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environment
Product coverage
Consumer lending; Financial cards and payments
Executive summary
Strong growth with plentiful new product development
Financial cards saw strong growth in terms of card volume during the review
period, with this linked to numerous new launches. In 2003, high-value general
purpose pre-paid cards appeared with the launch of Swiss Bankers Travel Cash
Card, with further launches towards the end of the review period. Credit cards
meanwhile notably benefited from the launch of co-branded cards by the leading
retailers in the country, Migros and Coop. These retailers not only launched
their own cards but also began to accept credit cards, greatly increasing the
everyday usage of these cards.
"Other" pre-paid cards dynamic in 2008
"Other" pre-paid cards entered in 2004 with the MANOR gift card from Maus
Fréres Group SA and continued to see strong growth towards the end of the
review period. In 2007, "other" pre-paid cards received another big boost as
dominating Swiss retailers Migros and Coop each launched gift cards.
Consequently, "other" pre-paid cards remained the most dynamic area in
financial cards in 2008 over the previous year in terms of card volume.
Increasing competition constrains some product areas
The strong development of co-branded credit cards and pre-paid cards however
posed growing competition for other product areas in financial cards. Store
cards' growth notably slowed, as Jelmoli department stores and Valartis Bank
AG launched the first co-branded credit card in Switzerland in autumn 2006.
The introduction of the first free retail co-branded credit cards in the same
year by Migros and Coop also hindered store cards. In addition, the growing
acceptance of credit cards and pre-paid cards hindered growth for charge cards.
Strong leaders see share erosion
UBS AG, PostFinance and Credit Suisse Group continued to be strong leaders in
terms of financial cards volume in 2007, benefiting from their
well-established reputations and wide product ranges. These players remained
the three leaders overall in financial cards throughout the review period.
However, all three lost share in terms of card volume in 2007 over the
previous year, with this due to increasing competition from numerous new
entrants towards the end of the review period, such as GE Money Bank and
Valartis.
Continued growth due to wider acceptance and scope
Financial cards is expected to see continued strong growth in terms of cards
in circulation during the forecast period. Growth will be supported by the
strong development of credit cards, which saw a shift towards everyday usage
thanks to the entry of Migros and Coop. Financial cards in general will
benefit from wider acceptance among retailers and travel and tourism players
during the forecast period, with growth also encouraged by the increasingly
international positioning of many products. Growth will also be spurred by the
ongoing dynamism of "other" pre-paid cards, with Swiss consumers being
attracted by gift cards. In addition, Schweizer Reisekasse Reka is expected to
drive growth in this area, with "other" pre-paid cards being viewed as a
convenient alternative to the company' s Reka cheques.
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