New Market Study, "Emerging Opportunities in Germany's Cards and Payments Industry: Market Size, Trends and Drivers, Strategies, Products and Competitive Landscape", Has Been Published

New Financial Services market report from Timetric: "Emerging Opportunities in Germany's Cards and Payments Industry: Market Size, Trends and Drivers, Strategies, Products and Competitive Landscape"

by Bill Thompson

(WireNews+Co) - b - 12 March 2013

Germany has the world's fourth-largest economy and presents numerous challenges for international entrants into the cards and payments industry. Consumers continue to give cash based payments precedence over card based payments. Total card spend declined at an average rate of 0.3% from 2005 to 2009 according to figures collected by the Bank for International Settlements (BIS). Barclaycard has operated in the market for 20 years and has over one million credit cards in circulation. Germany has been depicted as cash intensive and unwilling to adopt payment cards on a grander scale by statistics from the BIS and European Central Bank, but there is positive speculation regarding opportunities which could emerge in Germany in the coming years. Germany has an advanced saving level and low level of debt. The household savings rate was around 10% at the end of 2008, compared to 0.5% for the US and 8% for the EU as a whole. This higher than average saving rate has meant a different approach to payments in the country, as cash takes precedence over electronic payments. In retail sales there has been a slow but steady decline in the percentage of cash payments over the review period (2008-2012), a decline that has been offset by the absolute increase in transaction volume. Debit cards in particular have become increasingly popular owing to a greater adoption rate and technical improvements. The German card industry is ripe for growth with a highly developed payments infrastructure and, compared to other economies, a relatively low level of card usage. Payments at POS are around 60% in cash, while 30% are paid by debit card and the remaining 10% is split fairly evenly between credit cards and merchant cards.

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Key Highlights

- The industry grew substantially in volume and value during the review period. In terms of transaction volume, the card payment industry grew at a CAGR of 5.55% from 4.4 billion transactions in 2008 to 5.4 billion in 2012.
- Key initiatives are being taken by the Central Bank of Germany (Deutsche Bundesbank) to facilitate cashless transactions, including the adoption of the secure SEPA system, the implementation of EMV technology and development of e-payment systems.
- Germany plans to completely migrate to EMV technology by February 1, 2016. EMV based cards and POS terminals will facilitate the expansion of the contactless payment system and NFC technology in the retail sector.
- Another important development in the German contactless payment system is the launch of the Touch & Travel mobile ticketing service by Germany's rail transport company, Deutsche Bahn, in 2011.
- The future of ELV is uncertain because of a debate in Germany about the deactivation of magnetic stripe based cards and upcoming changes to the European direct debit system.

Scope

- This report provides a comprehensive analysis of Germany's cards and payments industry
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Companies Mentioned in this Report: Commerzbank AG, Deutsche Bank, Landesbank Berlin Holding AG, Comdirect Bank, Credit Mutuel-CIC, Targobank

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