Financial Cards in Spain
Euromonitor International's Financial Cards in Spain report establishes the size and structure of the market for ATMs, credit cards, debit cards, store cards and smart cards. It looks at key players in the market (issuers and operators), number of cards in circulation, numbers transactions and value of transactions. It offers strategic analysis of sector forecasts and trends to watch.
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Tables: 106 | Publication date: Mar 2008
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- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive environment
Product coverage
Financial cards in circulation; Transactions
Executive summary
Interest rates impact positively on credit cards
Spain’s GDP is expected to grow at the rate of previous years – into the foreseeable future. This is having a positive impact on household expenditure, though increasing interest rates have affected mortgages, increasing the ratio of debt to disposable income in 2007. It is expected that interest rates will decrease from 2007, thus having a positive impact on the credit to consumer and credit card sector.
The number of cards issued continues to increase
The number of financial cards has been growing steadily. This has also been the case with the number of ATMs and point-of-sale terminals. Spain has one of the highest number of ATMs and point-of-sale terminals per capita in Europe (ECB Blue Book report December 2006). However, usage of cards is another issue and there still remains a preference to pay in cash. However, the migration to EMV standards will overcome concerns by the Spanish of fraud, although card fraud in Spain is very low compared with other European countries.
Easing of card ownership restrictions
Spain’s continuing population growth, largely due to immigration, has increased demand for financial cards. It is expected that by 2010 immigrants will represent 10% of the total population. The increasing competition in the financial markets, with the appearance of foreign banks, has led to a lessening of restrictions related to the ownership of payment cards. Banks have relaxed requirements: credit cards are now being offered to traditionally overlooked targets, such as immigrants, young people and older adults.
A few years ago retailers started launching strong marketing campaigns to increase customer loyalty by offering store cards, something that constitutes significant competition for traditional banks. However, the large growth in store cards seems to have reached its peak as banks are signing co-brand alliances because it is not comfortable for the customer to carry too many cards. Single multifunction cards will be offered, for example, those issued by Banco Santander Central Hispano (BSCH): university smart cards which enable the holder to borrow books from the library, pay at the photocopy machine, and the normal debit or credit card services, payment at restaurants, money withdrawal, etc. With the migration to chip cards this will be possible in the near future. The main problem still remains the need to increase its use.
Card usage facilitated by reduced minimum spend levels
The reduction in interchange fees charged to retailers has had a positive impact on the payment card market: retailers are now reducing obstacles imposed on customers who wish to pay by financial card. Retailers have reduced minimum purchase levels to around EUR10. Total value of internet transactions have been increasing sharply since 2000 and this is expected to continue to grow at high rate levels up to 2010, as broadband, especially ADSL, continues to fall in price and people become more used to e-commerce.
Market segmentation increases in the cards industry
Banks are now targeting overlooked groups such as young people and the retired as Spain’s population continues to age while the birth rate remains low compared with other European countries. New products have been launched especially to target these groups, and marketing strategies are now more customer-orientated.
La Caixa launched the “40 principals” card to target young people. 40 principals is one of the most popular music radio stations. It also launched the “+25 card”, “Visa Jeans”, and, especially for university students, the “Universitat” and for elderly people it issued the “Star club” card. BBVA launched “Visa Young Blue” for young people less than 26 years of age with a credit limit of up to EUR3,000. Issued free in the first year, BSCH launched 4B MasterCard International Express to target immigrants.
Banks promote different services suitable for different stages and financial needs of a consumer’s life, emphasising the idea that they can be their allies throughout their lives.
Foreign entrants boost competition
The prospects for the consumer in the credit card market are good, as competition has increased with the presence of foreign banks. The impact of the reduction in interchanges fees has been compensated by banks increasing commissions on the issuing and maintaining of credit cards. Interest rates charged by lending institutions have also increased. Holders now receive better services – there are a greater variety of ways to pay back credit, especially on deferred payment cards, as interest rates charged can be very flexible. Revolving credit cards are growing in popularity.
Even though the market in Spain seems to be in an incipient mature stage there is still margin for growth. There are still opportunities for growth in the revolving credit cards and other forms of instalment payment. Successful companies will be those widening the range of services and adapting their card services to small purchases.
Table of contents
FINANCIAL CARDS IN SPAIN : MARKET INSIGHT
EXECUTIVE SUMMARY
Interest rates impact positively on credit cards
The number of cards issued continues to increase
Easing of card ownership restrictions
Card usage facilitated by reduced minimum spend levels
Market segmentation increases in the cards industry
Foreign entrants boost competition
KEY TRENDS AND DEVELOPMENTS
Increase in the use of payment cards in tourist resorts
Loyalty programmes stimulate use of payment cards at petrol/gas stations
Banks toughen credit requirements
Growing restaurant franchises lead to increased card usage
Supermarket cards becoming more sophisticated
OPERATING ENVIRONMENT
Consumer credit and lending
Issuer Fraud
Acquirer fraud
E-commerce
M-commerce
ATM and Point-of-sale terminals
Cash Withdrawal versus Card purchase
Governmental regulation and legislation
Table 1 Rates for Credit and Debit Transactions 2006-2008
MARKET INDICATORS
Table 2 Number of POS Terminals 2004-2007
Table 3 Number of ATMs 2004-2007
Table 4 Disposable Income 2002-2007
Table 5 Consumer Credit 2002-2007
Table 6 Value Lost to Fraud 2002-2007
MARKET DATA
Table 7 Financial Cards: Transactions 2002-2007
Table 8 Financial Cards: Value 2002-2007
Table 9 Financial Cards: Number of Cards in Circulation 2002-2007
Table 10 Financial Cards: Number of Accounts 2002-2007
Table 11 Domestic versus Foreign Spend 2007
Table 12 Card Expenditure by Sector 2007
Table 13 Card Expenditure by Location 2007
Table 14 Financial Cards: Number of Internet Transactions 2002-2007
Table 15 Financial Cards: Internet Transaction Value 2002-2007
Table 16 Financial Cards: Number of Cards by Issuer 2002-2006
Table 17 Financial Cards: Number of Cards by Operator 2002-2006
Table 18 Financial Cards: Point of Sale Transactions by Acquirer 2002-2006
Table 19 Financial Cards Forecast: Transactions 2007-2012
Table 20 Financial Cards Forecast: Value 2007-2012
Table 21 Financial Cards Forecast: Number of Cards in Circulation 2007-2012
Table 22 Financial Cards: Forecast Number of Accounts 2007-2012
Table 23 Financial Cards Forecast: Number of Internet Transactions 2007-2012
Table 24 Financial Cards Forecast: Internet Transaction Value 2007-2012
DEFINITIONS
Cards by Type
Cardholder Behaviour
Card Expenditure by Sector
Value Lost to Card Fraud
Consumer Credit
Market Background
Sources
Summary 1 Research Sources
LOCAL COMPANY PROFILES - SPAIN
BANCO BILBAO VIZCAYA ARGENTARIA (BBVA) - FINANCIAL CARDS - SPAIN
STRATEGIC DIRECTION
KEY FACTS
Summary 2 Banco Bilbao Vizcaya: Key Facts
Summary 3 Banco Bilbao Vizcaya: Operational Indicators
COMPANY BACKGROUND
COMPETITIVE POSITIONING
BANCO SANTANDER CENTRAL HISPANO SA - FINANCIAL CARDS - SPAIN
STRATEGIC DIRECTION
KEY FACTS
Summary 4 Banco Santander Central Hispano SA: Key Facts
Summary 5 Banco Santander Central Hispano SA: Operational Indicators
COMPANY BACKGROUND
COMPETITIVE POSITIONING
CAJA DE AHORROS Y MONTE PIEDAD MADRID - FINANCIAL CARDS - SPAIN
STRATEGIC POSITIONING
KEY FACTS
Summary 6 Caja de Ahorros y Monte Piedad Madrid: Key Facts
Summary 7 Caja de Ahorros y Monte Piedad Madrid: Operational Indicators
COMPANY BACKGROUND
COMPETITIVE POSITIONING
FUNDACIO LA CAIXA - FINANCIAL CARDS - SPAIN
STRATEGIC DIRECTION
KEY FACTS
Summary 8 Fundacio la Caixa: Key Facts
Summary 9 Fundacio la Caixa: Operational Indicators
COMPANY BACKGROUND
COMPETITIVE POSITIONING
SMART CARDS IN SPAIN
HEADLINES
TRENDS
By 2008 chip cards will have to replace magnetic stripe cards
Government department use of smart cards
Smart card applications
COMPETITIVE LANDSCAPE
MasterCard Pay Pass technology
La Caixa is leading the way in chip implementation
University smart cards
Health insurance and banking use smart cards extensively
PROSPECTS
Smart card technology to integrate new functions
Use of smart cards to boom
SECTOR DATA
Table 25 Smart Cards Sector Performance: 2002-2007
Table 26 Smart Cards Sector Performance: % Growth 2002-2007
Table 27 Smart Cards: Memory Vs Microprocessor 2004-2007
Table 28 Smart Cards: Contact Vs Contactless 2004-2007
Table 29 Smart Cards: Forecast Sector Performance: 2007-2012
Table 30 Smart Cards: Forecast Sector Performance: % Growth 2007-2012
ATM TRANSACTIONS IN SPAIN
HEADLINES
TRENDS
New ATM services
The average spend per transaction expected to decrease
Internet banking has a negative effect on ATM transactions
Store card alliances reduce the need for ATM withdrawals
COMPETITIVE LANDSCAPE
Bank are targeting different age groups
La Caixa is expected to remain the leader
Decreasing commissions on withdrawals
PROSPECTS
Positive prospects for ATM cards as they represent around 90% of total financial cards in the market
Growth of ATM transactions value thanks to more services at terminals
La Caixa with four million ATM cards
SECTOR DATA
Table 31 ATM Cards Sector Performance: 2002-2007
Table 32 ATM Cards Sector Performance: % Growth 2002-2007
Table 33 ATM Cards: Forecast Sector Performance: 2007-2012
Table 34 ATM Cards: Forecast Sector Performance: % Growth 2007-2012
DEBIT TRANSACTIONS IN SPAIN
HEADLINES
TRENDS
The number of debit cards to slightly grow over the forecast period
Value of debit card transaction to fall over the forecast period
Credit cards are preferred over debit cards to pay for internet purchases.
Bank consolidations limit the number of debit cards in 2007
The average debit card spend per transaction is expected to fall from 2007
Savings banks: La Caixa and Caja Madrid dominate the debit cards market
Banks promote credit cards over debit cards
Reduction in interchange fees
COMPETITIVE LANDSCAPE
55% of debit card transaction value accounted for by Visa cards in 2006
La Caixa continued to be the market leader in 2006
BSCH launches the “Coca-Cola movement” to target young people
BSCH customises its debit cards
PROSPECTS
Increasing European integration of payment systems
Positive economic growth boosts household expenditure
Increasing use of debit cards for daily purchases
La Caixa and Caja Madrid very active in targeting specific groups
SECTOR DATA
Table 35 Debit Cards Sector Performance: 2002-2007
Table 36 Debit Cards Sector Performance: % Growth 2002-2007
Table 37 Debit Cards: Number of Cards by Issuer 2002-2006
Table 38 Debit Cards: Number of cards by Operator 2002-2006
Table 39 Debit Cards Transactions by Acquirer 2002-2006
Table 40 Debit Cards Transaction Value by Operator 2002-2006
Table 41 Debit Cards: Forecast Sector Performance: 2007-2012
Table 42 Debit Cards: Forecast Sector Performance: % Growth 2007-2012
CREDIT CARD TRANSACTIONS IN SPAIN
HEADLINES
TRENDS
Corporate cards incorporate a wide range of facilities and benefits
Value per transaction falls as the number of transactions increases
Credit cards used to buy flight tickets
COMPETITIVE LANDSCAPE
La Caixa continues to lead
MasterCard making ground on Visa
PROSPECTS
SECTOR DATA
Table 43 Credit Cards Sector Performance: 2002-2007
Table 44 Credit Cards Sector Performance: % Growth 2002-2007
Table 45 Personal Credit Cards Sector Performance: 2002-2007
Table 46 Personal Credit Cards Sector Performance: % Growth 2002-2007
Table 47 Corporate Credit Cards: Sector Performance: 2002-2007
Table 48 Corporate Credit Cards: Sector Performance: % Growth 2002-2007
Table 49 Credit Cards: Number of Cards by Issuer 2002-2006
Table 50 Credit Cards: Number of cards by Operator 2002-2006
Table 51 Credit Cards Transactions by Acquirer 2002-2006
Table 52 Credit Cards Transaction Value by Operator 2002-2006
Table 53 Personal Credit Cards Transactions by Acquirer 2002-2006
Table 54 Personal Credit Cards Transaction Value by Operator 2002-2006
Table 55 Corporate Credit Cards Transactions by Acquirer 2002-2006
Table 56 Corporate Credit Cards Transaction Value by Operator 2002-2006
Table 57 Credit Cards: Forecast Sector Performance: 2007-2012
Table 58 Credit Cards: Forecast Sector Performance: % Growth 2007-2012
Table 59 Personal Credit Cards: Forecast Sector Performance: 2007-2012
Table 60 Personal Credit Cards: Forecast Sector Performance: % Growth 2007-2012
Table 61 Corporate Credit Cards: Forecast Sector Performance: 2007-2012
Table 62 Corporate Credit Cards: Forecast Sector Performance: % Growth 2007-2012
CHARGE CARD TRANSACTIONS IN SPAIN
HEADLINES
TRENDS
The number of charge cards in Spain doubles
Charge and credit cards are increasingly being used for internet purchases
Spend per charge card internet transaction grows
Deferred debit cards are expected to grow by 60% over the forecast period
Corporate charge cards become popular as they reduce administrative costs
60% of university students surf the net and 28% make internet purchases
Supermarket issue more sophisticated payment cards
COMPETITIVE LANDSCAPE
La Caixa and BBVA lead the deferred debit cards market
MBNA is one of the main foreign players in the deferred debit cards market
VISA card has 67% value share in the personal charge cards market
PROSPECTS
Banks consider deferred debit as useful for attracting customers
Deferred debit cards have been historically more popular than credit cards
SECTOR DATA
Table 63 Charge Cards Sector Performance: 2002-2007
Table 64 Charge Cards Sector Performance: % Growth 2002-2007
Table 65 Personal Charge Cards Sector Performance: 2002-2007
Table 66 Personal Charge Cards Sector Performance: % Growth 2002-2007
Table 67 Corporate Charge Cards: Sector Performance: 2002-2007
Table 68 Corporate Charge Cards: Sector Performance: % Growth 2002-2007
Table 69 Charge Cards: Number of Cards by Issuer 2002-2006
Table 70 Charge Cards: Number of cards by Operator 2002-2006
Table 71 Charge Cards Transactions by Acquirer 2002-2006
Table 72 Charge Cards Transaction Value by Operator 2002-2006
Table 73 Personal Charge Cards Transactions by Acquirer 2002-2006
Table 74 Personal Charge Cards Transaction Value by Operator 2002-2006
Table 75 Corporate Charge Cards Transactions by Acquirer 2002-2006
Table 76 Corporate Charge Cards Transaction Value by Operator 2002-2006
Table 77 Charge Cards: Forecast Sector Performance: 2007-2012
Table 78 Charge Cards: Forecast Sector Performance: % Growth 2007-2012
Table 79 Personal Charge Cards: Forecast Sector Performance: 2007-2012
Table 80 Personal Charge Cards: Forecast Sector Performance: % Growth 2007-2012
Table 81 Corporate Charge Cards: Forecast Sector Performance: 2007-2012
Table 82 Corporate Charge Cards: Forecast Sector Performance: % Growth 2007-2012
PRE-PAID CARD TRANSACTIONS IN SPAIN
HEADLINES
TRENDS
The number of pre-paid cards fell from 2000 to 2006
Reduced use of prepaid cards for internet transaction up to 2005
Pre-paid cards offered by banks for internet purchases
Increasing functions and applications of pre-paid cards
Pre-paid cards offered to immigrants without bank accounts
Free pre-paid cards
Pre-paid cards replace vouchers
COMPETITIVE LANDSCAPE
Pre-paid e-purse cards
La Caixa and El Corte Inglés lead pre-paid cards
Corporate and government pre-paid cards
Pre-paid cards for internet transactions
Personalised pre-paid cards launched by La Caixa
BSCH launches Super E-cash pre-paid card
Students pre-paid cards
BBVA gift cards
PROSPECTS
The number of pre-paid cards is forecast to reach seven million in 2012
Pre-paid cards for internet purchases
Pre-paid cards used for corporate expenditure
El Corte Inglés to offer more gift cards
Future prospects for pre-paid cards
SECTOR DATA
Table 83 Pre-paid Cards Sector Performance: 2002-2007
Table 84 Pre-paid Cards Sector Performance: % Growth 2002-2007
Table 85 Pre-paid Cards: Number of Cards by Issuer 2002-2006
Table 86 Pre-paid Cards: Number of cards by Operator 2002-2006
Table 87 Pre-paid Cards Transactions by Acquirer 2002-2006
Table 88 Pre-paid Cards Transaction Value by Operator 2002-2006
Table 89 Pre-paid Cards by Type 2004-2007
Table 90 Pre-paid Cards: Forecast Sector Performance: 2007-2012
Table 91 Pre-paid Cards: Forecast Sector Performance: % Growth 2007-2012
STORE CARD TRANSACTIONS IN SPAIN
HEADLINES
TRENDS
Value of store cards transactions grows sharply
Store cards migrate to Visa and MasterCard
COMPETITIVE LANDSCAPE
El Corte Inglés leads the store cards market
Alcampo store card
Carrefour increases its card services
Main supermarkets in Spain
Visa is chosen as the preferred payment system by Spanish retailers
PROSPECTS
Increased use of store cards
Number of store cards to considerably grow
SECTOR DATA
Table 92 Store Cards Sector Performance: 2002-2007
Table 93 Store Cards Sector Performance: % Growth 2002-2007
Table 94 Store Cards: Number of Cards by Issuer 2002-2006
Table 95 Store Cards Transactions by Acquirer 2002-2006
Table 96 Store Cards: Forecast Sector Performance: 2007-2012
Table 97 Store Cards: Forecast Sector Performance: % Growth 2007-2012