Financial Cards and Payments in Eastern Europe

February 2021

Financial cards and payments were significantly impacted by Coronavirus (COVID-19) during 2020. While the pandemic had a negative effect on overall consumer speeding in this year, it also helped to speed up the ongoing move away from cash. Consumers and retailers tried to avoid handling cash for health reasons, boosting card use, and, in particular, contactless payments. Further growth in e-commerce, with consumers locked down for extended periods, also increased card usage for making payments.

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Key Findings

COVID-19 hits consumer spending

Consumer spending patterns in Eastern Europe were significantly affected by the pandemic in 2020. When possible, people avoided handling cash for hygiene reasons, encouraging greater use of card and, in particular, contactless payments. Debit cards were the main beneficiary of this, with people looking to keep control of their spending in a difficult economic environment.

Cards outstrip cash in 2020

While cash remains an important payment mode, it continues to lose out to alternative forms of payment. This development is also being supported by growing merchant acceptance of card and contactless payments as well as, in many cases in 2020, an increase in the maximum contactless spending limit on cards. Consumers are therefore increasingly being won over by the convenience of cashless payment methods, particularly via their smartphones. Government policies will also encourage the trend towards cashless transactions.

Sberbank the number one card issuer

Sberbank remains by far the leading financial card player in Russia, and therefore also Eastern Europe, in terms of both number of cards and transaction value. Its Spasibo programme continues to gain new partners (merchants), with recent additions including M Video, Tekhnosila, Dochki Synochki and Lamoda. Sberbank updated and relaunched Spasibo in mid-2019 in an attempt to simplify terms of use for consumers and increase bonuses.

Return to growth expected from 2021

In spite of the economic impact of COVID-19, the post-pandemic period is expected to see a return to positive annual growth rates for consumer payments from 2021. M-commerce will continue to record dynamic growth over the forecast period, while cash will continue to struggle.

Introduction

Scope
Key findings

Regional Overview

Pandemic reduces overall consumer payment transactions
Card payments developing strongly in Eastern Europe
Bounceback expected after COVID-19-induced spending decline
Card transactions continue to take share from cash
Use of cash for payments collapses in Russia over 2015-2020
Cards and electronic direct/ACH transactions continue gaining share
Debit cards continue growing in 2020
Debit cards the dominant force
Pandemic further encourages the use of m-commerce payments

Leading Companies and Brands

Visa and Mastercard remain the dominant financial card operators
Visa and Mastercard with a wide presence across the region

Forecast Projections

Consumer payments to return to positive growth from 2021…
…but will not return to 2019 levels until 2023
Continued move away from cash
Contactless payments receive a boost during the pandemic
Further strong growth expected for m-commerce over 2020-2025…
…albeit at slower rates than over the 2015-2020 period

Country Snapshots

Czech Republic: Market Context
Czech Republic: Competitive and Retail Landscape
Czech Republic: M-commerce and Consumer Payment Value
Hungary: Market Context
Hungary: Competitive and Retail Landscape
Hungary: M-commerce and Consumer Payment Value
Poland: Market Context
Poland: Competitive and Retail Landscape
Poland: M-commerce and Consumer Payment Value
Romania: Market Context
Romania: Competitive and Retail Landscape
Romania: M-commerce and Consumer Payment Value
Russia: Market Context
Russia: Competitive and Retail Landscape
Russia: M-commerce and Consumer Payment Value
Ukraine: Market Context
Ukraine: Competitive and Retail Landscape
Ukraine: M-commerce and Consumer Payment Value
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