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Payments Landscape in Croatia: Opportunities and Risks to 2021

Payments Landscape in Croatia: Opportunities and Risks to 2021

Summary

The Croatian payment card market is growing, with a card penetration rate of about 2.1 cards per inhabitant in 2017, mainly because of the country’s high banked population.Despite this, payment card frequency of use in Croatia is one of the lowest among its peer countries, reflecting the cash-dominated nature of the Croatian economy and limited financial awareness among consumers.

Credit transfers are used for both high-value corporate and low-value retail payment transactions. The EuroNCS payment system, which became operational in June 2016, is used for the settlement of national and cross-border Single Euro Payments Area (SEPA) credit transfers made in euros. Settlement of high-value payment transactions in Croatian kuna is via the Croatian Large Value Payment System, which operates on a real-time gross settlement basis.

The adoption of payment cards increased during the review period. Their proportion of transaction volume crossed 46% in 2017, up from around 43% in 2013. A rising banked population and improved payment infrastructure led to this growth.Over the next five years, payment card growth will be supported by increased contactless payment adoption.

Direct debits are mainly used for recurring payments such as utility bills and loan repayments. In Croatia, SEPA direct debits were made available from June 2017 in accordance with EU directives.

The use of cheques in Croatia is on the decline due to the increasing preference for electronic payments.

The report Payments Landscape in Croatia: Opportunities and Risks to 2021, provide top-level market analysis, information and insights into Croatian cards and payments industry, including -

  • Current and forecast values for each market in Croatian cards and payments industry, including debit, credit, and charge cards.
  • Detailed insights into payment instruments including cheques, direct debit, credit transfers, and payment cards. 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: UniCredit, Intesa Sanpaolo, Erste Bank, Raiffeisen Bank, Hrvatska Postanska Banka, OTP Banka, Visa, Mastercard, American Express, Diners Club

Scope
  • Banks in Croatia are increasingly using digital channels to improve the consumer experience. In 2017, Erste Bank upgraded its online current account opening by allowing individuals to upload ID cards, thereby shortening the process. As of 2017, 128,696 individuals had used Erste’s m-banking service - up by 31.10% from 2016. The bank also offers self-service banking kiosks, via which Erste clients can transfer funds between accounts, pay bills, buy credit from mobile operators, and access bank information. In March 2016, Splitska Banka launched its digital banking platform SB SmartNet, 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 emergence of contactless technology has also supported the growth of card-based payments. The number of contactless payment cards increased significantly from 878,326 in 2013 to 2.1 million in 2017. The use of contactless technology has also been extended to ATMs. In March 2017, Erste Bank, Erste Group Card Processor, and Mastercard launched an ATM that enables customers to withdraw cash by placing their contactless card on the unit’s contactless card reader. By the end of December 2017 the bank had deployed 288 contactless ATMs, which collectively accounted for 7.52% of total ATM transactions.
  • The Croatian banking sector has seen increased consolidation. The Croatian subsidiary of Hungarian bank OTP Group acquired Splitska banka from Société Générale in May 2017. Chinese investors CEFC Hainan International Holdings Co and CEFC Shanghai International Group increased their stake in Vaba Banka’s parent company J&T Finance Group to 50% in 2016. As a result, the Chinese companies became indirect shareholders in Vaba Banka. The gradual involvement of foreign banks coupled with the recovery of the domestic economy will result in increased investment in Croatia’s cards and payments industry.
Reasons to buy
  • Make strategic business decisions, using top-level historic and forecast market data, related to Croatian cards and payments industry and each market within it.
  • Understand the key market trends and growth opportunities in Croatian cards and payments industry.
  • Assess the competitive dynamics in 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.


Market Overview
Executive Summary
Card-based Payments
E-commerce Payments
Alternative Payments
Payments Infrastructure & Regulation
Appendix

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