Payments Landscape in Croatia: Opportunities and Risks to 2023

Payments Landscape in Croatia: Opportunities and Risks to 2023

Summary

The Croatian payment card market is growing, with every individual holding more than two cards on average, mainly because of the country's high banked population. Despite high penetration, card usage frequency in Croatia is among the lowest compared to its peers, reflecting the dominance of cash for payments. However, with a recovering economy, improving banking infrastructure, lower interchange fees, and wider merchant acceptance of payment cards, the volume and value of card payments are anticipated to record forecast-period (2019e-23f) compound annual growth rates (CAGRs) of 7.7% and 8.3% respectively.

Debit cards remain the preferred card type among Croatians, with penetration of 1.8 debit cards per every individual in 2019. Debit cards are increasingly used for payments, accounting for 74.1% of total card payment volume in 2019. The frequency of debit card payments has risen from 20.6 in 2015 to 34.4 in 2019 at a strong CAGR of 13.7% during 2015-19e. This has been supported by the growing preference for contactless payments, as well as Croatian banks encouraging customers to use debit cards by offering reward points and discounts. Charge cards are preferred over credit cards in Croatia, reflecting the debt-averse nature of Croatians and their general preference for paying off outstanding balances by the end of the interest-free period.

The Croatian e-commerce market increased in value from HRK2.4bn ($374.95m) in 2015 to HRK3.5bn ($539.48m) in 2019, driven by growing internet and smartphone penetration and increased consumer purchasing power. Online shopping events such as Black Friday are also playing their part. To capitalize on this trend, banks are offering cards exclusively for online purchases, while the availability of alternative payment solutions such as Google Pay, PayPal, and paysafecard will further boost e-commerce growth in the coming years.

The report “Payments Landscape in Croatia: Opportunities and Risks to 2023” provides detailed analysis of market trends in the Croatian cards and payments industry. It provides values and volumes for a number of key performance indicators in the industry, including cards, credit transfers, direct debits, and cheques during the review-period (2015-19e). 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 (2019e-23f). 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 Croatia: Opportunities and Risks to 2023” provides -

• Current and forecast values for each market in the Croatian cards and payments industry, including debit, credit, and charge cards


• Detailed insights into payment instruments including credit transfers, direct debits, cheques, and cards. 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 Croatian 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 Croatia: Opportunities and Risks to 2023” enables the user to -

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


• Understand the key market trends and growth opportunities in the Croatian cards and payments industry


• Assess the competitive dynamics in the Croatian cards and payments industry


• Gain insights into marketing strategies used for various card types in Croatia


• Gain insights into key regulations governing the Croatian cards and payments industry

Companies mentioned:Intesa Sanpaolo, UniCredit Bank, Erste Bank, Raiffeisen Bank, OTP Bank, Société Générale Group, Hrvatska poštanska banka, Visa, Mastercard, American Express, Diners Club, Aircash, Keks Pay, Erste Wallet

Scope

• There has been constant consolidation in the Croatian banking and payments market, with large banks and card issuers acquiring smaller competitors. Hrvatska poštanska banka (HPB) acquired Jadranska banka (JABA) in April 2019. The cards of JABA customers were replaced with HPB cards. The move means HPB continues to strengthen its position in the Croatian banking space; it now boasts more than 600,000 customers and 58 outlets. In May 2019, OTP Bank announced the signing of an acquisition agreement for a majority stake in SKB Banka, the Slovenian subsidiary of Société Générale Group. This acquisition will pave the way for OTP Bank to access new markets in the Central and Eastern European region. And in July 2018, Privredna banka Zagreb (PBZ) (part of Intesa Sanpaolo) acquired Veneto Banka. These moves will result in further concentration in the banking and card issuing spaces.


• American Express has a presence in Croatia through its association with PBZ. However, in 2018 American Express terminated its bank licensing agreements in the EU, including Croatia. As a result, all American Express cards issued by PBZ will be terminated after December 31, 2019. PBZ has selected Visa as its new partner, meaning all American Express cards will be replaced with Visa cards.


• Alternative payments are gaining momentum in Croatia, with banks and payment services providers launching new solutions. The latest of these is m-wallet, launched by Zagrebacka banka (part of UniCredit Group) in February 2019, which allows the bank's customers to make contactless mobile payments. In December 2018, Erste Bank launched its mobile payment solution Keks Pay, enabling users to make P2P fund transfers to other Keks Pay users via the recipient's mobile phone number. Users can also make in-store payments by scanning a merchant's QR code. And in August 2018, Google launched its mobile payment solution Google Pay in Croatia, allowing users to make in-store, online, and in-app payments.

Reasons to buy

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


• Understand the key market trends and growth opportunities in the Croatian cards and payments industry.


• Assess the competitive dynamics in the Croatian cards and payments industry.


• Gain insights into marketing strategies used for various card types in Croatia.


• Gain insights into key regulations governing the Croatian cards and payments industry.