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ISBN 1-85765-603-2

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Table of Contents

Executive Summary

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TABLE OF CONTENTS

Executive Summary

Market Definition

INTRODUCTION

MARKET SECTORS

MARKET POSITION

MARKET TRENDS

Table 1: Estimated Number of Credit and Debit Cards On Issue in the UK (000), 1995-1998

Market Size

THE TOTAL MARKET

BY MARKET SECTOR

Table 2: The UK Market for Plastic Cards by Number of Cards on Issue (000), 1994-1998

Table 3: Estimated UK Market for Plastic Cards by Turnover at Current Prices (£m), 1994-1998

Table 4: Volume and Value of Credit and Debit Card Transactions, 1994-1998

Table 5: Average Outstanding Credit Card Balances, 1994-1998

Table 6: Total Plastic Card Fraud Losses of UK Card Issuers (£m), 1994-1998

Table 7: UK Fraud Losses by Circumstances and Value (£m and percent), 1998

Table 8: Non-Bank and Bank Charge Cards by Annual Fee and Overdraft Limit (£ and £000), 1999

Table 9: Selected Option (Credit) Cards Issued by Major UK Retailers and Their Terms,1999

Table 10: Selected Budget Card Accounts Issued by Major UK Retailers and Their Terms, 1999

Table 11: Selected Standard UK Affinity Cards and Their Terms, 1999

Table 12: Selected Facility Cards, 1999

Table 13: Debit Card Transactions in Great Britain (million), 1994-1998

Table 14: UK Members of Switch, October 1999

Table 15: UK Switch Activity, 1994-1999

Table 16: Number of Debit Cards on Issue by Selected UK BanksÅ (000), 1994-1998

Industry Background

RECENT HISTORY

INDUSTRY CONCENTRATION

EUROPE

DISTRIBUTION

TRADE ASSOCIATIONS

Table 17: Number of UK Outlets Accepting Visa, MasterCard or Switch (000), 1994-1998

Table 18: UK Credit and Charge Cards in Circulation by Type (000), 1994-1998

Table 19: Major Bank Issuers of Visa and MasterCard Credit Cards with Personal Identification Numbers in the UK by Number of Cards on Issue (000),

1994-1998

Table 20: MasterCard and Visa Statistics, 1994-1998

Table 21: European Union Card Spending Per Capita and as a Proportion of Gross Domestic Product (£000 and percent), 1997

Table 22: The Euro - 'In' and 'Out' Countries, 1999

Table 23: Number of Automated Teller Machines and Cash Dispensers, 1994-1998

Competitor Analysis

THE MARKETPLACE

MARKET LEADERS

ADVERTISING AND PROMOTION

Table 24: British Acquirers by Market Share ( percent), 1998

Table 25: Estimated Market Shares of Credit/Charge Cards on Issue ( percent), 1998

Table 26: Estimated Number of Plastic Cards Issued by UK Institutions, 1998

Table 27: Standard Interest Rates Charged by Selected UK Card Issuers, 1st December 1999

Table 28: Debit CardsÅ on Issue by Bank ( percent), 1998

Table 29: UK Payment Trends - Total Transaction Volumes in the UK (million), 1994-1998

Table 30: Main Media Advertising Expenditure on Credit and Charge Cards (£000), Year Ending June 1999

Strengths, Weaknesses, Opportunities and Threats (SWOT)

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

Buying Behaviour

CONSUMER PENETRATION

Table 31: Single or Joint Plastic Card Ownership in Great Britain ( percent of adults), 1994 and 1999

Table 32: Ownership of Credit/Charge Cards in Great Britain ( percent of adults), 1994 and 1999

Table 33: Frequency of Credit or Charge Cards Use in Great Britain ( percent of adults), 1994 and 1999

Table 34: Frequency of Debit Cards Use in Great Britain ( percent of adults), 1999

Table 35: Spending by Type of Card by Value ( percent), August 1998 and 1999

Table 36: Credit Card Transactions by Sector by Volume and Average Value (000 and £), 1994 and 1998

Table 37: Debit Card Transactions by Sector by Volume and Average Value (000 and £), 1994 and 1998

Table 38: Growth Trends in the Volume of Credit and Debit Card Transaction Volumes and Values ( percent) 1994 and 1998

Table 39: Fuel Purchases in Great Britain by Payment Method ( percent of adults), 1994 and 1999

Table 40: Penetration of Credit by Type ( percent of adults), 1994 and 1999

Table 41: Average Levels of Debt Among British Borrowers By Region, May 1999

Outside Suppliers to the Industry

ELECTRONIC POINT OF SALE SUPPLIERS

ELECTRONIC FUNDS TRANSFER AT THE POINT OF SALES SUPPLIERS

AUTOMATED TELLER MACHINES

COMMUNICATIONS SUPPLIERS

CREDIT REFERENCE DATABASE COMPANIES

SUPPLIERS OF CARD FRAUD SERVICES

TRANSACTION PROCESSING NETWORKS

THE FUTURE

Current Issues

CONSUMER SPENDING

DIGITAL TELEVISION TRADING

BANK BRANCH CLOSURES

AUTOMATED TELLER MACHINE CHARGES

DIRECT LINE CHARGES

AMERICAN EXPRESS

JOHN LEWIS

EGGCARD

GOVERNMENT BANKING REVIEW

SMARTCARDS

INTERNET SECURITY

TESCO CLUBCARD BONUS

ENCRYPTION IS CRACKED

ELECTRONIC PURSE SCHEME

HALIFAX

LLOYDS TSB BANK PLC

Forecasts

FORECAST 1999 TO 2003

Table 42: Forecast Growth Factors for the UK Economy ( percent change in annual averages), 1999, 2000 and 2000 to 2004

Table 43: The Forecast UK Market for Plastic Cards by Turnover at Current Prices (£m), 1999-2003

Company Profiles

INTRODUCTION

DEFINITIONS

FURTHER INFORMATION

Further Sources

ASSOCIATIONS

PERIODICALS

DIRECTORIES

GENERAL SOURCES

HOPPENSTEDT BONNIER INFORMATION SOURCES

GOVERNMENT PUBLICATIONS

OTHER SOURCES

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EXECUTIVE SUMMARY

According to the Association of Payment Clearing Services (APACS), by the end of 1998, the total number of plastic cards of all types in issue in the UK reached 112 million. Standalone Automated Teller Machine (ATM), cheque guarantee and Eurocheque cards continued to decline, whilst credit, charge and debit cards increased by 12 percent.
The UK credit card market is in a highly competitive phase, as many new issuers try to lure customers away from the traditional card companies through the offers of bonus incentives and cut-price interest rates. According to one leading magazine, the top acquirer -- measured in number of transactions -- is NatWest Streamline, closely followed by Barclaycard. When considered in terms of the number of cards in issue, Barclays Bank PLC is in the lead, followed by Lloyds TSB Bank PLC.
Consumers in the UK prefer to use debit cards when purchasing food and drink, but the reverse is true when spending on the home, or for travel and entertainment. Credit cards are now increasingly used for unsecured borrowing. Research suggests that more than one-fifth of all short-term money is borrowed on a card, and less than a quarter of such borrowers pay off the outstanding balance each month.
In 1994, some £37.33bn was spent on credit cards, while in 1998 the amount had almost doubled to £71.87bn. Age, sex and region can play an important part in a consumer's attitude towards borrowing. Young adults (aged 16 to 24) are the most dependent on borrowing to supplement their lifestyle, with the highest levels of debt found in the South East.
Key Note forecasts that by the end of 1999, the total value of all UK card transactions will reach £139.3bn -- a figure which at current prices will increase by 44.7 percent to reach £201.63bn in 2003. Debit cards are forecast to have the largest increase; they are estimated to increase by 51.8 percent from £60.66bn in 1999 to £92bn by the end of 2003. The credit card sector is predicted to rise by 40.6 percent from £78.69bn in 1999 to £110.62bn by the end of 2003.

Text © 1999 Key Note

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