Abstract
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive
environment
Product coverage
Consumer lending; Financial cards and payments
Executive summary
Strong Growth Due to Good Economic Performance
There was strong growth in the number of financial cards in Denmark during the
review period, with this underpinned by good economic growth in the country.
Consumers thus began to spend more on goods, socialising and travel.
Simultaneously, consumers began to shift from using cash to financial cards,
with the latter regarded as more secure and more convenient. With financial
cards gaining a more everyday positioning, they began to be used for smaller
transactions on a more frequent basis.
Spending Slows in 2008 Due to Economic Recession
Transaction volume saw a notable dip in growth in 2008 in comparison to the
previous year, while constant value declined sharply, with this being the
first decline of the review period. In 2008, there was a global economic
downturn, which started to impact Denmark in the latter half of the year.
Consequently, Danish consumers cut back on unnecessary expenditure and opted
for lower-priced purchases, resulting in constant value decline. Minimal
transaction volume growth was however maintained in the year due to the
increasingly everyday positioning of financial cards.
Security for Internet Payments Improved
During the review period, PBS A/S improved security for online payment systems
such as BetalingService (e-banking) as well as Dankort and other secure
systems used for e-commerce in Denmark. This kept online fraud down during the
review period, at a time when growth in e-commerce soared. A joint venture
between the Danish Bankers Association, the National Consumer Agency and PBS
A/S meanwhile succeeded in informing and guiding consumers regarding safe
means of trading on the internet.
Leading Banks Dominate Financial Cards
Most Danish consumers are loyal to their banks and are unlikely to shop around
for deals. Consequently, the leading banks are also the leading players in
financial cards, with Danske Bank Group and Nordea Bank thus being the leading
players. However, in the last two years of the review period the leading banks
became more reluctant to offer credit, due to the looming financial crisis.
This resulted in many consumers having to seek out smaller players, often
accepting less attractive interest rates and fees in the process.
Consequently, the leaders lost share in 2007, while "others" saw a strong
growth in share.
Continued Strong Growth in Card Volume but Transaction Volume Growth Slows
Danish consumers are increasingly comfortable with the use of financial cards,
with this likely to maintain high card volume levels during the forecast
period. In addition, there is expected to be strong growth in the number of
gift cards, which is expected to result in continued strong growth for card
volume overall. There may also be a higher incidence of consumers shopping
around for the best credit or charge card deals, due to the economic downturn.
This would result in consumers having a greater number of separate cards,
which would also boost overall card volume. However, the economic downturn is
expected to result in slower growth for transaction volume during the forecast
period, particularly in 2009 and 2010.
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