Competitor market shares and developments in the UK Plastic Card Market

Table of Contents

OVERVIEW

• Catalyst
• Summary
• Methodology

COMPETITOR SHARES AND DEVELOPMENTS IN THE UK CARD MARKET

• Lloyds Group is now the largest credit card issuer by cards in issue
  • Barclaycards remains by far the dominant credit card brand
  • Barclaycard has the largest portfolio of ‘primary' cards
  • The number of standard and premium cards by brand highlights the largest issuers' mass market strategy
  • Usage and primacy rates are driven by card features
  • The number and value of transactions per issuer is broadly in line with market share
  • Usage rates are low for most cards despite high rates of primacy

• Lloyds Group has the highest value of balances outstanding
  • Not surprisingly, Citigroup and MBNA continue to have the highest balance per card on average
  • Repayment rates are significantly higher for cards providing incentives for transacting

• The debit card market is led by the major high street retail banks
  • Barclays' leads the market, with 9.9 million debit cards in issue
  • Debit is growing strongly in day to day use

• Santander now leads the private label card market
  • Private label usage rates are likely to drop as a result of the recession

• Prepaid cards have strong growth potential, but are likely to remain niche
• Barclaycard, Tesco Personal Finance and Santander have performed strongly in 2009
  • Barclaycard is pushing forward in creating incentives for card usage
  • Tesco Personal Finance is poised for strong growth as it moves to become a bank
  • Santander will expand in the cards market, to the detriment of MBNA

• Card issuers must choose between diversifying and refocusing on core strengths

APPENDIX

• Definitions
  • (Untitled sub-section)

• Methodology
  • (Untitled sub-section)

• Further reading
• Ask the analyst
• Datamonitor consulting
• Disclaimer

TABLES

• Table: Consumer perceptions of the features on their credit card by brand
• Table: UK prepaid cards by number of cards in issue by brand and issuing group
• Table: Prepaid transaction by type, frequency, value and average balance per card per year
• Table: Current relevant publications, 2008 - 09
• Table: Future relevant publications, 2009

FIGURES

• Figure: Following the merger with HBOS, Lloyds now dominates the market
• Figure: The newly formed Lloyds Group is now the UK market leader with 22.3% of cards in issue in H1 09
• Figure: Barclaycard is the largest player by brand ahead of both Lloyds TSB, and HBOS
• Figure: Barclaycard by far has the highest number of primary cards in the market
• Figure: Tesco and John Lewis/Waitrose are the primary card for more than 75% of their customers
• Figure: 40% of Barclaycard' s cards in issue are premium branded
• Figure: There were 278 million transactions made on Barclaycard branded credit cards in 2008, ahead of NatWest and Lloyds TSB branded products
• Figure: Transaction values follow a very similar pattern to transaction numbers, with Barclaycard and NatWest leading the market in 2008
• Figure: Regardless of total transaction values, average spend per transaction is highly variable
• Figure: Tesco and American Express have the highest proportion of cards that are used all the time
• Figure: Lloyds Group now has the highest level of balances outstanding, followed closely by MBNA
• Figure: Lloyds holds 21% of the market by balances outstanding but is closely followed by MBNA at 20%
• Figure: Citigroup has the highest average balance per card, growing 30% since June 2007
• Figure: Repayment rates are higher for cards with rewards and incentives, with cardholder most likely to revolve on Virgin Money and MINT cards
• Figure: The number of debit cards in issue has increased in H1 2009
• Figure: The debit card market is evenly divided between the dominant big leading banks
• Figure: POS makes up more than 70% of all debit transactions by volume
• Figure: POS accounts for 60% of all debit transactions by value
• Figure: Average spend levels are highly variable by issuer
• Figure: Santander is by far, the dominant issuing group of private label cards as at H1 2009
• Figure: Debenhams is the leading brand for private label store cards
• Figure: The private label sector is fragmented, with Debenhams leading with a 17% market share
• Figure: The overall number of cancelled private label cards in the UK market is high
• Figure: With the highest brand awareness, Virgin and PayPal lead the prepaid cards market
• Figure: The prepaid cards sector is dominated by four issuers accounting for 75% of the market
• Figure: POS dominates prepaid card usage, with £5.5 billion of POS transactions in 2008
• Figure: Barclaycard used viral marketing techniques as part of its campaign
• Figure: MyBarclaycard will offer users in-depth online card management services
• Figure: Barclaycard is strengthening its branding with younger consumers through strategic sponsorship
• Figure: The Santander rebranding of Abbey has begun in London