Payment Cards in the Netherlands 2006

Published by: Datamonitor

Published: Nov. 16, 2006

Table of Contents

EXECUTIVE SUMMARY

INTRODUCTION

What is this brief about?

Scope of the brief

Structure of the brief

MARKET CONTEXT

Country overview

Demographics

Economy

GDP

Inflation

Distribution of income (GINI Coefficient)

Market size

Cards in issue

Market Penetration

Number of transactions

Frequency of use

Value of card transactions

Average transaction values

Balances outstanding

Card acceptance

POS statistics

ATM statistics

Market structure

Retail banks

The retail banking market is highly concentrated

Interbank structures for cards

Regulatory environment

Regulatory bodies

De Nederlandsche Bank - DNB

Netherlands Authority for the Financial Markets - AFM

Banking associations

Nederlandse Vereniging van Banken - NVB

Other noteworthy associations

Vereniging van Financierings ondernemingen in Nederland - VFN

Credit bureaux

Bureau Krediet Registratie - BKR

Experian Nederlands

Regulatory issues in the market

European consumer credit directive

Key issues

Fraud and EMV

Netherlands is lagging behind in the conversion to EMV

Migration has been slow due to lack of a business case

SEPA

COMPETITOR AND PRODUCT OVERVIEW

Card scheme market shares

Pay now cards

Credit cards

Deferred debit and charge cards

Card issuer market shares

Pay now cards

Credit cards

Charge and deferred debit cards

Competitor developments

New market entry

The launch of a monoline player has put ING in a strong position for further cross-border activity

Consolidation in the Netherlands

There has been little in the way of consolidation in the Netherlands since the early 1990s

ABN Amro acquires controlling stake in Italy's Banca Antonveneta

Product analysis

Pay later card design

Annual fees are commonplace, and are on the front line in price competition

Purchase insurance is added to some packages

Credit limits

Loyalty programs

ING Card offers its 'Shop' - a club loyalty program

American Express' Membership Rewards program allows points to be exchanged for goods and services

Product innovation

Greencard is an innovative product targeted at the environmentally conscious

ING Card Easy is aimed at consumers unfamiliar with credit

FORECASTING THE PAYMENT CARD MARKET IN THE NETHERLANDS

Forecasting the pay now card market

Forecasting the credit card market

Forecasting the charge and deferred debit card market

SWOT Analysis

Strengths

Weaknesses

Opportunities

Threats

APPENDIX

Supplementary data

Market context

Definitions

Affinity Card

Credit Card

Deferred debit/charge card

EMV

EPC

ePurse

Interchange

Merchant Service Charge

Pay now cards

PoS Terminal

Research methodology

Cards and Payments database

Future Readings

Datamonitor's custom research capabilities

Cards & Payments Team contact details

How to contact experts in your industry

List of Tables

Table 1: Population distribution by age group in The Netherlands, 2005

Table 2: GDP per capita for selected European countries, 2005

Table 3: Inflation rates in a number of major European markets, 2001 - 2005

Table 4: Income distribution in The Netherlands is less even than average

Table 5: EMV migration in the Netherlands, June 2005

Table 6: Product details of selected pay later card products in the Netherlands, 2006

Table 7: Rates of tree replacement per type of expenditure on Greencard, 2006

Table 8: Datamonitor's forecast of the pay now card market, 2006f-2010f

Table 9: Datamonitor's forecast of the credit card market, 2005f-2009f

Table 10: Datamonitor's forecast of the charge and deferred debit card market, 2006f-2010f

Table 11: Population numbers and demographic splits in the Netherlands and other major European countries, 2005

Table 12: The percentage of people over the age of 20 in the major European countries, 2005

Table 13: GDP at current prices across major European countries, 2005

Table 14: Real GDP growth rates, 2001-2005

Table 15: POS terminals and population per terminal in the Netherlands, 2000-2004

Table 16: ATMs and population per ATM in the Netherlands, 2000-2004

Table 17: Current relevant datamonitor publications

Table 18: Future relevant Datamonitor publications, 2006

List of Figures

Figure 1: The Netherlands: Key statistics

Figure 2: The Netherlands has the sixth largest population in Europe, 2005

Figure 3: The Netherlands is the sixth largest country in Europe in terms of absolute GDP, 2005

Figure 4: The service sector is the most important contributor to the economy of the Netherlands, 2005

Figure 5: The Netherlands has been one of the weakest performing economies in Europe, 2001-2005

Figure 6: Pay now cards dominate the payment card market in the Netherlands, 2001-2005

Figure 7: The Netherlands has the fourth highest level of cards per capita in Europe.

Figure 8: Transaction numbers are dominated by pay now cards, 2001-2005

Figure 9: Pay now cards are used with far greater frequency than pay later products, 2001-2005

Figure 10: Pay now cards dominate overall transaction values and account for a rising share of the total, 2001-2005

Figure 11: Average transaction values are highest on credit cards, 2001-2005

Figure 12: The POS network in the Netherlands is limited, 2000-2004

Figure 13: ATM provision is also limited in the Netherlands, 2000-2004

Figure 14: Regulatory overview of the Netherlands, 2005

Figure 15: The pay now card market in the Netherlands is entirely controlled by Maestro, 2001-2005

Figure 16: Maestro accounts for the entire pay now card market in the Netherlands, 2001-2005

Figure 17: MasterCard accounts for the largest share of the credit card market, a share that has increased over time, 2001-2005

Figure 18: MasterCard also dominates credit card transaction values, 2001-2005

Figure 19: MasterCard and Visa dominate the charge and deferred debit card space, 2001-2005

Figure 20: MasterCard and Visa also dominate in terms of transaction values, 2001-2005

Figure 21: Rabobank is the leading issuer in the pay now card market, 2005

Figure 22: ING is the leading issuer in the credit card market, 2005

Figure 23: ING and Rabobank dominate the charge and deferred debit card market, 2005

Figure 24: The ING Card shop offers a range of discounts and offers to ING cardholders

Figure 25: As it is a mature market, the pay now market will experience modest growth to 2010

Figure 26: Both the number of cards and the number of transactions are going to drive the credit card market, 2005f - 2010f

Figure 27: The number of deferred debit/charge cards in issue will fall from 2008

Figure 28: SWOT analysis of the payment card market in the Netherlands, 2006

Figure 29: Datamonitor's core consulting capabilities

Abstract

Payment Cards in the Netherlands is an invaluable guide to one of the most interesting markets in Europe. Created using a combination of secondary and primary research, this report provides statistics on market size, competitor market shares and acceptance. It also provides an overview of regulation, competitor activities and product innovation. Concludes with market forecasts and a SWOT analysis.

• The focus of the report is on consumer payment cards, as opposed to commercial products.
• Data and analysis provided on debit cards, charge and deferred products, and revolving credit cards.
• The report parameters extend to card issuance only. Merchant acquiring and card processing are not covered.
• Historic market data is presented for 2001-2005, with forecast data presented to 2010. Competitor shares for card issuers are presented for 2005.

At 1.55 cards per head, penetration in the Netherlands is the second highest in Europe. This shows that the market as a whole is relatively mature. It also shows us that the population is generally comfortable with using payment cards.

From 2001 to 2005 the number of transactions has grown at an average annual rate of 3.6 per cent, with more than 1.8 billion transactions occurring in 2005. As opposed to many European countries, the upward trend in transaction numbers has primarily been driven by increased debit card usage.

While the current state of EMV migration in the Netherlands may appear alarming, there are several reasons for the slow progress. At the heart of this is the fact that the specific characteristics of the market in the Netherlands mean that there is almost no business case for EMV.

• Learn how the consumer card market in the Netherlands has developed over the last five years.
• Understand recent developments in the market in terms of consolidation, new entrants and product innovations.
• Find out Datamonitor's opinion on the future growth rate of this payment card market, including debit, credit, deferred debit and charge cards.

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