The Cards and Payments Industry in Bulgaria: Emerging trends and opportunities to 2020
Consumers in Bulgaria are still predominantly reliant on cash, and payment cards are mainly used as a means to withdraw cash from ATMs. In 2016 cash accounted for 81.5% of the total payment transaction volume, with consumers frequently using cash for day-to-day, low-value transactions.
Bulgaria’s prepaid cards market registered significant growth during 2012-16. The overall number of prepaid cards increased five-fold from 30,112 in 2012 to 225,694 in 2016. In terms of transaction value, this grew from US$807,610 (BGN1.5m) to US$374.6m (BGN695.7m) during the same period. The rising demand for prepaid cards among the unbanked population, students, online shoppers, and travelers has supported this growth.
The frequency of use per card per year in Bulgaria stood at 30.1 in 2016, lower than neighboring Romania (36.6), Croatia (41.6), Hungary (67.1), Slovenia (60.8), Czech Republic (72.2), Slovakia (85.8), and Poland (108.0). An improving banking infrastructure, a gradual consumer shift towards card-based payments, rising acceptance of payment cards by retailers, and the advent of contactless technology are expected to increase the share of electronic payments over the forecast period (2016-20f).
Banking penetration grew steadily in Bulgaria to reach 69.8% in 2016, up from 56.4% in 2012. Concentrated efforts by the government, coupled with investment in payment infrastructure, led to an increase in the banked population. A rise in banking penetration is anticipated to drive demand for banking products such as current accounts and debit cards.
Debit cards remain the most-used payment cards among Bulgarian residents. In terms of transaction value, debit cards accounted for 88.0% of the overall payment card market. Economic uncertainty, unemployment, and low disposable incomes caused customers to spend more prudently during the review period of 2012-16, resulting in low use of credit cards. As the region recovers, however, customers are now gradually adopting credit cards. The number of credit cards in circulation recorded positive growth in 2014, following a five-year decline. Furthermore, the credit card transaction value recorded a significant 36.2% rise in 2014 over the previous year.
Contactless technology is expected to gain prominence among Bulgarian consumers. Banks and payment service providers are also keen to promote contactless technology, and are launching new services to increase its uptake.
The report The Cards and Payments Industry in Bulgaria: Emerging trends and opportunities to 2020 provides top-level market analysis, information and insights into the Bulgarian cards and payments industry.
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