Payments Landscape in Austria: Opportunities and Risks to 2022

Payments Landscape in Austria: Opportunities and Risks to 2022

Summary

The use of payment cards has been growing in line with rising awareness of electronic payments and an increase in the country’s banked population. Most Austrian consumers are now banked, and card penetration stood at 1.5 cards per individual in 2018. Debit cards are the most popular card type, and are also increasingly being used for payments, as consumers are gradually switching to debit cards for low-value transactions. However, cash remains the preferred payment instrument in Austria, accounting for 44.8% of the total payment transaction volume in 2018.

Debit cards are most popular card type, with every Austrian holding at least one. High banking penetration, the debt-averse nature of Austrian consumers and the combined efforts of banks and government bodies to promote electronic payments and financial inclusion have led to their strong adoption. The frequency of debit card payments increased, registering a healthy review-period CAGR of 8.2%, going from 47.8 times per card in 2014 to 65.5 times in 2018. Meanwhile, the average transaction value for debit card payments declined from €49.1 ($56.28) in 2014 to €41.0 ($46.99) in 2018, suggesting that consumers are gradually using debit cards for low-value payments.

Credit and charge cards are not very popular in Austria, with penetration standing at 39.6 cards per 100 individuals in 2018. Austrians are not prolific users of credit and charge cards. This is evident from the fact that credit and charge payment transaction value accounted for 38.0% of the total payment transaction value in 2018. The debt-averse nature of consumers, as well as banks offering overdraft facilities on bank accounts, limited the scope of credit card adoption in the country. Charge cards are preferred, as Austrians tend to settle total outstanding amounts in full at the end of the repayment date to avoid falling into debt.

The Austrian e-commerce market is currently in a growth phase, increasing from €6.5bn ($7.4bn) in 2014 to €9.8bn ($11.3bn) in 2018, at a review-period CAGR of 10.9%. A number of banks and card issuers are offering customized cards for online shopping. The growing adoption of e-commerce in Austria can be attributed to increasing confidence in e-commerce among both merchants and consumers. The availability of various payment options also helped in promoting e-commerce purchases in the country.

The report Payments Landscape in Austria: Opportunities and Risks to 2022, provides detailed analysis of market trends in the Austrian cards and payments industry. It provides values and volumes for a number of key performance indicators in the industry, including cash, cards, credit transfers, direct debit, and cheques during the review-period (2014-18e). The report also analyzes various payment card markets operating in the industry and provides detailed information on the number of cards in circulation, transaction values and volumes during the review-period and over the forecast-period (2018e-22f). It also offers information on the country's competitive landscape, including market shares of issuers and schemes. The report brings together research, modeling, and analysis expertise to allow banks and card issuers to identify segment dynamics and competitive advantages. The report also covers detailed regulatory policies and recent changes in regulatory structure.

The report provides -

• Current and forecast values for each market in the Austrian cards and payments industry, including debit, credit, and charge cards
• Detailed insights into payment instruments including cash, cards, credit transfers, direct debit, 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 Austrian cards and payments industry
• Detailed analysis of strategies adopted by banks and other institutions to market debit, credit, and charge cards

Companies mentioned: Raiffeisen Bank, Erste Bank, BAWAG PSK, UniCredit Bank, Volksbank, Oberbank, Mastercard, Visa, Diners Club, and American Express

Scope

• Contactless payments are gaining popularity in Austria, and are mainly used for low-value retail purchases - particularly for values below €25 ($28.64). In 2018, the number of payment cards that support contactless was estimated at 11.8 million, which was up significantly from 6.4 million in 2014. To capitalize on the growing use of contactless technology in Austria, in October 2018 JCB International partnered with the Austrian credit card issuer Card Complete Service Bank to offer JCB contactless cards that can be used at more than 10,000 merchants. Similarly, other international schemes such as Visa and Mastercard offer contactless technology via payWave and PayPass in Austria. Most recently, in January 2019, Mastercard, in collaboration with ERSTE Bank and Sparkassen, announced the launch of a new Mastercard debit card with contactless functionality in April 2019.
• The introduction of digital-only banks are also supporting the adoption of electronic payments in the country. For instance, Bunq mobile-only bank was launched in Austria in March 2017. Targeting the growing base of digital-savvy consumers, the bank enables users to open an account, make payments and order a Mastercard-branded debit card. In August 2013, BNP Paribas launched a mobile-only bank, Hello Bank!, in Austria, which enables customers to open an account, get a payment card and make investments. It serves nearly 85,000 customers in the country. Similarly, in January 2015, the mobile-only bank N26 was launched in Austria, offering an online bank account, a Mastercard-branded debit card and several other benefits.
• To promote instant payments in the country, a mobile payment platform called Zoin, developed by PSA Payment Services Austria, was launched in September 2017. This allows users to send money using a mobile number directly from their bank account, and transfer it to the recipient’s bank account without the need of an IBAN number. The solution is supported by major banks, including Bank Austria, Austrian Anadi Bank, Oberbank, Volksbank, BAWAG PSK and Raiffeisen Bank.

Reasons to buy

• Make strategic business decisions, using top-level historic and forecast market data, related to the Austrian cards and payments industry and each market within it.
• Understand the key market trends and growth opportunities in the Austrian cards and payments industry.
• Assess the competitive dynamics in the Austrian cards and payments industry.
• Gain insights into marketing strategies used for various card types in Austria.
• Gain insights into key regulations governing the Austrian cards and payments industry.