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Western Europe sees strong debit-card growth 

LONDON — The number of payment cards in Western Europe increased by 9 percent from 2004 to 2006, hitting a total of 787 million, according to research firm Retail Banking Research Ltd. Each adult in the region now has more than two payment cards.

According to RBR, the United Kingdom remains the region’s largest market, despite a fall in its card numbers as a result of credit-card issuers closing dormant accounts.

In its latest report, “Payment Cards Western Europe 2008,” RBR releases its latest cards-related research.

Key findings from 17-country study include:

  • 787 million payment cards in Western Europe
  • Debit cards continue to dominate
  • Closure of dormant accounts in the U.K. causes 8 percent fall in credit cards in issue
  • Cardholding reaches two per adult
  • Private-label cards increasingly being converted to “bank cards”
  • Card usage growing faster than cardholding
  • Average transactions per terminal remain stable
  • Third-party processors extend national presence
  • Several countries lagging in EMV migration

Six countries account for more than 80 percent of cards in the region, with the U.K. remaining the largest with 161 million cards. Germany is second with 127 million cards. Following in card numbers, some way behind, are France, Spain, Turkey and Italy.

At the other end of the scale, Finland, Austria, Denmark and Ireland are all home to fewer than 10 million cards.

Western Europe’s largest card markets in 2006

Country Cards (million) Share
UK 160.9 20.5%
Germany 126.8 16.1%
France 96.5 12.3%
Spain 90.2 11.5%
Turkey 87.1 11.1%
Italy 69.7 8.9%
Others 155.3 19.7%
Total 786.6 100.0%


The number of debit cards increased by 10.4 percent between 2004 and 2006, reaching 406 million. More than half of cards issued in Western Europe are debit cards, while one-third are credit cards. The remaining 15 percent are charge cards.

Most countires have more debit than credit cards. However, in Austria, Belgium, Germany, the Netherlands and Turkey debit cards account for more than three-fifths of the market.

Issuance of prepaid cards, included in the debit sector, remains under‑developed, although such cards are expected to gain in importance over the next few years as banks target people who do not hold bank accounts, and as companies use them to control employee expenditure.

Share of payment cards in Western Europe in 2006

The number of credit cards in the U.K. fell 7.9 percent between 2004 and 2006. This was primarily a result of the closure of dormant accounts.

Because of the U.K.’s dominance in the cards market, the result has been a decrease of 0.2 percentage points in the Western European share of credit cards between 2004 and 2006.

In most countries, however, credit cards are driving growth. The number of such cards in Italy rose by 64 percent and in Norway by 32 percent. In a number of countries, charge cards are being reissued as credit cards.

The U.K., France, Greece and Ireland are the only countries where credit cards outnumber debit cards.

In France, the majority of credit cards are issued by private-label companies, as French banks historically did not have expertise in assessing credit histories.

In Greece and Ireland the higher proportion of credit cards relates to the relatively recent establishment of debit-card systems.

As for the U.K., the abundance of credit cards dates back to the relaxation of regulations governing the granting of consumer credit in the 1980s and the economic boom later that decade.

Western Europe’s fastest-growing credit card markets, 2004-2006

Country Cards(million) Growth2004-2006 (million) Growth Rate2004-2006
Italy 14.0 5.5 64.2%
Norway 3.3 0.8 31.8%
Portugal 4.7 1.0 27.2%
Sweden 5.2 1.1 27.0%
Finland 3.0 0.7 26.9%
Denmark 1.8 0.4 24.4%
Others 227.6 11.0 5.1%
Total/Average 259.5 20.3 8.5%

All countries in the region have at least one card per adult, and eight (the U.K., Norway, Spain, Sweden, the Netherlands, Finland, Switzerland and Portugal) have more than two per adult.

Ten countries have more than one debit card per adult.

Cardholding in Western Europe in 2006

Financial institutions are by far the most important issuers of payment cards and account for 83 percent of cards in circulation — an increase of 1 percentage point from two years ago.

Private-label cards are being converted to “bank cards” as issuers have added the MasterCard or Visa brand to extend their acceptance network.

One such example is Cetelem, which issues the Aurore card, known as Aurora or Aura. As a result, the share of private-label cards has declined by 1 percentage point since 2004, hitting 16 percent.

The only countries where private-label cards account for more than a quarter of the national market are France, Sweden, Finland, Denmark and Switzerland. These are all countries where the use of cards for payment is well-established.

Card usage growing faster than cardholding

A total of 27.2 billion card payments were made in the region in 2006, a rise of 17 percent from the 2004 figure of 23.2 billion payments. Transaction volumes are thus growing considerably faster than card numbers.

Debit cards are the dominant form of card payment based on volumes, accounting for 63 percent of transactions despite that the fact they account for only 52 percent of cards.

In contrast, credit cards payment volumes stand at only 17 percent, compared with 33 percent of cards in circulation.

The comparatively low volume of credit cards is partly attributable to the significant share of private-label cards, which tend to be used only occasionally to fund high-value purchases.

Third-party processors extend national presence

Card processing in Europe has remained nationally based. However, third -party processors have been extending their presences across Europe.

First Data Corp., which was acquired by Kohlberg Kravis Roberts & Co in 2007, offers third-party processing services in a number of Western European countries.

KKR’s takeovers include Austrian Payment Systems Services in Austria and GZS of Germany in 2005.

Also in 2005 International Card Service, a Fortis subsidiary in the Netherlands specialising in credit cards, formed a joint venture in acquiring with First Data International called European Merchant Services.

Another significant player is Atos Origin, which acquired Belgium’s Banksys and Bank Card Company in 2006. The former runs Belgium’s debit-card system and the latter is the country’s main Visa and MasterCard acquirer.

Several countries lagging in EMV migration

Western European countries are at different stages in the migration of cards, POS terminals and ATMs to EMV standards.

There are a number of drivers of EMV, including the liability shifts introduced by MasterCard and Visa, reduction in lost and stolen card fraud, and the likelihood of fraud migration from countries that have implemented EMV into those that have not.

Some countries, notably the U.K. and France, have made considerable headway in EMV migration: More than 95 percent of bank-issued cards, POS terminals and ATMs were EMV-compliant by April 2007 in both countries.

Many Western European countries lag, however. Among those lagging are Greece, Italy, Netherlands, Portugal and Spain for payment cards; Finland, Germany, Italy, the Netherlands and Sweden for POS terminals; and Greece and Italy for ATMs.

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