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The Cards and Payments Industry in Croatia: Emerging trends and opportunities to 2020

The Cards and Payments Industry in Croatia: Emerging trends and opportunities to 2020

Summary

Croatian economy finally registered a positive growth rate of 1.98% in 2015, after experiencing a recession since 2009 owing to the Eurozone crisis. Croatia became the 28th member of the EU on July 1, 2013, and has since raised its competitiveness after benefiting from EU funding to support economic development. Consequently, the government has undertaken labor, pension, social benefit, and investment reforms, which have stimulated employment opportunities. Growth in the cards and payments industry remained weak during the review period (2010-15); however, given the strengthening economy it is anticipated to show growth over the forecast period (2016−20).

In terms of transaction value, debit cards remained the most popular payment card during the review period, accounting for 79.1% of the total payment cards transaction value in 2016. Due to the European debt crisis and uncertain economic conditions, the majority of Croatian consumers became debt-averse and preferred to use debit cards to make payments in order to track their expenses. Consequently, the debit cards market registered growth in terms of the number of cards in circulation, transaction value, and volume during the review period. Frequency of transactions at the POS remained higher at 24.1 compared to at ATMs (15.1), indicating card holders’ preference for using debit cards for small-value purchases.

The payment cards market is embracing new technologies such as contactless. Contactless cards were first introduced in Croatia in December 2012, with Mastercard PayPass first issued by ESB. To widen the growth of contactless payments, banks are increasingly offering rewards to encourage customers to adopt contactless payments. The number of contactless payment cards increased significantly from 878,326 in 2012 to 2.7 Million in 2016. As of December 2015, around 27% of POS terminals were contactless-enabled, an increase of 17.9% on the previous year.

Banks are also making concerted efforts to educate customers with regards to credit card benefits and how to use them judiciously, without falling into debt. In April 2013, Erste & Steiermärkische Bank (ESB) launched the budget control app ‘Diners ProFile,’ enabling customers to learn about their spending habits on food, mobiles, fuel, clothing, and utilities. To promote the use of credit cards, banks also offer card holders a number of benefits and value-added services such as installment facilities, reward points, cashback, and discounts at partner retailers. Privredna Banka Zagreb (PBZ) revamped its membership reward program in 2012, enabling its credit card holders to instantly and directly redeem their points at establishments that accept its Membership Rewards Card.

The report The Cards and Payments Industry in Croatia: Emerging trends and opportunities to 2020 provides top-level market analysis, information and insights into the Croatian cards and payments industry.

In depth, this report provides the following -

  • Current and forecast values for each market in the Croatian cards and payments industry, including debit, credit and charge cards.
  • Detailed insights into payment instruments including credit transfers, direct debit, payment cards and cheques. It also, includes an overview of the country's key alternative payment instruments.
  • E-commerce market analysis.
  • Analysis of various market drivers and regulations governing the Croatian cards and payments industry.
  • Detailed analysis of strategies adopted by banks and other institutions to market debit, credit and charge cards.
Companies mentioned in this report: Privredna banka Zagreb, Zagrebačka Banka, Erste & Steiermärkische Bank, Hrvatska poštanska banka, OTP Banka, Raiffeisen Bank, Splitska Banka, Visa, Mastercard, American Express, Diners Club.

Scope
  • Contactless technology has been gaining traction in Croatia and is being deployed both within POS terminals as well as ATMs. In March 2017 ESB launched an ATM that enables customers to withdraw cash by placing their contactless card on the unit’s contactless card reader. The facility was launched in collaboration with Erste Group Card Processor and Mastercard and was developed by Printec Croatia and Asseco SEE. As of March 2017 the bank has deployed 132 contactless ATMs, and plans to activate the rest of its ATMs with contactless technology by December 2017.
  • Alternative payments are slowly emerging in Croatia, with banks and payment service providers launching new solutions. The most recent is the launch of a contactless mobile wallet service called Wave2Pay in April 2015 by PBZ, Intesa Sanpaolo, and American Express. The solution allows users to store multiple card details, and they can choose any card to make contactless payments. Similarly, Paysafecard launched its online prepaid payment solution in May 2014.
  • To reduce overall operating costs, banks in Croatia are shifting their focus to low-cost channels such as online banking. For instance, Splitska Banka launched its digital banking platform SB SmartNet in March 2016, allowing users to conduct standard banking transactions through desktop PCs and mobile phones. In addition to regular banking services, the platform provides users with a visual analysis of their income and expenditure through graphs and charts. The platform also provides a check on their household expenses, alerts on unplanned expenses, and reminders about the payment due dates of credit card invoices.
Reasons to buy
  • Make strategic business decisions, using top-level historic and forecast market data, related to the Croatian cards and payments industry and each market within it.
  • Understand the key market trends and growth opportunities in the Croatian cards and payments industry.
  • Assess the competitive dynamics in the Croatian cards and payments industry.
  • Gain insights into marketing strategies used for various card types in Croatia.
  • Gain insights into key regulations governing the Croatian cards and payments industry.


  • Executive Summary
    • Market overview
    • Key facts
      • Table Croatia: key facts, 2016
      • Table Croatia: regional benchmarking of payment cards, 2016
    • Top five industry events
  • Payment Instruments
    • Current payment environment
      • Table Figure 1: Croatia: payment instrument shares by transaction value (%), 2012 vs 2016
      • Table Figure 2: Croatia: payment instrument share by transaction volume (%), 2012 vs 2016
  • E-Commerce and Alternative Payments
    • E-commerce market analysis
      • Table Figure 3: Croatia: e-commerce value
    • Alternative payment solutions
      • PayPal
      • Wave2Pay
      • Paysafecard
  • Regulations in the Cards and Payments Industry
    • Regulatory framework
      • SEPA implementation
      • Interchange fee regulation
    • Anti-money laundering
    • Foreign direct investment regulations
      • Table Croatia: mode of entry of foreign banks
  • Analysis of Cards and Payments Industry Drivers
    • Table Figure 4: Croatia: population and economic indicators
    • Table Figure 5: Croatia: ATMs, POS terminals, and real household consumption
  • Payment Cards
    • Table Figure 6: Croatia: payment cards transaction value and cards in circulation, 2012-20f
  • Debit Cards
    • Debit card market analysis
      • Table Figure 7: Croatia: debit card penetration and turnover per card
    • Competition in the debit card market
      • Table Figure 8: Croatia: debit card scheme and issuer transaction value shares, 2016
    • Debit card comparison
      • Table Croatia: debit card comparison and key features, 2016
  • Pay-Later Cards
    • Pay-later card market analysis
      • Table Figure 9: Croatia: pay-later card penetration and turnover per card
    • Competition in the pay-later card market
      • Table Figure 10: Croatia: pay-later card scheme and issuer transaction value shares, 2016
    • Pay-later card comparison
      • Table Croatia: gold credit cards comparison and key features, 2016
      • Table Croatia: premium credit cards comparison and key features, 2016
      • Table Croatia: charge cards comparison and key features, 2016
  • Prepaid Cards
    • Table Figure 11: Croatia: prepaid cards in circulation and transaction value, 2012-20f
  • Appendix
    • Abbreviations and acronyms
    • Supplementary data
      • Table Croatia: payment instrument transaction values (HRKbn), 2012-16e
      • Table Croatia: payment instrument transaction values ($bn), 2012-16e
      • Table Croatia: payment instrument transaction volumes (millions), 2012-16e
      • Table Croatia: payment cards in circulation by type (millions), 2012-20f
      • Table Croatia: volume of payment card transactions (millions), 2012-20f
      • Table Croatia: value of payment card transactions (HRKbn), 2012-20f
      • Table Croatia: value of payment card transactions ($bn), 2012-20f
      • Table Croatia: debit cards in circulation (millions), 2012-20f
      • Table Croatia: debit card transaction volumes, 2012-20f
      • Table Croatia: debit card transaction values (HRK), 2012-20f
      • Table Croatia: debit card transaction values ($), 2012-20f
      • Table Croatia: debit cards in circulation by scheme (millions), 2012-16e
      • Table Croatia: debit card transaction values by scheme (HRKbn), 2012-16e
      • Table Croatia: debit card transaction values by scheme ($bn), 2012-16e
      • Table Croatia: debit card transaction values by issuer (HRKbn), 2012-16e
      • Table Croatia: debit card transaction values by issuer ($bn), 2012-16e
      • Table Croatia: pay-later cards in circulation (millions), 2012-20f
      • Table Croatia: pay-later card transaction volumes, 2012-20f
      • Table Croatia: pay-later card transaction values (HRK), 2012-20f
      • Table Croatia: pay-later card transaction values ($), 2012-20f
      • Table Croatia: pay-later cards in circulation by scheme (000s), 2012-16e
      • Table Croatia: pay-later card transaction values by scheme (HRKbn), 2012-16e
      • Table Croatia: pay-later card transaction values by scheme ($m), 2012-16e
      • Table Croatia: pay-later card transaction values by issuer (HRKbn), 2012-16e
      • Table Croatia: pay-later card transaction values by issuer ($m), 2012-16e
      • Table Croatia: credit cards in circulation (000s), 2012-20f
      • Table Croatia: credit card transaction volumes, 2012-20f
      • Table Croatia: credit card transaction values (HRK), 2012-20f
      • Table Croatia, Credit Card Transaction Values ($), 2012-20f
      • Table Croatia: credit cards in circulation by scheme (000s), 2012-16e
      • Table Croatia: credit card transaction values by scheme (HRKbn), 2012-16e
      • Table Croatia: credit card transaction values by scheme ($m), 2012-16e
      • Table Croatia: charge cards in circulation (000s), 2012-20f
      • Table Croatia: charge card transaction volumes, 2012-20f
      • Table Croatia: charge card transaction values (HRK), 2012-20f
      • Table Croatia: charge card transaction values ($), 2012-20f
      • Table Croatia: charge cards in circulation by scheme (000s), 2012-16e
      • Table Croatia: charge card transaction values by scheme (HRKbn), 2012-16e
      • Table Croatia: charge card transaction values by scheme ($m), 2012-16e
      • Table Croatia: prepaid cards in circulation (000s), 2012-20f
      • Table Croatia: prepaid card transaction values (HRKm), 2012-20f
      • Table Croatia: prepaid card transaction values ($m), 2012-20f
    • Definitions
      • Table Key definitions
    • Methodology
      • Table Annual average exchange rate (Croatian kuna-US dollar), 2012-20f
    • Bibliography
    • Further reading

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