The Cards and Payments Industry in Ireland: Emerging Trends and Opportunities to 2020

The Cards and Payments Industry in Ireland: Emerging Trends and Opportunities to 2020

Summary

Cash has been a preferred instrument for consumer payments, accounting for 55.7% of the total payment transaction volume in 2016. However, its use is expected to decrease as electronic payments grow. Government initiatives to encourage card payments, a surge in contactless payments and consumer preference for emerging payments, such as digital and mobile wallets, are all expected to reduce cash’s share in favor of electronic payments over the forecast period.

Debit cards remain the preferred payment card among Irish consumers, accounting for 81.6% of the payment card transaction value in 2016. Rising consumer use of debit cards for low-value transactions, the growing banked population, the government’s launch of the National Payments Plan to encourage use of electronic instruments such as debit cards over checks, the removal of stamp duty on ATM transactions, and the lowering of interchange fees to a minimal 0.1% were key factors supporting use of debit cards. High interest rates on credit cards and the ready availability of overdraft facilities shifted consumer preference towards debt-free financial products.

Overall, the credit card market registered a sluggish review-period CAGR of 0.59% in terms of transaction value. As bank lending slowed during the eurozone crisis, Irish consumers began to limit credit card spending. Banks also applied more stringent lending requirements, which increased the adoption of debit cards as consumers preferred to spend only what they had.

International merchant acquirers are entering the Irish payment cards market through partnerships and acquisitions. US-based acquirer First Data, with AIB, entered into a partnership with China UnionPay (CUP) in June 2014, to become the first merchant acquirer in Ireland to provide payment acceptance services for CUP debit and credit cards. In August 2014, Evo Payments, a leading merchant acquirer in North America and Europe, partnered with Bank of Ireland (BOI) to expand its merchant acquiring business in Ireland. The services are marketed through Bank of Ireland Payment Acceptance, which is primarily responsible for offering payment card solutions to Irish merchants.

E-commerce in Ireland posted a review-period CAGR of 11.77%, growing from US$7.7 billion (EUR7.3 billion) in 2012 to US$12.0 billion (EUR11.4 billion) in 2016. Rises in online and smartphone penetration, the number of online shoppers and the availability of payment gateways supported e-commerce’s growth in the country. Leading e-commerce websites in Ireland include Linwoods Health Foods, James Whelan Butchers and McElhinney’s Ballybofey Donegal. International e-commerce companies such as eBay, Apple, Zynga.com and Amazon also have presences in the country.

The report The Cards and Payments Industry in Ireland: Emerging Trends and Opportunities to 2020 provides top-level market analysis, information and insights into the Irish cards and payments industry.

Moreover, this report enables the following -

  • Current and forecast values for each market in the Irish cards and payments industry, including debit and credit cards.
  • Detailed insights into payment instruments including credit transfers, checks, cash, direct debit and payment cards. It also, includes an overview of the country's key alternative payment instruments.
  • E-commerce market analysis and payment methods.
  • Analysis of various market drivers and regulations governing the Irish cards and payments industry.
  • Detailed analysis of strategies adopted by banks and other institutions to market debit and credit cards.
Companies mentioned in this report: AIB, BOI, Ulster Bank, Permanent TSB, AvantCard, Visa, Mastercard.

Scope
  • On January 1, 2016 the Irish government replaced stamp duty with a surcharge on ATM cash withdrawals, with an aim to discourage use of debit cards at ATMs and drive in-store payments. Until 2016, consumers were charged a flat annual stamp duty of US$2.6 (EUR2.5) on ATM cards, and US$5.3 (EUR5) on combinations of debit and ATM cards, irrespective of frequency of use. This is now replaced with a new tax structure under which cardholders are charged US$0.13 (EUR0.12) per ATM cash withdrawal, with an annual cap of US$2.6 (EUR2.5) on ATM cards, and US$5.3 (EUR5) on combinations of debit and ATM cards. In contrast, debit card transactions at POS terminals are free of charge. This is expected to discourage card use at ATMs and to encourage the use of debit cards for in-store payments.
  • In December 2015, the EU-wide cap on the interchange fee was implemented in Ireland. However, the Irish government implemented a debit card interchange fee cap of 0.1%, which is 50% lower than the standard EU cap of 0.2%. The interchange fee cap on credit cards, however, remains at the EU level of 0.3%. While the regulation is expected to substantially impact the profitability of card issuers and schemes, according to the Irish government the cap will help merchants save up to US$37.9 million (EUR36 million) annually, encouraging them to accept card-based payments.
  • Irish consumer uptake of contactless technology is rising. The Irish government increased the contactless payment limit from US$15.8 (EUR15) to US$31.6 (EUR30) from October 31, 2015, and on February 16, 2016, Visa Europe announced that 1 million contactless transactions on Visa cards were made every week in Ireland as a result of the increased limit, compared to 2 million transactions per month in September 2015. As of April 2017, around 3 million Visa contactless cards had been issued in Ireland are accepted by more than 20,000 merchants. Almost all major banks, including Kredietbank ABB Insurance CERA (KBC Bank), Allied Irish Banks (AIB), Permanent TSB, Bank of Ireland (BOI) and Ulster Bank now offer contactless cards.
Reasons to buy
  • Make strategic business decisions, using top-level historic and forecast market data, related to the Irish cards and payments industry and each market within it.
  • Understand the key market trends and growth opportunities in the Irish cards and payments industry.
  • Assess the competitive dynamics in the Irish cards and payments industry.
  • Gain insights into marketing strategies used for various card types in Ireland.
  • Gain insights into key regulations governing the Irish cards and payments industry.


  • Executive Summary
    • Market overview
    • Key facts
      • Table Ireland, Key Facts, 2016
      • Table Ireland, Regional Benchmarking of Payment Cards, 2016
    • Top five industry events
  • Payment Instruments
    • Current payment environment
      • Table Figure 1: Ireland, Payment Instrument Shares by Transaction Value (%), 2012 vs 2016
      • Table Figure 2: Ireland, Payment Instrument Shares by Transaction Volume (%), 2012 vs 2016
  • E-Commerce and Alternative Payments
    • E-Commerce market analysis
      • Table Figure 3: Ireland, E-Commerce Value
    • Alternative payment solutions
      • PayPal
      • Apple Pay
      • Android Pay
      • Visa Checkout
      • MasterPass
      • boon
      • Single-Click
  • Regulations in the Cards and Payments Industry
    • Regulatory framework
      • SEPA cards framework
      • Payment Services Directive 2 (PSD2)
      • Interchange fee regulation
    • Anti-Money Laundering (AML)
    • Foreign direct investment regulations
      • Table Ireland, Mode of Entry of Foreign Banks
  • Analysis of Cards and Payments Industry Drivers
    • Table Figure 4: Ireland, Population and Economic Indicators
    • Table Figure 5: Ireland, ATMs, POS Terminals and Household Consumption
  • Payment Cards
    • Table Figure 6: Ireland, Payment Cards Transaction Value and Cards in Circulation, 2012-2020
  • Debit Cards
    • Debit cards market analysis
      • Table Figure 7: Ireland, Debit Card Penetration and Turnover Per Card
    • Competition in the debit cards market
      • Table Figure 8: Ireland, Debit Cards Scheme and Issuer Transaction Value Share, 2016
    • Debit cards comparison
      • Table Ireland, Debit Cards Comparison and Key Features, 2017
  • Pay Later Cards
    • Pay later cards market analysis
      • Table Figure 9: Ireland, Pay Later Card Penetration and Turnover Per Card
    • Competition in the pay later cards market
      • Table Figure 10: Ireland, Pay Later Cards Scheme and Issuer Transaction Value Share, 2016
    • Pay later cards comparison
      • Table Ireland, Gold Credit Cards Comparison and Key Features, 2017
      • Table Ireland, Premium Credit Cards Comparison and Key Features, 2017
  • Prepaid Cards
    • Table Figure 11: Ireland, Prepaid Cards in Circulation and Transaction Value, 2012-2020
  • Merchant Acquiring
    • Table Figure 12: Ireland, Merchant Acquiring Transaction Volume and Value, 2012-2020
    • Table Figure 13: Ireland, Acquirers' Market Shares (%), 2015
    • Table Figure 14: Ireland, Average Merchant Service Charge and Interchange Fees (%), 2012-2020
  • Appendix
    • Abbreviations and acronyms
    • Supplementary data
      • Table Ireland, Payment Instrument Transaction Values (EUR Billion), 2012-2016
      • Table Ireland, Payment Instrument Transaction Values (US$ Billion), 2012-2016
      • Table Ireland, Payment Instrument Transaction Volumes (Million), 2012-2016
      • Table Ireland, Payment Cards in Circulation by Type (Million), 2012-2020
      • Table Ireland, Volume of Payment Card Transactions (Million), 2012-2020
      • Table Ireland, Value of Payment Card Transactions (EUR Billion), 2012-2020
      • Table Ireland, Value of Payment Card Transactions (US$ Billion), 2012-2020
      • Table Ireland, Debit Cards in Circulation (Million), 2012-2020
      • Table Ireland, Debit Card Transaction Volumes, 2012-2020
      • Table Ireland, Debit Card Transaction Values (EUR), 2012-2020
      • Table Ireland, Debit Card Transaction Values (US$), 2012-2020
      • Table Ireland, Debit Cards in Circulation by Scheme (Thousand), 2012-2016
      • Table Ireland, Debit Card Transaction Values by Scheme (EUR Million), 2012-2016
      • Table Ireland, Debit Card Transaction Values by Scheme (US$ Million), 2012-2016
      • Table Ireland, Debit Card Transaction Values by Issuer (EUR Billion), 2012-2016
      • Table Ireland, Debit Card Transaction Values by Issuer (US$ Billion), 2012-2016
      • Table Ireland, Pay Later Cards in Circulation (Million), 2012-2020
      • Table Ireland, Pay Later Card Transaction Volumes, 2012-2020
      • Table Ireland, Pay Later Card Transaction Values (EUR), 2012-2020
      • Table Ireland, Pay Later Card Transaction Values (US$), 2012-2020
      • Table Ireland, Pay Later Cards in Circulation by Scheme (Thousand), 2012-2016
      • Table Ireland, Pay Later Card Transaction Values by Scheme (EUR Billion), 2012-2016
      • Table Ireland, Pay Later Card Transaction Values by Scheme (US$ Billion), 2012-2016
      • Table Ireland, Pay Later Card Transaction Values by Issuer (EUR Million), 2012-2016
      • Table Ireland, Pay Later Card Transaction Values by Issuer (US$ Million), 2012-2016
      • Table Ireland, Prepaid Cards in Circulation (Thousand), 2012-2020
      • Table Ireland, Prepaid Card Transaction Values (EUR Million), 2012-2020
      • Table Ireland, Prepaid Card Transaction Values (US$ Million), 2012-2020
      • Table Ireland, Merchant Acquiring Transaction Volumes (Million), 2012-2020
      • Table Ireland, Merchant Acquiring Transaction Values (EUR Billion), 2012-2020
      • Table Ireland, Merchant Acquiring Transaction Values (US$ Billion), 2012-2020
      • Table Ireland, Acquirers' Transaction Volumes (Million), 2011-2015
      • Table Ireland, Acquirers' Transaction Values (EUR Billion), 2011-2015
      • Table Ireland, Acquirers' Transaction Values (US$ Billion), 2011-2015
      • Table Ireland, Retail Outlets and Card Accepting Merchants (Thousand), 2012-2020
      • Table Ireland, Debit Card Average Interchange Fees (%), 2011-2015
      • Table Ireland, Debit Card Merchant Service Charge and Interchange Fee (%), 2012-2020
      • Table Ireland, Pay Later Card Average Interchange Fees (%), 2011-2015
      • Table Ireland, Pay Later Card Merchant Service Charge and Interchange Fee (%), 2012-2020
    • Definitions
      • Table Key Definitions
    • Methodology
    • Bibliography
    • Further reading

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