Table of Contents

Overview 1
Catalyst 1
Summary 1
Executive Summary 2
Market context 2
Competitor and product overview 2
Forecasting the payment card market in Spain 3
Table of Contents 4
Table of figures 5
Table of tables 6
Market Context 7
Market overview 7
Demographics 7
Economy 9
GDP 10
Real GDP growth 10
GDP per capita 11
Sectoral composition of the economy 12
Inflation 13
Distribution of income 14
Segmentation of liquid assets 15
Unemployment 16
Market size 16
Payment cards in the context of consumer payments 16
Payment card statistics 17
Cards in issue 17
Number of transactions 19
Value of transactions 21
Card acceptance 23
POS statistics 23
ATM statistics 24
Market structure 25
Categories of banks 25
Private commercial banks 26
Cajas de Ahorros (savings banks) 26
Cooperativas de Crédito (co-operative banks) 27
Interbank structures for cards 27
Regulatory environment 28
Industry regulators 28
Banco de España 28
Industry associations 28
Asociación Española de Banca-AEB 28
Confederación Española de Cajas de Ahorros-CECA 28
Unión Nacional de Cooperativas de Crédito-UNACC 29
Asociación Nacional de Establecimientos Financieros de Crédito (ASNEF) 29
Asociación de Usuarios de Servicios Bancarios (AUSBANC) 29
Credit bureaux 29
The Banco de España manages a public registry 29
Equifax operates a private sector credit bureau in Spain 29
Experian entered the market in 2000 29
Regulatory issues in the market 30
European consumer credit directive 30
Interchange fees come under scrutiny in Spain 31
Key issues 32
Fraud and EMV 32
Spain is lagging behind in the conversion to EMV 32
Low fraud losses and high conversion costs are the key factors in the slow roll-out 32
SEPA 33
The main impact on Spain will be in terms of tackling fraud and ensuring cards can be used across the region. 34
Competitor and product Overview 36
Card scheme market shares 36
Pay now cards 36
Cards in issue 36
Value of transactions 37
Deferred debit and charge cards 38
Cards In issue 38
Transaction values 39
Credit cards 40
Number of cards 40
Value of transactions 41
Card issuer market shares 42
Pay now cards 42
Cards in issue 42
The pay later market 43
Cards in issue 43
The credit card market 44
Cards in issue 44
Balances outstanding 45
Competitor developments 46
Consolidation of the Spanish market has slowed considerably 46
Foreign lenders have a strong presence in the Spanish market 47
Product analysis 48
Pay later card design 48
Spanish consumers are often able to choose their repayment plan 48
Credit limits 48
Loyalty programs 49
Product innovation 51
La Caixa has introduced a "save the change" program 51
Card appearance continues to be an area of focus 52
Pre-paid Cards 53
The focus on innovation has limited results 53
Forecasting the payment card market in Spain 55
Forecasting the pay now card market 55
Forecasting the credit card market 56
Forecasting the deferred debit and charge card market 57
Conclusions 59
The Spanish payment card market is in a healthy state 59
Card penetration and use is high 59
Issuers continue to innovate 59
As a result of these factors, the outlook for the Spanish market is a positive one 59
However, there are challenges that are still to be faced 59
The market continues to face regulatory challenges 59
Consumers still prefer cash 60
The deferred debit and charge card market is set to decline 60
APPENDIX 61
Supplementary data 61
Market context 61
Forecasting the payment card market in Spain 64
Definitions 65
AAGR 65
Affinity card 65
CAGR 65
Co-branded card 65
Credit card 66
Deferred debit and charge card 66
EMV 66
EPC 66
ePurse 66
Merchant Service Charge 66
Pay now cards 66
PoS terminal 67
Private label cards 67
Methodology 67
Cards and Payments Database 67
Further reading 67
Ask the analyst 68
Datamonitor consulting 68
Disclaimer 69
List of Tables
Table 1: GDP per capita for selected European countries, 2006 12
Table 2: GINI Coefficient for selected European countries 15
Table 3: Segmentation of liquid assets in Spain, 2006 16
Table 4: Falling interchange fees in Spain 2006-2009 32
Table 5: A selection of Spanish credit cards, 2007 49
Table 6: A selection of Spanish payment card loyalty schemes 51
Table 7: Datamonitor's forecast for the Spanish pay now market, 2007-2011 56
Table 8: Datamonitor's forecast for the Spanish credit card market, 2007-2011 57
Table 9: Datamonitor's forecast for the Spanish deferred debit and charge card market, 2007-2011 58
Table 10: Population numbers and demographic splits in Spain and other major European countries, 2006 61
Table 11: Population over 20 in Spain and other major European countries, 2006 61
Table 12: GDP at current rates across European countries, 2006 62
Table 13: Real GDP growth rates based on constant rates to 2000, 2002-06 62
Table 14: Inflation in selected European countries, 2002-06 63
Table 15: The total number of ATM terminals and the number of people per ATM, 2002-06 63
Table 16: The total number of POS terminals and the number of people per terminal, Spain 2002-06 63
Table 17: Penetration level of cards in selected European countries, 2006 64
Table 18: Credit card balances outstanding in Spain, 2004-2006 64
Table 19: Pay now card forecast forecasts indexed to 2006 64
Table 20: Credit card forecast forecasts indexed to 2006 65
Table 21: Charge card forecast forecasts indexed to 2006 65
Table 22: Current relevant Datamonitor publications, 2007 68
Table 23: Future relevant Datamonitor publications, 2008 68
List of Figures
Figure 1: Country view of Spain, 2007 7
Figure 2: Spain has the fifth largest population in Western Europe, 2006 8
Figure 3: Spain has the highest proportion of adults out of the Western European nations 9
Figure 4: Spain has the fifth largest GDP in Western Europe, 2006 10
Figure 5: Spain has enjoyed a period of accelerating economic growth, 2002-2006 11
Figure 6: The service sector dominates the Spanish economy, 2006 13
Figure 7: The rate of inflation in Spain continues to accelerate, 2002-2006 14
Figure 8: Cash remains the payment tool of choice for Spanish consumers, 2002-2006 17
Figure 9: The number of payment cards in Spain continues to grow, 2002-2006 18
Figure 10: Spain has the second highest level of card penetration in Europe. 19
Figure 11: Debit cards continue to account for the majority of card transaction volumes, Spain, 2002-2006 20
Figure 12: Debit cards are the most frequently used type of payment card, Spain, 2002-2006 21
Figure 13: Debit cards account for the majority of the value of card transactions in Spain, 2002-2006 22
Figure 14: Credit cards have the highest average transaction value in Spain, 2002-2006 23
Figure 15: Spain has the most extensive POS coverage in Europe, 2002-2006 24
Figure 16: Spain also has the largest ATM network, 2002-2006 25
Figure 17: The three pillars of Spanish banking, 2006 26
Figure 18: Banks in Spain in the three pillars, 2005 27
Figure 19: Regulatory overview of Spain, 2006 28
Figure 20: Visa is increasingly dominant in the Spanish pay now market, 2002-2006 37
Figure 21: Visa's dominance in debit card transaction value is increasing, 2002-2006 38
Figure 22: Visa is also the dominant scheme in the deferred debit and charge card market, 2002-2006 39
Figure 23: Visa is also the dominant scheme in deferred debit and charge card transaction values, 2002-2006 40
Figure 24: The majority of Spanish credit cards are issued on the Visa scheme, 2002-2006 41
Figure 25: Visa accounts for more than half of the value of transactions on credit cards, 2002-2006 42
Figure 26: The Spanish pay now market is dominated by four major players 43
Figure 27: The Spanish pay later card market is somewhat fragmented, 2006 44
Figure 28: The Spanish credit card market is dominated by BBVA and Caja Madrid, 2006 45
Figure 29: La Caixa is the leading Spanish credit card issuer by outstandings, 2006 46
Figure 30: Mergers and acquisitions in the Spanish banking market, 1998-2005 47
Figure 31: La Caixa has a wide range of rewards for collectors of Puntos Estellas loyalty points 50
Figure 32: The La Caixa "Ahorra la Cambio" product helps cardholders build up a savings account 52
Figure 33: La Caixa allows cardholders to personalize cards with their own photographs 53
Figure 34: Growth in the Spanish debit card market will be driven by increased card use driving transaction values, 2006-2011 55
Figure 35: Datamonitor forecasts the Spanish credit card market to grow strongly, 2006-2011 57
Figure 36: The Spanish deferred debit and charge card market is expected to peak in 2010 58