An evolving Nordic gift card market drives distribution channel innovation. In shopping malls, new machines are finding their way to high trafficked areas. The gift card kiosks reduce personnel costs and drive up card sales, and constitute an innovative channel for card distribution, especially in the business to consumer market.
The business case is simple. A kiosk has the potential to reduce the cost of issuing gift cards considerably compared to a physical employee. The kiosk is quicker, reduces queues at other points of sale, frees up personnel time, and it drives up sales.
Kiosks also represent opportunities beyond the core functionality of selling cards. A printed receipt represents a potential marketing channel. For example, while the card payment is being processed and the card dispensed, ads for promotions at select retailers can be displayed.
For gift card kiosks to be an economically viable option, card sales volumes are critical. Major shopping malls, hypermarkets and other large format retailer outlets are eligible destinations with many visitors. It is also conceivable to distribute an open loop product through card kiosks in other high traffic locations, such as train stations. Despite these opportunities, kiosks are likely to remain a niche channel.
This post is an extract from an article on gift card kiosks in MACAW Card Bulletin issue 27 - Gift Card Kiosks. To subscribe to the MACAW Card Bulletin, please contact sales@macawresearch.com
Showing posts with label norway. Show all posts
Showing posts with label norway. Show all posts
Thursday, August 26, 2010
Saturday, May 29, 2010
Payments in Norway
The Bank of Norway recently published its much anticipated annual report on payments in Norway, providing 2009 statistics and updated information on the status of the Norwegian payment systems. MACAW research summarizes and comments.
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.
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.
Tuesday, February 24, 2009
New marketing law
Norway’s revised marketing law comes into effect on 1 June 2009. After attending a seminar organized by the Consumer Ombudsman in Norway, we conclude that telemarketers will face new hurdles, while three interesting opportunities arise: contests, coupons and bargain gifts.
The marketing law governs marketing, business practices and documentation requirements, and applies primarily to activities directed towards consumers, but also contains a chapter on protecting the interests of businesses. The revised marketing law replaces the current marketing law of 1972, and incorporates elements from EU directives – including a “black list” of marketing activities that are banned.
The black list contains activities related to unfair business practices, with emphasis on “misleading” and “aggressive” practices. For example, it is misleading to employ certificates or quality or environmental brands without fulfilling requirements and attaining necessary permissions to use them. Aggressive practices can, for instance, be creating false impressions that a consumer has won something, when there is no prize involved – or the reward requires costs for the consumer.
Telemarketers face increasing regulation. The weekend is declared a telemarketing free zone, which confines telemarketing activities to 09:00-21:00 Monday through Friday. Computer assisted calls will no longer be permitted, to prevent “no voice on the other end” cases, which have been a cause for distress among some consumers. There will also be stronger information requirements for telemarketers, and most importantly, consumers will have to provide written consent to telemarketing sales. The format of the consent could be e-mail, SMS, fax or some other form of communication, as long as the format supports the necessary information requirements.
The most visible changes to consumers will likely be three elements that are strongly regulated in the current law, but which have been omitted or moderated in the revised marketing law. These are contests, coupons and bargain gifts (Norwegian “tilgift”).
Contests with random winners are not allowed in the current marketing law, only skill-related contests. This helps explain why we have quiz questions in commercials and TV shows with questions such as “How much is 2+2?” or “What is the prime minister’s name?” When the new law comes into effect in June 2009, this requirement is forfeited – and we will be spared the ridiculously easy questions designed to circumvent the current law.
Coupons are an interesting area, as they can assume many formats – not just the old “cut the piece from the newspaper” variant some associate the word with. To which extent will coupons be virtual, and how will they be distributed? SMS is a viable channel, and mobile ticket solutions already exist in the Norwegian market, provided by the mobile marketing company InCent.
Bargain gifts may well represent the most interesting change. A bargain gift is essentially a bundled additional product provided along with the main product you purchase. In the current law, there is a requirement that a bargain gift needs to be associated with the main product, for instance a bargain gift t-shirt along with a pair of jeans is accepted, while a CD is not. This requirement becomes obsolete with the new law. In theory, we could see cars being bundled with apartments, credit cards bundled with iPhones, household appliances with a new mortgage (there’s an incentive to switch banks!), or movie tickets to go with flowers for your date.
The new marketing law comes into effect 1 June 2009. Marketers, get ready, set… go!
The marketing law governs marketing, business practices and documentation requirements, and applies primarily to activities directed towards consumers, but also contains a chapter on protecting the interests of businesses. The revised marketing law replaces the current marketing law of 1972, and incorporates elements from EU directives – including a “black list” of marketing activities that are banned.
The black list contains activities related to unfair business practices, with emphasis on “misleading” and “aggressive” practices. For example, it is misleading to employ certificates or quality or environmental brands without fulfilling requirements and attaining necessary permissions to use them. Aggressive practices can, for instance, be creating false impressions that a consumer has won something, when there is no prize involved – or the reward requires costs for the consumer.
Telemarketers face increasing regulation. The weekend is declared a telemarketing free zone, which confines telemarketing activities to 09:00-21:00 Monday through Friday. Computer assisted calls will no longer be permitted, to prevent “no voice on the other end” cases, which have been a cause for distress among some consumers. There will also be stronger information requirements for telemarketers, and most importantly, consumers will have to provide written consent to telemarketing sales. The format of the consent could be e-mail, SMS, fax or some other form of communication, as long as the format supports the necessary information requirements.
The most visible changes to consumers will likely be three elements that are strongly regulated in the current law, but which have been omitted or moderated in the revised marketing law. These are contests, coupons and bargain gifts (Norwegian “tilgift”).
Contests with random winners are not allowed in the current marketing law, only skill-related contests. This helps explain why we have quiz questions in commercials and TV shows with questions such as “How much is 2+2?” or “What is the prime minister’s name?” When the new law comes into effect in June 2009, this requirement is forfeited – and we will be spared the ridiculously easy questions designed to circumvent the current law.
Coupons are an interesting area, as they can assume many formats – not just the old “cut the piece from the newspaper” variant some associate the word with. To which extent will coupons be virtual, and how will they be distributed? SMS is a viable channel, and mobile ticket solutions already exist in the Norwegian market, provided by the mobile marketing company InCent.
Bargain gifts may well represent the most interesting change. A bargain gift is essentially a bundled additional product provided along with the main product you purchase. In the current law, there is a requirement that a bargain gift needs to be associated with the main product, for instance a bargain gift t-shirt along with a pair of jeans is accepted, while a CD is not. This requirement becomes obsolete with the new law. In theory, we could see cars being bundled with apartments, credit cards bundled with iPhones, household appliances with a new mortgage (there’s an incentive to switch banks!), or movie tickets to go with flowers for your date.
The new marketing law comes into effect 1 June 2009. Marketers, get ready, set… go!
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