Payments Landscape in the Czech Republic: Opportunities and Risks to 2022

Payments Landscape in the Czech Republic: Opportunities and Risks to 2022

Summary

Cash remains the preferred payment instrument in the Czech Republic, accounting for 62.1% of the total payment transaction volume in 2018. However, the use of payment cards has been growing in line with rising awareness of electronic payments and an increase in the country’s banked population. Debit cards are the most popular card type, and are also increasingly being used for payments as consumers are gradually switching to debit cards for low-value transactions. With the gradual adoption of contactless technology, growth in online payments, the emergence of alternative payment solutions and the introduction of digital-only banks, the payment card market is anticipated to grow further over the forecast period (2018e-22f).

The frequency of debit card payments per card registered a strong review-period CAGR of 19.2%, with 89.3 times in 2018 - much higher than that of ATM cash withdrawals (16.8). Meanwhile, ATV declined with a CAGR of 4.6% over the review period. This suggests that consumers are gradually using debit cards for payments, mainly for low-value transactions.

Credit and charge cards are not very popular in the Czech Republic; penetration stood at 13.1 cards per 100 individuals in 2018. In terms of transaction value and volume, however, credit and charge cards recorded healthy growth, mainly due to rising merchant acceptance and enhanced security measures - a trend that is anticipated to continue over the forecast period.

The Czech Republic’s e-commerce market had robust growth, increasing from CZK67.0bn ($3.0bn) in 2014 to CZK135.0bn ($6.0bn) in 2018, at a review-period CAGR of 19.1%. The growing adoption of e-commerce in the country can be attributed to increasing confidence in e-commerce, online security and a number of webshops. According to a study, 90% of consumers shopped online at least once per year. Banks and card issuers are offering customized cards for online shopping. In addition, the availability of online payment solutions such as PayPal, paysafecard and Masterpass also supported this growth.

The report “Payments Landscape in the Czech Republic: Opportunities and Risks to 2022” provides detailed analysis of market trends in the Czech Republic's cards and payments industry. It provides values and volumes for a number of key performance indicators in the industry, including cash, cards, credit transfers, cheques, and direct debits during the review-period (2014-18e). The report also analyzes various payment card markets operating in the industry, and provides detailed information on the number of cards in circulation, transaction values and volumes during the review-period and over the forecast-period (2018e-22f). It also offers information on the country's competitive landscape, including the market shares of issuers and schemes.

The report brings together research, modeling, and analysis expertise to allow banks and card issuers to identify segment dynamics and competitive advantages. The report also covers details of regulatory policy and recent changes in the regulatory structure.

The report “Payments Landscape in the Czech Republic: Opportunities and Risks to 2022” provides:

• Current and forecast values for each market in the Czech Republic's cards and payments industry, including debit, credit and charge cards


• Detailed insights into payment instruments including credit transfers, direct debits, cards, cheques, and cash. It also, includes an overview of the country's key alternative payment instruments


• E-commerce market analysis


• Analysis of various market drivers and regulations governing the Czech Republic's cards and payments industry


• Detailed analysis of strategies adopted by banks and other institutions to market debit, credit and charge cards

The report “Payments Landscape in the Czech Republic: Opportunities and Risks to 2022” enables the user to:

• Make strategic business decisions, using top-level historic and forecast market data, related to the Czech Republic's cards and payments industry and each market within it


• Understand the key market trends and growth opportunities in the Czech Republic's cards and payments industry


• Assess the competitive dynamics in the Czech Republic's cards and payments industry


• Gain insights into marketing strategies used for various card types in the Czech Republic


• Gain insights into key regulations governing the Czech Republic's cards and payments industry

Companies Mentioned: Erste Bank, KBC Bank, Societe Generale Group, MONETA Money Bank, Raiffeisen Bank, UniCredit Bank, Citibank, Visa, Mastercard, Diners Club

Scope

• To regulate services defined under the Second Payment Service Directive (PSD2), the Czech Open Banking Standard was created by the Czech Banking Association. The service allows banks’ customers to give other companies permission to securely access their accounts. A number of banks such as Bank CREDITAS, CSAS (part of Erste Bank), ČSOB (part of KBC Bank), Air Bank, Komerční Banka (member bank of Société Générale Group) and Equa Bank are offering open banking services in the country.


• To offer convenient and faster payments, in November 2018 the Czech National Bank, the country’s central bank, launched an instant payment scheme. The system enables Czech individuals to transfer up to CZK400,000 ($17,805.28) instantly 24 hours a day, seven days a week, 365 days a year. As of March 2019, CSAS, Banka CREDITAS and Air Bank have joined this system, offering services to their customers.


• Contactless payments are gaining popularity in the Czech Republic. According to the Czech Bank Card Association, Czechs used contactless debit cards or smartphones for 853 million times in 2018, in comparison to 638 million times in 2017. To complement the growth in contactless payments, payments facilitated through wearable technology are being introduced in the Czech Republic. Garmin Pay, developed by the manufacturer of wearables and mobile GPS products, Garmin, allows users to make contactless payments using the Garmin Smartwatch. The payment method was launched in the Czech Republic in collaboration with Moneta Money Bank, Visa and Mastercard in September 2018.

Reasons to buy

• Make strategic business decisions, using top-level historic and forecast market data, related to the Czech Republic's cards and payments industry and each market within it.


• Understand the key market trends and growth opportunities in the Czech Republic's cards and payments industry.


• Assess the competitive dynamics in the Czech Republic's cards and payments industry.


• Gain insights into marketing strategies used for various card types in the Czech Republic.


• Gain insights into key regulations governing the Czech Republic's cards and payments industry.