CARD TRANSACTIONS
The growth in card use is strongly linked to household consumption. Despite economic turmoil, household consumption increased 2.3% in 2009, while the value of all card payments on Norwegian cards increased by 6.1% to NOK 645.9 billion. The total number of transactions grew by 8.4% to 1.28 billion transactions, equivalent to 246 transactions per capita in 2009, according to the Bank of Norway.
The growth in card value is a bit higher than expected based on analysis of historical data, indicating a continued strengthening of the position of cards vs. cash. This is also supported by cash withdrawal statistics, which reveal that ATM withdrawals on cards issued in Norway fell by 5.6% (6.2% domestic) if measured in no. of transactions and 3.0% ( 4.3% domestic) in value.
POS transactions on Norwegian cards used domestic and abroad increased to 1.18 bn (9.8%) with a value of NOK 486.5 billion (9.1%). Of this, the value of cash withdrawals at POS remained constant at NOK 27.8 billion, but the no. of such transactions continued to decline and was reduced by 2.9% compared to 2008.
DEBIT AND CREDIT
No. of debit card transactions in 2009 increased by 90.0 million (8.2%) year-on-year to record-high 1192.8 million, and value increased by NOK 30.4 billion (5.8%) to 556.3 billion. In comparison, the no. of credit card transactions increased by 10.1 million (17.9%) to 66.6 million in 2009, and card value grew by NOK 8.6 billion (14.8%) to 66.6 billion in total.
While credit cards saw two-digit relative growth in 2009, in absolute figures, the no. of debit transactions outgrew credit transactions by 9 to 1 and value by 3.5 to 1. Comparing the relative growth rates to previous years, both debit and credit cards experienced lower growth in 2009 than 2008, but higher growth than 2007. One conclusion drawn is there are no signs that Norwegian card use was adversely affected by the economic situation. Considering the development in household consumption, Norwegian card use even outgrew expectations.
An interesting side note is that the use of charge cards declined in 2009, after sporting several years of growth. One plausible explanation could be card issuers migrating charge card customers to more profitable credit cards. The decline could also simply be the result of increased competition from the increased number of credit card brands on the Norwegian market, with customers actively switching from charge to credit cards.
CARDS ISSUED
The number of issued cards increased by one million from 2008 to 2009, up from 10.6 to 11.6 million cards. 55.9% of cards were chip cards at the year-end of 2009.
For the first time, the number of debit features declined (down 0.9%) and ended at 11.8 million at year-end. Note that BankAxept and Visa debit are counted as two different features – so a great number of cards have two features.
Assuming the figures are correct, the no. of credit cards saw explosive growth, up by 1.2 million (26.9%) to 5.5 million features. The number of charge cards remained stable. In absolute figures, the growth in credit features is previously unparalleled in Norway. Compared to earlier years, 26.9% growth is very strong (vs. 1.0% in 2008, 20.9% in 2007, 22.9% in 2006). Apparently, the economic downturn did not deter banks’ determination to push credit cards, and 2009 also saw a number of new card concepts put on the market.
However, card turnover did not keep up with the growth in credit card features. Spend per credit feature dropped from NOK 13,370 in 2008 to NOK 12,095 2009, and the no. of transactions per credit feature fell from 13.0 to 12.1. This is a clear indication that competition is intensifying in the credit card sector. Still, the transactions and spend per credit feature were higher in 2009 than they were in 2007, so the size of the cake is also increasing – even if not as fast as the growth in no. of card features...To gain access to the full article with illustrations and complete text, order your subscription to the MACAW Card Bulletin today. Contact sales[at]macawresearch.com or phone +47 412 69 669.
