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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

Region:Europe

Author(s):Madhur Chopra and Harsh Mittal

Product Code:KR910

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Published On

November 2019

Total pages

218

About the Report

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

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.

Key Topics Covered in the Report

  • Stake Holders in Turkey Card Market
  • Genesis of Turkey Card Market
  • Credit and Debit Card Coverage
  • Market Size by Number of Cards in Circulation (2014-2018)
  • Market Size by Value of Transaction (2014-2018)
  • Market Size by Volume of Transactions (2014-2018)
  • Market Segmentation of Turkey Cards Market (2014-2018) on Cash Withdrawals and Shopping Purchases
  • Sectoral Spending by Debit and Credit Card (2018)
  • Volume of Transaction
  • Value of Transaction
  • Growth Drivers, Trends and Developments in Turkey Card Market
  • Issues and Challenges in Turkey Card Market
  • Competition Scenario in Turkey Card Market
  • Turkey Card Market Future Outlook and Projections, 2019-2023  
  • Analyst Recommendations

Products

Key Target Audience

  • Credit/ Debit Card Operator
  • Credit/ Debit Card Issuers
  • Prepaid Card Issuers/ Operators 
  • Local/ Foreign Bank
  • Reward/ Loyalty Program Business Operators
  • Payment gateway provider
  • Credit/ Debit Card Issuer
  • POS Device Manufacturers
  • Debit/ Credit Card Manufacturing companies
  • ATM Manufacturing Entities
  • Investors

 

Time Period Captured in the Report:

  • Historical Period: 2014-2018
  • Forecast Period: 2019-2023

Companies

Key Segments Covered

Credit cards

  • Value of transaction
  • Volume of transaction
  • Number of Credit card in circulation
  • Domestic Transaction Using Domestic Credit Card
  • International Transaction Using Domestic Credit Card
  • Domestic Transaction using International Credit Card
  • Sectoral Spending

Debit Cards

  • Value of transaction
  • Volume of transaction
  • Number of Debit card in circulation
  • Domestic Transaction Using Domestic Debit Card
  • International Transaction Using Domestic Debit Card
  • Domestic Transaction using International Debit Card
  • Sectoral Spending

 

Companies Covered in Turkey Card Market:

Issuers

  • Turkiye Cumhuriyeti Ziraat Bankasi AS
  • Turkiye Vakiflar Bankasi TAO
  • Turkiye Halk Bankasi AS
  • Denizbank
  • Yapi ve Kredi Bankasi AS
  • Turkiye Is Bankasi AS (Is bank)
  • Garanti Bankasi AS
  • Ak bank TAS
  • Finansbank AS
  • TEB AS
  • Seker Bankasi AS
  • HSBC Bank AS
  • Citigroup Inc

Operators

  • Visa Inc
  • MasterCard International Inc
  • American Express Co
  • Troy

Table of Contents

1. Executive Summary

Market Size and Overview

Market Segmentation

Competitive Analysis

Future Outlook and Projections

2. Research Methodology

2.1. Market Definitions

2.2. Abbreviations

2.3. Market Size and Modeling

2.4Consolidated Research Approach

2.5Market Sizing Turkey Card Market

2.6Variables (Dependent and Independent)

2.7Multi Factor Based Sensitivity Model for Credit Card Market

2.8Multi Factor Based Sensitivity Model for Debit Card Market

2.9Regression Matrix- Credit Card Market by Value of Transaction

2.10Limitations-Credit Card Market by Value of Transaction

2.11Final Conclusion- Credit Card Market

2.12Regression Matrix- Debit Card Market by Value of Transaction

2.13Limitations- Debit Card Market by Value of Transactions

2.14Final Conclusion- Debit Card Market

3. Stakeholders in the Turkey Card Market (including list of major debit card and credit card issuer and operators, 2018)

3.1. Card Issuer Side (Entity, Number of Entities in the Ecosystem and Major Players)

3.2. Card Operator Side (Entity, Number of Entities in the Ecosystem and Major Players)

4. Genesis of Credit and Debits Cards

4.1. Incubation Phase

Launch of Turkey’s First Credit Card

Inception of Interbank card center

4.2. Infrastructure phase (including stakeholders in business cycle of EMV Migration)

Introduction of Contactless card

Full chip and pin migration

4.3. Digital Phase (including Comparative Analysis on the Basis of Mobile Device Owners Using 
Mobile Payments)

Launch of first national digi wallet

Online Payments (including Number of Unique Debit and Credit Cards used for Online Payments and 
Turkey Distribution of Online Payment by Payment Amount Range)

Contactless Cards (including transaction volume and value, 2016-2018)

Troy card

5. Comparison of Turkey Cards Market with European Cards Market

5.1Debit Card Ownership Rate

5.2Debit and Credit Cards in Circulation

5.3Number of POS and ATM Terminals in Circulation

5.4Country Based Payment Transactions

5.5Region Wise Card Distribution in turkey

6. Operating Model (Flowchart, Fees for Various Revenue Streams for Issuer Bank Including 

Annual Charges, Shopping Interest Rate, Cash Withdrawal Interest Rate, Cash Advance Fee (Same 

Bank), Card Renewal Fee, Card Printing and Shipping Fee, Overseas Transaction and Delay 

Interest; and Payment Card Transaction Flow Structure)

7. Credit Card Coverage

7.1. Market Size (Cards in Circulation, Transaction Value and Transaction Volume), 2014-2018

Number of Credit Cards in Circulation, 201-2018

Credit card Transaction Volume, 2014-2018

Credit Card Transaction value, 2014-2018

Credit Card Average Value of Transaction, 2014- 2018

Sector wise Credit Card Spending, 2018

Number of POS Machines in Turkey

Volume and Transaction Value per Month per Active Credit Card

7.2. Market Segmentation, 2014-2018

7.2.1. By Value of transaction, Volume of Transaction, Cash Withdrawals and Shopping Purchases, 
2014-2018

Domestic Transaction Value and Volume - Domestic Credit Card, 2014-2018

International value and volume of transaction- Domestic Credit Card

Domestic and International Transaction Value using a Domestic credit card

Market Segmentation of Cash Withdrawal and Shopping Purchases on Volume and Value

Market Segmentation of Cash Withdrawal and Shopping Purchases on Volume and Value - Domestic 
Transaction with Domestic Credit Card

Market Segmentation of Cash Withdrawal and Shopping Purchases on Volume and Value – 
International Transaction with Domestic Credit Card

Market Segmentation of Cash Withdrawal and Shopping Purchases on Volume and Value – Domestic 
Transaction with International Credit Card

7.2.2. Segment Breakdown of Credit Card

7.3. Competition Landscape

7.3.1. Revenue Streams in a Credit Card System (Revenue Sources for a Credit Card Issuer - 
Issuing Bank, Revenue Sources for an Acquiring Bank and Revenue Sources for a Payment Operator)

7.3.2. Revenue Stream and Requirements for American Express Credit Cards

7.3.3. Competition Scenario by Issuer (Competition Stage, Revenue Streams, Company Position, 
Competing Parameters, Revenue Earned by Banks from Credit Cards issued in Turkey and Business 
Model)

7.4. Market Share of Major Credit Card Operators by Number of Cards in Circulation, 2018 (including strengths and weaknesses)

7.5. Market Share of Major Credit Card Operators by Value of Transaction, 2018 (including 
customer acquisition strategies)

7.6. Future Outlook and Projections, 2018– 2023

8. Debit Card Coverage

8.1. Market Size (Number of Cards in Circulation, By Transaction Value and By Volume of 
Transaction, 2014-2018

Number of Debit Cards in Circulation

Debit Card Transaction Volume, 2014-2018

Debit Card Transaction Value, 2014-2018

Debit Card average value of transaction, 2014- 2018

Sector wise credit card spending, 2018

Number of ATM Terminals in Turkey

Transactions per Active Debit Card

Debit Card Transaction Ticket Size

8.2. Market Segmentation, 2014-2018

8.2.1. By Value of transaction, Volume of Transaction, Cash Withdrawals and Shopping Purchases, 
2014-2018

Domestic Transaction Value and Transaction Volume - Domestic Debit Card, 2014-2018

International Transaction Value and Transaction Volume- Domestic Debit Card

Domestic And International Value and Transaction Volume using A Local Debit Card

Market Share of Cash Withdrawal and Shopping Purchases on Volume and Value - Domestic 
Transaction with Domestic Debit card, 2014-2018

Market Share of Cash Withdrawal and Shopping Purchases on Volume and Value – International 
Transaction with Local Debit Card

8.3. Comparative Landscape

8.3.1. Competition Scenario by Issuer (Competition Stage, Company Position, Leading Debit Card 
Issuers and Leading Debit Card Operators)

8.3.2. Market Share of Major Debit Card Issuers by Number of Cards in Circulation, 2013-2018

Number of Debit Cards in circulation, 2013-2018

8.3.3. Market Share of Major Debit Card Issuer by Value of Transaction

Value of Transactions by Issuer, 2013-2018

8.3.4. Market Share by Number of Cards in Circulation by Operator

8.4. Future Outlook and Projections, 2019E- 2023E

9. Growth Drivers and Trends

9.1. Trends and Recent Developments

Introduction of Troy card as a Local Operator

Pivot towards Credit Cards for Shopping Purchases

Potential to become Cashless by 2023

Influx of Domestic Transactions Via foreign Cards

Eased Repayment Rules on Credit card Debt

Rapid Adaption of EMV Technology

Rapid Acceptance of Contactless Cards

9.2. Growth Drivers

E-commerce Spending Leading to a spur in Cards market

PAYBACK programs on Card spending

Potential of Unbanked Population

Share of Card Payments in Household Consumption

9.3. Issues and Challenges

Decline in Debit Card Sector Specific Transaction Share

Transformation to Cashless Economy

Surging Credit Card Interest Rate

Security Breach on Mass Usage of Contactless Cards

10. Company Profile of Major Card Players in Turkey

10.1. Turkeiye Garanti Bankasi A.S.

10.2. Yapi ve Kredi Bankasi AS

10.3. Turkiye IS Bankasi A.S.

10.4. AK Bank Turk A.S

10.5. Deniz Bank

11. Company Profile of Card Operators in Turkey

11.1. American Express Turkey

11.2. MasterCard Turkey

11.3. Visa Turkey

11.4. Troy, Turkey

12. Analyst Recommendation

12.1. Debit and Credit Card Recommendation Based on Case Study

Government Initiative

12.2Targeting Specific groups

12.3Reduce Interchange commission on debit card and Credit Card

12.4Integration of Troy cards

12.5Untapped Potential in Debit and Credit CARD- reward points

12.6Initiative of Women centric credit card/ Debit card

12.7Association with Diners Club International

12.8Adoption of Artificial Intelligence

12.9Introduction of virtual cards in mobile banking apps

12.10Technology Driven Initiatives:

12.11Strong Growth Prospects for Commercial Debit Cards

12.12Increase in Mobile and Online Shopping Having a Positive Impact

12.13Growth for Card Payments in High Potential Sectors

12.14Leading Players’ Reward Programmes Boost Dynamism of Debit Cards

12.15Strong Growth Potential of Commercial Credit Card

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