Payments Landscape in Slovenia: Opportunities and Risks to 2022

Payments Landscape in Slovenia: Opportunities and Risks to 2022

Summary

Cash still remains the preferred method of payment in Slovenia, accounting for 52.9% of total payment transaction volume in 2018. Cash is mainly used for day-to-day low-value transactions. But with government initiatives to improve financial literacy, growing consumer awareness of and confidence in digital payments, the advent of digital-only banks, and an improving payment infrastructure, Slovenian consumers are gradually shifting towards electronic payments.

Introduction of an EU-wide cap on interchange fees has encouraged payment card acceptance among Slovenian merchants. The rising adoption of contactless cards enables consumers to easily make low-value transactions of up to €15 ($17.18), while healthy e-commerce growth is expected to further push electronic payments in the country over the forecast period (2018e-22f).

Debit cards remain the preferred card type among Slovenians, with penetration of 131.5 debit cards per 100 individuals in 2018. Debit cards are increasingly being used for payments, and accounted for 75.1% of total card payment volume in 2018. The frequency of debit card payments also increased from 38.5 in 2014 to 54.6 in 2018 at a compound annual growth rate (CAGR) of 9.1%, mainly supported by the growing preference for contactless payments, as well as Slovenian banks encouraging customers to use debit cards by offering reward points and discounts.

Charge cards exceed credit cards in terms of the number of cards in circulation, transaction volume, value, and frequency of use, reflecting the debt-averse nature of Slovenian consumers and their general preference for paying off outstanding balances by the end of the interest-free period. However, credit cards recorded faster growth than charge cards on all counts. Banks have taken steps to encourage uptake by offering installment facilities, reward programs, discounts, and cashback.

The Slovenian e-commerce market registered robust growth, increasing from €183.8m ($210.6m) in 2014 to €289.1m ($331.18m) in 2018. Growing internet and smartphone penetration, a rise in online shoppers, and increased consumer purchasing power have supported this growth. Online shopping events such as Black Friday and Cyber Monday are also playing their part in e-commerce growth. The availability of alternative payment solutions such as PayPal and paysafecard is further expected to drive e-commerce growth over the forecast period.

The report Payments Landscape in Slovenia: Opportunities and Risks to 2022, provides detailed analysis of market trends in the Slovenian 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 debits, 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 the 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 details of regulatory policy and recent changes in the regulatory structure.

The report provides -

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

Companies mentioned: NLB, Nova KBM, Abanka, Intesa Sanpaolo, Société Générale Group, Mastercard, Visa, American Express, Diners Club, Karanta, PayPal, paysafecard, Moneta.

Scope

• The shift towards electronic payments is likely to further accelerate, with Slovenian clearing company Bankart receiving approval from Banka Slovenije (the country’s central bank) to deploy Nets’ instant payments platform. Bankart went live with the solution in February 2019. The instant payment system enables the immediate transfer of funds between accounts opened with different banks within Slovenia. The new service operates 24-hours a day, seven days a week, 365 days a year, with each transaction expected to be settled in a maximum of 10 seconds.
• American Express has exited the Slovenian payments market and terminated its licensing agreements. As a result, all American Express cards issued by Intesa Sanpaolo Bank were terminated after December 31, 2018, and from January 1, 2019 it is no longer possible to conduct transactions with American Express cards.
• To benefit from the growing preference for alternative payments, banks and payment service providers are launching new payment services, with the latest being the October 2018 launch of mobile wallet app mBills by Germany-based payment solution provider Wirecard (in association with Slovenian energy company Petrol). The app can be used to make both in-store and online payments as well as P2P money transfers. Using the Mastercard debit card issued by Wirecard and connected to the mobile wallet, app users can make payments at 1,500 locations in Slovenia. Earlier in March 2018, NLB launched its NLB Pay mobile wallet, allowing users to make contactless in-store payments.

Reasons to buy

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