Comparative Landscape in Turkey Cards and Payments Market
The report titled “Turkey Cards and Payments Market Outlook to 2023 – Rapid Acceptance of TROY Cards and Contactless Cards Coupled with Rising Penetration of Credit Cards to Drive Market Growth” provides a comprehensive analysis on the cards and payments industry covering various aspects including the introduction and genesis, market size of debit and credit card by value and volume of transaction, number of cards in circulation and average transaction size, segmentation by domestic transactions by domestic card, International transactions with domestic cards, domestic transactions with international cards, further segmented into cash withdrawals and shopping purchases. It also covers market challenges, growth drivers, trends and developments, issues, comparative landscape in cards and payments market by issuer and operator and regulatory framework of the industry. The report concludes with market projections and analyst recommendations highlighting major opportunities and cautions.
Turkey Cards and Payments Market Overview and Size
The credit and debit card business of Turkey has witnessed strong growth owing to increasing value of transactions, volume of transaction and cards in circulation. The debit card value of transaction grew at a rate faster than that of credit cards, even when both posed double digit growth rate. Adoption of specific payment methods in Turkey will inevitably be influenced by the fact that a large proportion of Turkish citizens remains without a bank account – just over a third of the population is unbanked. The use of cash is particularly prevalent for micropayments including the small and daily expenditures such as newspapers, taxi journeys and coffees. The payments industry of Turkey will have to work hard to mitigate Turkish shoppers over to digital methods of paying for these items.
Turkey Card Market Segmentation
Domestic Transaction with Domestic Credit Card (Cash Withdrawals and Shopping Purchases): Volume of domestic transaction with domestic credit card witnessed 4 year CAGR of 4.8% and 8.7% for cash withdrawals and shopping purchases respectively during 2014-2018. However, the Value of domestic transaction with domestic credit card witnessed a four year CAGR for cash withdrawals and shopping purchases of 14.4% and 12.3% respectively. This happened majorly due to higher value of transaction on limited or same number of credit card transactions.
International Transaction with Domestic Credit Card (Cash Withdrawals and Shopp-ing Purchases): Volume of International transactions using a domestic credit card peaked to an all-time high in 2018, with a four year CAGR (2014-2018) of 15.7%. The volume of cash withdrawals on international transaction using domestic credit card reported a negative four year CAGR (2014-2018) of -2.9% as the transaction fee levied by ATMs is very high, because of which cardholders have preferred shopping purchases over cash withdrawals. Consumer familiarity with credit cards has increased and cards are often the preferred means of meeting credit needs of Turkish consumers and play a valuable role in domestic financial management, by making installment purchases with their cards for the things they cannot pay in one go.
Domestic Transaction with International Credit Cards (Cash withdrawals and Shopping Purchases): The volume and value of domestic transaction with international credit card is growing at a rapid four year CAGR of 24.9% and 20.4% respectively. This shows a lot of growing potential in international credit card business.
Domestic Transaction with Domestic Debit Card (Cash withdrawals and Shopping Purchases): Volume of domestic transaction with domestic debit card witnessed a four year CAGR of 7.8% and 25.8% for cash withdrawals and shopping purchases respectively. On the other hand, the Value of domestic transaction with domestic debit card witnessed a four year CAGR for cash withdrawals and shopping purchases of 16.3% and 35.0% respectively. The value of shopping purchases showed an exorbitant growth because debit card holders are in the process of majorly switching from cash withdrawals to direct merchant swipes.
International Transaction with Domestic Debit Card (Cash withdrawals and Shopping Purchases): Volume of International transactions using a domestic debit card peaked to an all-time high in 2018, with a four year CAGR (2014-2018) of 47.1%. The volume of cash withdrawals on international transaction using domestic credit card reported a single four year CAGR (2014-2018) of only 5.9% as the foreign exchange rate fluctuations come into picture, because of which cardholders have preferred shopping purchases over cash withdrawals.
Domestic Transaction with International Debit Card (Cash withdrawals and Shopping Purchases): The international travelers are spending more in Turkey on business trips or tourism. The volume and value of domestic transaction with international debit card is growing at rapid four year CAGR of 28.7% and 39.9% respectively during 2014-2018. Rising incomes and economic stability in recent years however has started to turn the tide in debit card use. In line with most European banking markets, debit cards are issued in conjunction with a bank account and were primarily used for cash withdrawal, serving as a cost-efficient alternative for branch-based cash withdrawals.
Average Value of Transaction for Debit and Credit Card: Since the citizens of Turkey are mediocre risk takers hence, they prefer to do less of credit card transactions. It has been observed that the average value of transaction on debit card has been higher than credit card.
Comparative Landscape in Turkey Cards and Payments Market
The card market in Turkey was moderately concentrated with presence of major banks capturing a larger market share and other handful of banks which do not have a dedicated cards business. The cards market is further segmented in debit and credit cards. Turkey market has fierce competition, i.e., the credit card players have been highly competitive and experimental in product offerings and follow business strategies to expand their reach to untapped audience and retain existing clients. On the other hand, the debit card market was also observed to be competitive as the players are highly prone to lose out market share because of continuous technological advancement in the financial technologies leading to obsolescence of existing technologies. The players continuously tend to develop new technologies and keep in increasing their network with member merchants in order capture more and more target audience. The major parameters on the basis of which they compete are technological advancement- financial technology such as faster transaction service provider, contactless card, virtual cards, chip and pin enabled cards, reward points and benefits on shopping limits, personalized banking services and customer support.
Turkey Cards and Payments Market Future Outlook and Projections
Credit Cards: The overall credit card market future by volume of card in circulation is expected to rise at a slow growth rate due to time taken by people to subscribe for a credit card is comparatively high. The volume and value of credit card transaction is expected to surge at a pace higher than the previous five years because of the increased spending limits, better reward point program and technological advancement leading to ease of doing transactions.
Debit Cards: The overall debit card market by volume and value of transaction is expected to get double by 2023. The growth rate projected is higher than the credit cards due faster adaptability of debit cards in the economy. Also, as and when the untapped population actively participates in the economic activity, they would be first exposed to bank cards instead of credit cards leading to surge in value and volume of debit card transaction in next five years.