebranding of Abbey has begun in London
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