Co-branding key to unlocking Belgian cards market
Webteam: 11th March 2014 11:45am
Adapting to the issuing trend of co-branding is key for financial institutions looking to make an impact on the Belgian cards market. Several partnerships between banks and private label card issuers have already contributed to the broadening of the country's cards market and allowed room for increased segmentation, according to a new report by London-based Lafferty Research.
Like many of its neighbours in central Europe, the Belgian payment cards market is well developed. In 2012, payments by card represented 46.1 percent of all payment transactions in the country compared to 41 percent from money transfers, 10.6 percent from direct debits, two percent from electronic money and just 0.3 percent from cheques.
The cards market in Belgium is concentrated among four key players: BNP Paribas Fortis, Belfius, KBC and ING. Each of these banks co-brands with Bancontact/Mister Cash, the national Belgian debit card scheme, managed by Atos Worldline. Atos Worldline is also known as being the single biggest merchant acquiring player in Belgium, boasting 150,000 merchant accounts out of the country's estimated 155,000.
Other co-branding options include Maestro, which enables international spending and global ATM access, and Proton which indicates electronic purse functionality and preloading capabilities. There were 12.1 million debit cards with Proton functionality in issue at year-end 2012.
In Belgium, credit cards are principally in the form of deferred debit cards, which represents two-thirds of cards with a credit function.
Lafferty Research can reveal that the development of the credit cards market is impeded, from the issuers' point of view, by statutory rate ceilings on credit interest rates charged to consumers. The interest rate ceiling has also had an impact on the number of credit card providers currently active in Belgium.
Over 60 percent of the adult population in Belgium used some form of credit in 2012, with the figure reaching 80 percent in the 35-44 year old category. The number of credit cards in circulation currently stands at 3.9 million cards, an increase of 30 percent from 2005.
Analysis conducted by Lafferty Research shows that Belgium is a country of prudent borrowers with a culture of prompt repayments. Remarkably, only 19.8 percent of credit card outstandings are rolled over into interest-bearing income. The development of recurring payment services on credit cards offers customers an alternative to direct debits and reflects the needs of the sensible Belgian customers and their efficient spending habits.
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