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1 Timetric Publisher Sample Phone: (US) or or (Int'l) Hours: Monday - Thursday: 5:30am - 6:30pm EST Fridays: 5:30am - 5:30pm EST customerservice@marketresearch.com MarketResearch.com

2 Picture source: Shutterstock The Cards and Payments Industry in the UK: Emerging Trends and Opportunities to 2019 Published Date: April 2015

3 Summary Timetric s The Cards and Payments Industry in the UK: Emerging Trends and Opportunities to 2019 report provides detailed analysis of market trends in the UK s cards and payments industry. It provides values and volumes of a number of key performance indicators (KPIs) operating in the industry, including credit transfers, check payments, cash transactions, payment cards and direct debits during the review period ( ). The report also analyses various payment card markets operating in the industry and provides detailed information on the number of cards in circulation, transaction values and transaction volume, during the review period and over the forecast period ( ). Additionally, it offers information pertaining to the competitive landscape in the country, including market shares of issuers and schemes. This brings together Timetric s research, modeling, and analysis expertise, to develop an insightful report. This allows banks and card issuers to identify segment dynamics, competitive advantage and profiles of card issuers operating in the country. The report also covers a detailed regulatory policies and recent changes in regulatory structure and information, on card fraud statistics. Synopsis Timetric s The Cards and Payments Industry in the UK: Emerging Trends and Opportunities to 2019 report provides top-level market analysis, information and insights on the UK s cards and payments industry, including: Current and forecast values for each market of the UK s cards and payments industry, including debit cards, credit cards and charge cards. Also includes detailed analysis of the prepaid cards market. Detailed insights on payment instruments including credit transfers, check payments, cash transactions, payment cards and direct debits. Also, includes overview of country's key alternative payment instruments. Analysis of various market drivers and regulations governing the UK s cards and payments industry. Detailed analysis of marketing strategies adopted for selling debit, credit and charge cards used by banks and other institutions in the market. Comprehensive analysis of consumer attitudes and buying preferences for cards. The competitive landscape of the UK s cards and payments industry. Reasons to buy Make strategic business decisions, using top-level historic and forecast market data, related to the UK s cards and payments industry and each market within it. Understand the key market trends and growth opportunities within the UK s cards and payments industry. Assess the competitive dynamics in the UK's cards and payments industry. Gain insights into marketing strategies used for selling various card types in the UK. Gain insights into key regulations governing of the UK s cards and payments industry.

4 1 Payment Instruments 1.1 Current Payments Environment Figure 1: The UK Payment Instruments Shares by Transaction Value (%), 2010 and Credit Transfer Checks Direct Debit Payment Cards Cash Credit Transfer Direct Debit Checks Payment Cards Cash Note: Payment cards include transactions made at POS terminals only Please refer to the Appendix for detailed information on the above data points Source: UK Payment Council and Timetric analysis ` Timetric Figure 2: The UK Payment Instrument Shares by Transaction Volume (%), 2010 and Cash Payment Cards Credit Transfer Cash Payment Cards Credit Transfer Direct Debit Checks Direct Debit Checks Note: Payment cards include transactions made at POS terminals only Please refer to the Appendix for detailed information on the above data points Source: UK Payment Council and Timetric analysis Timetric

5 CAGR ( ) Payment Cards in Circulation by Type (Million) 2 Payment Cards 2.1 Payment Cards Analysis Figure 3: The UK Growth in Payment Cards Transaction Value and Number of Cards in Circulation by Type, % 180 6% 4% 2% 0% -10% 0% 10% % CAGR ( ) Debit Cards Credit Cards Charge Cards Note: The size of the bubble represents the cards transaction value Please refer to the Appendix for detailed information on the above data points Source: Timetric analysis Timetric

6 Transaction Volume (Billion) Transaction Value (US$ Billion) Volume and Value of Payment Card Transactions by Type Figure 4: The UK Volume and Value of Payment Card Transactions by Type (%), , , , ,200 1, Debit Cards Credit Cards Charge Cards Debit Cards Credit Cards Charge Cards Note: Please refer to the Appendix for detailed information on the above data points Source: Timetric analysis Timetric

7 2.2 Methodology All Timetric cards and payments reports are created by following a comprehensive, four-stage methodology. This includes market study, research, analysis and quality control. Timetric s dedicated research and analysis teams consist of experienced professionals with background in research, consulting, statistics and economics. Timetric adheres to the Codes of Practice of the Market Research Society ( and the Society of Competitive Intelligence Professionals ( 1) Research A. Sources Collection of the latest market-specific data from a wide variety of industry sources: Central bank statistics Supranational organizations Payment associations Payment schemes/networks Company filings Banking associations Payment regulatory bodies B. Expert opinion Insights from leading experts in the payments industry Analysis of third-party opinion and forecasts: Industry reports central banks and regulators Specialized industry publications C. Data consolidation and verification Consolidation of data and opinion to create historical datasets Creation of models to benchmark data across sectors and regions 2) Analysis A. Market forecasts Feeding forecast data into market models: Macroeconomic indicators Payment industry-specific drivers Analysis of payment industry database to identify trends: Latest trends in cards and payments Key drivers of the insurance industry B. Report writing Analysis of market data and forecasts Identify trends, drivers and challenges in the industry Benchmark key products and companies in the against their competitors 3) Quality Control A. Templates Detailed process manuals

8 Standardized report templates and accompanying style guides Use of in-house developed model for forecasting key payment indicators Multi-layer quality-control procedures B. Quality-control process Peer review Senior-level QC Cross-checks for data integrity Data verification and normalization through comparison of data from multiple sources 4) Exchange Rate Table 1: Annual Average Exchange Rate F 2016F 2017F 2018F 2019F GBP per US$ Source: Timetric analysis Timetric Related Reports Germany s Cards and Payments Industry: Emerging Opportunities, Trends, Size, Drivers, strategies, Products and Competitive Landscape France s Cards and Payments Industry: Emerging Opportunities, Trends, Size, Drivers, strategies, Products and Competitive Landscape Italy s Cards and Payments Industry: Emerging Opportunities, Trends, Size, Drivers, strategies, Products and Competitive Landscape Spain s Cards and Payments Industry: Emerging Opportunities, Trends, Size, Drivers, strategies, Products and Competitive Landscape

9 TABLE OF CONTENTS 1 Definitions and Methodology Definitions Methodology Key Facts and Events Executive Summary Payment Instruments Current Payments Environment Alternative Payment Instruments M-payments PayPal Skrill MasterPass Ukash Paym Pingit Starbucks mobile wallet Zapper Zapp Regulations in the Cards and Payments Industry Regulatory Framework Status of implementation of Payment Services Directive (PSD) in the UK Interchange fee regulation Single European Payment Area (SEPA) implementation in the UK Best practice guidelines set by the UK Payment Cards Association Anti-Money Laundering (AML) Foreign Direct Investment (FDI) Regulations Analysis of Cards and Payments Industry Drivers Demographic Drivers Economic Drivers Infrastructure Drivers Business Drivers Market Segmentation and New Product Launches Market Segmentation and Targeting Consumer cards Commercial cards New Product Launches Payment Cards Payment Cards Analysis Volume and value of payment card transactions by type Personal vs commercial cards Debit Cards Debit Cards Market Analysis... 41

10 9.1.1 Debit cards transaction volume and value by channel Debit cards scheme shares in terms of number of cards in circulation and transaction value Debit cards issuers market shares Debit cards comparison Credit Cards Credit Cards Market Analysis Credit cards transaction volume and value by channel Credit cards scheme shares in terms of number of cards in circulation and transaction value Credit cards issuers market share Credit cards comparison Charge Cards Charge Cards Market Analysis Charge cards transaction volume and value by channel Charge cards scheme shares in terms of number of cards in circulation and transaction value Charge cards comparison Commercial Cards Commercial Cards Market Analysis Commercial cards comparison Card Fraud Statistics Card Fraud Analysis Card Issuers Lloyds Bank Barclays Bank HSBC The Royal Bank of Scotland Santander UK American Express Prepaid Cards Prepaid Cards Market Analysis Prepaid cards comparison Merchant Acquiring Merchant Acquiring Market Analysis Appendix Tables Contact Timetric About Timetric Timetric s Services Disclaimer... 84

11 LIST OF FIGURES Figure 1: The UK Payment Instruments Shares by Transaction Value (%), 2010 and Figure 2: The UK Payment Instruments Share by Transaction Volume (%), 2010 and Figure 3: The UK Total Population and Structure, Figure 4: The UK Internet and Mobile Penetration (Users per 100 Inhabitants), Figure 5: The UK Economic Indicators, Figure 6: The UK Number of ATMs, POS Terminals and Branch Banking Composition, Figure 7: The UK Household Final Consumption Expenditure per Capita and Retail Sales Figure 8: The UK E-Commerce Value (US$ Billion), Figure 9: The UK Outbound and Inbound Trips Volume and Spending, Figure 10: The UK Cards and Payments Industry Segmentation by Card Type, Figure 11: The UK Growth in Payment Cards Transaction Value and Number of Cards in Circulation by Type, Figure 12: The UK Volume and Value of Payment Card Transactions by Type (%), Figure 13: The UK Volume and Value of Contactless Payment Card Transactions, Figure 14: The UK Personal and Commercial Cards, Transaction Volume and Value (%), Figure 15: The UK Growth in Debit Cards Transaction Value and Number of Debit Cards in Circulation, Figure 16: The UK Debit Cards Transaction Volume and Value by Channel, Figure 17: The UK Debit Cards Scheme Shares in Terms of Number of Cards in Circulation and Transaction Value (%), Figure 18: The UK Debit Cards Issuers Market Shares in Terms of Transaction Value (%), Figure 19: The UK Growth in Credit Cards Transaction Value and Number of Credit Cards in Circulation, Figure 20: The UK Credit Cards Transaction Volume and Value by Channel, Figure 21: The UK Credit Cards Scheme Shares in Terms of Number of Cards in Circulation and Transaction Value (%), Figure 22: The UK Credit Cards Issuers Market Share in Terms of Transaction Value (%), Figure 23: The UK Credit Cards Issuers Market Share in Terms of Outstanding Balance (%), Figure 24: The UK Growth in Charge Cards Transaction Value and Number of Charge Cards in Circulation, Figure 25: The UK Charge Cards Transaction Volume and Value by Channel, Figure 26: The UK Charge Cards Scheme Shares in Terms of Number of Cards in Circulation and Transaction Value (%), Figure 27: The UK Number of Commercial Cards in Circulation and Transaction Value, Figure 28: The UK Shares of Various Types of Card Fraud in Terms of Transaction Value (%), 2010 and Figure 29: The UK Number of Prepaid Cards in Circulation and Transaction Value, Figure 30: The UK Merchant Acquirers Transaction Volume and Value, Figure 31: The UK Merchant Acquirers Market Share in Terms of Transaction Value (%), Figure 32: The UK Number of Retail Outlets and Total Merchant Accounts (Thousand),

12 LIST OF TABLES Table 1: Key Definitions... 7 Table 2: Annual Average Exchange Rate... 9 Table 3: The UK Key Facts, Table 4: Regional Benchmarking of the UK Payment Cards, Table 5: The UK Mode of Entry of Foreign Banks Table 6: Cards for High-Income Consumers, Table 7: Cards for Travelers, Table 8: Cards for Students and Youth Population, Table 9: Cashback Credit Cards, Table 10: Shopping Reward Point Credit Cards, Table 11: Balance Transfer Credit Cards, Table 12: Commercial Cards Comparison and Key Features, Table 13: The UK New Product Launches Table 14: The UK Pay Now, Average Interchange Fees: Intra-Network Transactions (%), Table 15: The UK Pay Now, Average Merchant Service Charge: Domestic Transactions (%), Table 16: The UK Debit Cards Comparison and Key Features, Table 17: The UK Pay Later, Average Interchange Fees: Intra-Network Transactions (%), Table 18: The UK Pay Later, Average Merchant Service Charge: Domestic Transactions (%), Table 19: The UK Gold Credit Cards Comparison and Key Features, Table 20: The UK Premium Credit Cards Comparison and Key Features, Table 21: The UK Charge Cards Comparison and Key Features, Table 22: The UK Commercial Cards Comparison and Key Features, Table 23: The UK Prepaid Cards Comparison and Key Features, Table 24: The UK Payment Instruments Transaction Value (GBP Billion), Table 25: The UK Payment Instruments Transaction Value (US$ Trillion), Table 26: The UK Payment Instruments Transaction Volume (Billion), Table 27: The UK Number of Payment Cards in Circulation by Type (Million), Table 28: The UK Volume of Payment Card Transactions by Type (Million), Table 29: The UK Value of Payment Card Transactions by Type (GBP Billion), Table 30: The UK Value of Payment Card Transactions by Type (US$ Billion), Table 31: The UK Personal and Commercial Cards Transaction Value (GBP Billion), Table 32: The UK Personal and Commercial Cards Transaction Value (US$ Billion), Table 33: The UK Personal and Commercial Cards Transaction Volume (Million), Table 34: The UK Number of Debit Cards in Circulation (Million), Table 35: The UK Debit Cards Transaction Volume and Frequency by Channel, Table 36: The UK Debit Cards Total and Average Transaction Value by Channel, Table 37: The UK Debit Cards Total and Average Transaction Value by Channel, Table 38: The UK Number of Debit Cards in Circulation By Scheme (Million), Table 39: The UK Debit Cards Transaction Value By Scheme (GBP Billion), Table 40: The UK Debit Cards Transaction Value By Scheme (US$ Billion), Table 41: The UK Debit Cards Transaction Value by Issuer (GBP Billion), Table 42: The UK Debit Cards Transaction Value by Issuer (US$ Billion), Table 43: The UK Number of Credit Cards in Circulation (Million), Table 44: The UK Credit Cards Transaction Volume and Frequency by Channel, Table 45: The UK Credit Cards Total and Average Transaction Value by Channel, Table 46: The UK Credit Cards Total and Average Transaction Value by Channel, Table 47: The UK Number of Credit Cards in Circulation By Scheme (Million), Table 48: The UK Credit Cards Transaction Value By Scheme (GBP Billion), Table 49: The UK Credit Cards Transaction Value By Scheme (US$ Billion), Table 50: The UK Credit Cards Transaction Value By Issuer (GBP Billion), Table 51: The UK Credit Cards Transaction Value By Issuer (US$ Billion), Table 52: The UK Credit Cards Balance Outstanding By Issuer (GBP Billion), Table 53: The UK Credit Cards Balance Outstanding By Issuer (US$ Billion), Table 54: The UK Number of Charge Cards in Circulation (Million), Table 55: The UK Charge Cards Transaction Volume and Frequency by Channel, Table 56: The UK Charge Cards Total and Average Transaction Value by Channel, Table 57: The UK Charge Cards Total and Average Transaction Value by Channel, Table 58: The UK Number of Charge Cards in Circulation By Scheme (Million), Table 59: The UK Charge Cards Transaction Value By Scheme (GBP Billion), Table 60: The UK Charge Cards Transaction Value By Scheme (US$ Billion), Table 61: The UK Number of Commercial Cards in Circulation (Million), Table 62: The UK Commercial Cards Transaction Value (GBP Billion), Table 63: The UK Commercial Cards Transaction Value (US$ Billion),

13 Table 64: The UK Card Fraud (GBP Million), Table 65: The UK Card Fraud (US$ Million), Table 66: The UK Number of Prepaid Cards in Circulation (Million), Table 67: The UK Prepaid Cards Transaction Value (GBP Billion), Table 68: The UK Prepaid Cards Transaction Value (US$ Billion), Table 69: The UK Merchant Acquirers Transaction Volume by Channel (Billion), Table 70: The UK Merchant Acquirers Total Transaction Value (GBP Billion), Table 71: The UK Merchant Acquirers Total Transaction Value (US$ Billion), Table 72: The UK Retail Outlets and Merchant Accounts (Thousand), Table 73: The UK Merchant Acquirers Transaction Value (GBP Billion), Table 74: The UK Acquirers Transaction Value (US$ Billion),