Payment Cards in Australia 2006

Published by: Datamonitor

Published: Oct. 27, 2006 - 89 Pages

Table of Contents

CHAPTER 1 INTRODUCTION

What is this report about?

Who is the target reader?

How to use this report?

Definitions

Datamonitor's Cards and Payments Knowledge Centre

CHAPTER 2 MARKET CONTEXT

Key findings:

The Economy

GDP and GDP per capita

Inflation

Distribution of income (GINI Coefficient)

Sectoral composition of the economy

Demographics

Market size

Payment cards in the context of consumer credit

Housing and consumer credit have grown rapidly in recent years at a combined rate of more than 16% compounded annually

Credit card debt is growing more slowly than household debt

'Pay-later' card statistics

The number of credit cards in Australia reached 14.8 million in 2005

Transactions on credit cards in Australia exceeded A$140 billion at the end of 2005

'Pay-now' statistics

There were 27.8 million debit cards in Australia in 2005

The number of purchases made via debit cards exceeded the 1.2 billion mark at the end of 2005

Market Infrastructure

ATM statistics

POS statistics

Branches

Regulatory environment

Industry regulators

Australian Prudential Regulation Authority (APRA)

The Reserve Bank of Australia (RBA)

Australian Competition and Consumer Commission (ACCC)

Industry associations

Australian Payments and Clearing Association (APCA)

Credit bureaux

Regulatory issues in the market

Credit card interchange

Debit card interchange

CHAPTER 3 COMPETITOR AND PRODUCT OVERVIEW

Key findings

Card scheme market shares

In terms of the number of cards, EFTPOS is the dominant player in the 'pay now' card market while Visa leads the 'pay later' market

EFTPOS dominates the debit card market although Visa debit exhibits strong growth in the number of cards issued

Visa dominates the 'pay later' market

Card issuer market shares

Debit card market shares

Credit card market shares

In terms of the number of cards issued, CBA was the clear market leader

In terms of the balances outstanding on credit cards, the major banks continued to dominate the market although domestic banks face stiff competition from international players

Competitor developments

Competitive developments in the credit card market

The co-branded cards

The low-rate cards

Co-branded and low-rate card combination

Competitive developments in the debit card market

Competitive developments in the private-label card market

Competitive developments in the prepaid card market

The Bopo prepaid card has several advantages over the existing payment card options in Australia

The Bopo card is likely to be popular if it exploits its advantages

CHAPTER 4 FORECASTING THE PAYMENT CARD MARKET

Forecasts for the debit card market

Forecasts for the credit card market

CHAPTER 5 APPENDIX

Supplementary data

Definitions

Balances outstanding

AAGR

CAGR

Charge card

Credit card

Debit card

EFTPOS

Interchange

Visa Debit

Future readings

Relevant links

Datamonitor's custom research capabilities

SPP writing team

List of Tables

Table 1: The GINI Index indicates that Australia and New Zealand have a more equal income distribution than Singapore and Hong Kong although they are behind major Eastern and Western European countries

Table 2: The interchange fee for the four-party schemes at October 2000 and September 2006

Table 3: In terms of balances outstanding, HSBC was the biggest gainer while NAB lost the most ground in the market. This refers to the December 2004 - June 2006 period

Table 4: 16 credit cards were launched over the last twelve months with most being introduced over the October 2005 - February 2006 period

Table 5: Macroeconomic variables, 2006-2010 period

Table 6: GDP of Australia, Hong Kong, New Zealand and Singapore, 2001-2005

Table 7: Inflation rates for Australia, Hong Kong, New Zealand and Singapore, 2001-2005

Table 8: Australia's population by age, 2001-2005

Table 9: Australian lending, 2001-2005

Table 10: Credit card and household credit aggregates, 2001-2005

Table 11: Credit card statistics, 2002-2005

Table 12: Number of debit cards, 2002-2005

Table 13: Debit card transactions, value and number, 2001-2005

Table 14: Market infrastructure statistics, June 2001-June 2005 period

Table 15: Number of top 13 banks offering low-rate credit cards and when the cards were introduced

Table 16: Visa and EFTPOS debit card statistics, 2002-2005

Table 17: Credit card market shares by scheme, 2002-2005

Table 18: Market shares of debit cards, 2003-2005 period

Table 19: Market share of issuers in terms of the number of credit cards

Table 20: Market shares of balances outstanding per bank, 2004-June 2006

Table 21: Balances outstanding per bank, 2004 - June 2006

Table 22: Forecasted statistics for the debit and credit card markets, 2006-2010

List of Figures

Figure 1: Real GDP grew steadily over the 2001-2004 period although since then it has dropped away - in some cases significantly

Figure 2: Across the four countries, GDP per capita grew at a steadier rate than real GDP

Figure 3: Over the 2001-2005 period, inflation rates have varied across the region with Australia and New Zealand experiencing similar inflationary trends. Hong Kong's inflation was mostly negative, while Singapore's inflation was mostly positive over most of the period

Figure 4: Australia's population remained relatively steady over the 2001-2005 period, with a slight trend towards the aging population

Figure 5: Over the 2001-2005 period, consumer credit increased by 16.2% compounded annually. Consumer credit is made up of both housing and 'other personal' lending, of which housing grew at 17.1% and personal lending grew by 11.6% compounded annually

Figure 6: Credit card balances as a proportion of total household credit aggregates have fallen over the 2001-2005 period

Figure 7: The number of credit cards increased by 20.7% over the 2002-2005 period

Figure 8: The value of transactions increased from A$105.0 million in 2002 to A$140.9 million in 2005

Figure 9: The number of debit card accounts have grown at an average annual rate of 2.0% over the 2002-2005 period

Figure 10: The average annual growth rate of debit card transactions was 9.8% over the 2002-2005 period

Figure 11: Over the 2001-2005 period, the average annual growth rate for the number of ATMs was 16.1% compared to 8.2% for EFTPOS terminals. There was an increase of just 50 ADI branches over the same period

Figure 12: Visa debit cards have seen strong growth, increasing by 24.2% over 2004-2005 period, while EFTPOS cards have grown at a rate of 2.4% over the same period

Figure 13: Over the 2002-2005 period, Visa and Bankcard lost market share of credit cards while MasterCard and American Express increased their shares

Figure 14: At the end of 2005, CBA was the largest issuer of debit cards in Australia, followed by Westpac and NAB

Figure 15: In terms of the number of cards, CBA was the dominant player in the credit card market at the end of 2005

Figure 16: In terms of balances outstanding, the biggest gainer was HSBC which increased its market share by 55.9%, while the biggest loser was NAB which lost 12.9% of its market over the December 2004 - June 2006 period

Figure 17: NAB's two Velocity cards are too expensive and the point redemption is far lower than that available on the Velocity program which is free to join

Figure 18: The advertising on the Earth cards' website highlights that this card is cheaper and better value than those already in the same market such as ANZ's Frequent Flyer card

Figure 19: The 'Bopo' card is expected to fill a gap in the Australian cards market

Figure 20: The number of debit cards will rise from 27.8 million in 2005 to 30.7 million in 2010

Figure 21: The number of credit cards are expected to grow from 14.8 million in 2005 to 17.4 million at the end of 2010

Figure 22: Balances outstanding are expected to increase from A$31.3 bn in 2005 to A$53.0 bn in 2010

Figure 23: The value of credit card transactions is expected to rise from A$140.9 bn in 2005 to A$195.0 bn in 2010

Figure 24: Datamonitor's core consulting capabilities

Abstract

• This report discusses the continued growth of the Australian card markets and provides further evidence of how rapid this growth has been.
• Competitor market share data for the credit card market is provided, by cards in issue and balances outstanding, for the period 2001-2005.
• Forecasts for the credit, debit, charge, and private label markets are provided for the period 2006-2010.

• This report is the most established and highly regarded in the market. It provides exclusive competitor share data not available from any other source
• It provides in-depth coverage of the key issues facing the market, along with the views of Datamonitor's Cards and Payments Team
• Complete market data and five year forecasts are provided in Excel format for ease of use

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