Competitor market shares and developments in the UK Plastic Card Market

Overview 1
Catalyst 1
Summary 1
Methodology 1
Table of Contents 2
Table of figures 3
Table of tables 4
Competitor Shares and Developments in the UK Card Market 5
Lloyds Group is now the largest credit card issuer by cards in issue 5
Barclaycards remains by far the dominant credit card brand 8
Barclaycard has the largest portfolio of 'primary' cards 9
The number of standard and premium cards by brand highlights the largest issuers' mass market strategy 11
Usage and primacy rates are driven by card features 12
The number and value of transactions per issuer is broadly in line with market share 14
Usage rates are low for most cards despite high rates of primacy 17
Lloyds Group has the highest value of balances outstanding 19
Not surprisingly, Citigroup and MBNA continue to have the highest balance per card on average 21
Repayment rates are significantly higher for cards providing incentives for transacting 22
The debit card market is led by the major high street retail banks 24
Barclays' leads the market, with 9.9 million debit cards in issue 24
Debit is growing strongly in day to day use 27
Santander now leads the private label card market 30
Private label usage rates are likely to drop as a result of the recession 32
Prepaid cards have strong growth potential, but are likely to remain niche 34
Barclaycard, Tesco Personal Finance and Santander have performed strongly in 2009 38
Barclaycard is pushing forward in creating incentives for card usage 39
Barclaycard is leading the market in developing contactless payments 39
Barclaycard is developing a new loyalty program 41
Barclaycard is forming strategic partnerships with key brands and service providers 42
Tesco Personal Finance is poised for strong growth as it moves to become a bank 43
Santander will expand in the cards market, to the detriment of MBNA 44
Card issuers must choose between diversifying and refocusing on core strengths 46
Appendix 47
Definitions 47
AAGR 47
Affinity card 47
APACS 47
ATM-only card 47
Average transaction value 47
Balances outstanding 47
Bank of England base rate 47
CAGR 47
Charge card 48
Co-branded card 48
Credit card 48
Debit card 48
FLA 48
Frequency of use 48
Non-standard 48
Private label card 48
POS terminal 49
Turnover per card per year 49
Methodology 49
Primary research 49
Secondary research 49
Further reading 50
Ask the analyst 51
Datamonitor consulting 51
Disclaimer 51
List of Tables
Table 1: Consumer perceptions of the features on their credit card by brand 13
Table 2: UK prepaid cards by number of cards in issue by brand and issuing group 36
Table 3: Prepaid transaction by type, frequency, value and average balance per card per year 38
Table 4: Current relevant publications, 2008-09 50
Table 5: Future relevant publications, 2009 51
List of Figures
Figure 1: Following the merger with HBOS, Lloyds now dominates the market 6
Figure 2: The newly formed Lloyds Group is now the UK market leader with 22.3% of cards in issue in H1 09 7
Figure 3: Barclaycard is the largest player by brand ahead of both Lloyds TSB, and HBOS 8
Figure 4: Barclaycard by far has the highest number of primary cards in the market 9
Figure 5: Tesco and John Lewis/Waitrose are the primary card for more than 75% of their customers 10
Figure 6: 40% of Barclaycard's cards in issue are premium branded 11
Figure 7: There were 278 million transactions made on Barclaycard branded credit cards in 2008, ahead of NatWest and Lloyds TSB branded products 15
Figure 8: Transaction values follow a very similar pattern to transaction numbers, with Barclaycard and NatWest leading the market in 2008 16
Figure 9: Regardless of total transaction values, average spend per transaction is highly variable 17
Figure 10: Tesco and American Express have the highest proportion of cards that are used all the time 18
Figure 11: Lloyds Group now has the highest level of balances outstanding, followed closely by MBNA 19
Figure 12: Lloyds holds 21% of the market by balances outstanding but is closely followed by MBNA at 20% 20
Figure 13: Citigroup has the highest average balance per card, growing 30% since June 2007 22
Figure 14: Repayment rates are higher for cards with rewards and incentives, with cardholder most likely to revolve on Virgin Money and MINT cards 23
Figure 15: The number of debit cards in issue has increased in H1 2009 25
Figure 16: The debit card market is evenly divided between the dominant big leading banks 26
Figure 17: POS makes up more than 70% of all debit transactions by volume 27
Figure 18: POS accounts for 60% of all debit transactions by value 28
Figure 19: Average spend levels are highly variable by issuer 29
Figure 20: Santander is by far, the dominant issuing group of private label cards as at H1 2009 30
Figure 21: Debenhams is the leading brand for private label store cards 31
Figure 22: The private label sector is fragmented, with Debenhams leading with a 17% market share 32
Figure 23: The overall number of cancelled private label cards in the UK market is high 33
Figure 24: With the highest brand awareness, Virgin and PayPal lead the prepaid cards market 34
Figure 25: The prepaid cards sector is dominated by four issuers accounting for 75% of the market 35
Figure 26: POS dominates prepaid card usage, with £5.5 billion of POS transactions in 2008 37
Figure 27: Barclaycard used viral marketing techniques as part of its campaign 40
Figure 28: MyBarclaycard will offer users in-depth online card management services 42
Figure 29: Barclaycard is strengthening its branding with younger consumers through strategic sponsorship 43
Figure 30: The Santander rebranding of Abbey has begun in London 45