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  5. > Luxembourg%s Cards and Payments Industry: Emerging Opportunities, Trends, Size, Drivers, Strategies, Products and Competitive Landscape

Synopsis
Like other EU countries, Luxembourg’s economy was damaged by the 2009 global economic crisis. Following strong economic growth from 2004 onwards, Luxembourg's economic growth contracted by 5.6% in 2009, but recovered gradually from 2010 onwards. Economic turmoil in the global financial markets and lower demand during the peak of the recession prompted the government to inject capital into the financial services sector and implement stimulus measures to boost the economy.

A favorable tax regime coupled with bank-privacy legislation enabled the financial services sector, especially the banking and insurance sectors, to become the growth leader. Consequently, Luxembourg’s cards and payments industry thrived during the review period (2009–2013), which is anticipated to continue over the forecast period (2014–2018).

In 2013, credit transfer was the preferred payment instrument, having a substantial industry share of 98.1%, in terms of transaction value, while payment cards accounted for just a 0.5% share. The use of cash is continuously decreasing due to a growing preference for electronic payment methods, resulting in cash’s share being halved during the review period, down from 1.5% in 2009 to 0.7% in 2013.

In terms of the number of cards in circulation, Luxembourg’s payment cards (including debit and credit cards) registered a positive growth during the review period, recording a significant compound annual growth rate (CAGR) of 23.14%, increasing from 992,348 cards in 2009 to 2.3 million in 2013. In terms of transaction value, payment cards valued EUR10.2 billion (US$13.5 billion) in 2013, after registering a review-period CAGR of 10.60%.
Improved banking infrastructure, new product developments, a higher awareness of electronic payments and wider acceptance of payment cards at point-of-sale (POS) terminals were the key factors driving growth. The adoption of Europay, MasterCard and Visa (EMV) standards also supported the industry’s growth.

In 2013, the average transaction value (ATV) in Luxembourg was US$121.0, which was the fifth highest in the European region. Greece recorded the highest ATV, with US$227.6, followed by Switzerland (US$156.6), Italy (US$141.2) and Germany (US$131.5). However, Luxembourg recorded the region’s highest card penetration of 4.43 cards per inhabitant in 2013, followed by Norway (2.73), the UK (2.48), Sweden (2.38) and Belgium (2.04).

Prior to the eurozone crisis, consumers used debit cards more frequently at POS terminals. However, with uncertain economic conditions and increases in unemployment from 2009 onwards, consumers moved to use credit cards more frequently to benefit from the interest-free credit period offered by the banks. In terms of the number of cards in circulation, transaction volume and value, debit cards decreased during the review period, which is anticipated to continue over the forecast period. In terms of the number of cards in circulation, debit cards accounted for 51.2% in 2009, which reduced to 27.1% in 2013. In terms of transaction volume, its share decreased from 65.9% to 57.2%, while in terms of transaction value its share decreased from 61.3% to 51.6%, during the same period.

Instead of solely depending upon their salaries, consumers moved to credit card payments in times of higher need, paying it back when they have funds. During the review period, the use of credit cards increased significantly both in volume and value terms at CAGRs of 19.05% and 17.00% respectively. Over the forecast period it is projected to grow at respective CAGRs of 5.11% and 4.48% in terms of volume and value.

Summary
The report provides top-level market analysis, information and insights into Luxembourg's cards and payments industry, including:

- Current and forecast values for each category of Luxembourg's cards and payments industry, including debit cards, credit cards and prepaid cards

- Comprehensive analysis of the industry’s market attractiveness and future growth areas

- Analysis of various market drivers and regulations governing Luxembourg's cards and payments industry

- Detailed analysis of marketing strategies adopted for selling debit, credit and prepaid cards used by banks and other institutions in the market

- Comprehensive analysis of consumer attitudes and buying preferences for cards

- The competitive landscape of Luxembourg's cards and payments industry

Scope
- This report provides a comprehensive analysis of Luxembourg’s cards and payments industry.

- It provides current values for Luxembourg’s cards and payments industry for 2013, and forecast figures for 2018.

- It details the different economic, infrastructural and business drivers affecting Luxembourg’s cards and payments industry.

- It outlines the current regulatory framework in the industry.

- It details marketing strategies used by various banks and other institutions.

- It profiles major banks in Luxembourg’s cards and payments industry.

Reasons To Buy
- Make strategic business decisions using top-level historic and forecast market data related to Luxembourg’s cards and payments industry and each market within it.

- Understand the key market trends and growth opportunities within Luxembourg’s cards and payments industry.

- Assess the competitive dynamics in Luxembourg’s cards and payments industry.

- Gain insights into marketing strategies used for selling various card types in Luxembourg.

- Gain insights into key regulations governing Luxembourg’s cards and payments industry.

Key Highlights
- In 2013, credit transfer was the preferred payment instrument, having a substantial industry share of 98.1%, in terms of transaction value, while payment cards accounted for just a 0.5% share. The use of cash is continuously decreasing due to a growing preference for electronic payment methods, resulting in cash’s share being halved during the review period, down from 1.5% in 2009 to 0.7% in 2013.

- In terms of the number of cards in circulation, Luxembourg’s payment cards (including debit and credit cards) registered a positive growth during the review period, recording a significant compound annual growth rate (CAGR) of 23.14%, increasing from 992,348 cards in 2009 to 2.3 million in 2013. In terms of transaction value, payment cards valued EUR10.2 billion (US$13.5 billion) in 2013, after registering a review-period CAGR of 10.60%.

- In 2013, the average transaction value (ATV) in Luxembourg was US$121.0, which was the fifth highest in the European region. Greece recorded the highest ATV, with US$227.6, followed by Switzerland (US$156.6), Italy (US$141.2) and Germany (US$131.5). However, Luxembourg recorded the region’s highest card penetration of 4.43 cards per inhabitant in 2013, followed by Norway (2.73), the UK (2.48), Sweden (2.38) and Belgium (2.04).

- Security developments in Luxembourg’s online payment systems enabled the steady growth of e-commerce, along with the use of social media for enhanced product presentation. E-commerce supported increasing card penetration during the review period. The increasing number of online shoppers and growth in online retailing, banks are offering web cards for individuals who frequently buy products or services online. For instance, BGL BNP Paribas, BIL, Banque Internationale à Luxembourg (BL) and ING Luxembourg offer web cards for online transactions. As e-commerce is anticipated to at a forecast-period CAGR of 19.82% to reach EUR1.3 billion (US$1.8 billion) by the end of 2018, the demand for web cards is expected to further increase over the forecast period, which will support payment cards growth over the forecast period.

Table Of Contents

Luxembourg%s Cards and Payments Industry: Emerging Opportunities, Trends, Size, Drivers, Strategies, Products and Competitive Landscape
Table of Contents
1 Key Facts and Top Events
2 Executive Summary
3 Payment Instruments
3.1 Current Payments Environment
3.2 Alternative Payment Instruments
3.2.1 Digicash
3.2.2 PayPal
3.2.3 Click2Pay
3.2.4 ClickandBuy
3.2.5 paysafecard
3.2.6 Skrill
4 Market Attractiveness and Future Prospects of Cards and Payments
5 Analysis of Cards and Payments Industry Drivers
5.1 Demographic Drivers
5.2 Economic Drivers
5.3 Infrastructure Drivers
5.4 Business Drivers
6 Emerging Consumer Attitudes and Trends
6.1 Market Segmentation and Targeting
6.1.1 Consumer cards
6.1.2 Corporate cards
6.2 Travel Spending
6.2.1 Outbound spending
6.2.2 Inbound spending
7 Payment Cards
7.1 Payment Cards Instrument Analysis
7.1.1 Number of cards in circulation by card type
7.1.2 Transaction volume by card type
7.1.3 Transaction value by card type
7.1.4 Personal vs commercial cards
8 Debit Cards
8.1 Debit Cards Market Analysis
8.1.1 Number of debit cards in circulation
8.1.2 Debit cards transaction volume by channel
8.1.3 Debit cards transaction value by channel
8.1.4 Number of debit cards in circulation by scheme
8.1.5 Debit cards transaction value by scheme
8.1.6 Debit cards issuers market shares
8.1.7 Debit cards comparison
9 Credit Cards
9.1 Credit Cards Market Analysis
9.1.1 Number of credit cards in circulation
9.1.2 Credit cards transaction volume by channel
9.1.3 Credit cards transaction value by channel
9.1.4 Number of credit cards in circulation by scheme
9.1.5 Credit cards transaction value by scheme
9.1.6 Credit cards issuers market share
9.1.7 Credit cards comparison
10 Commercial Cards
10.1 Commercial Cards Market Analysis
10.1.1 Number of commercial cards in circulation
10.1.2 Commercial cards transaction value
10.1.3 Commercial cards comparison
11 Regulations in the Cards and Payments Industry
11.1 Regulatory Framework
11.2 Anti-Money Laundering
11.3 Foreign Direct Investment Regulations
12 Card Fraud Statistics
12.1 Card Fraud Analysis
13 Card Issuers
13.1 BGL BNP Paribas
13.2 Banque et Caisse Depargne del' Etat Luxembourg
13.3 Banque Internationale a Luxembourg
13.4 Banque de Luxembourg
13.5 ING Luxembourg
14 Card Schemes
14.1 Visa
14.2 MasterCard
14.3 American Express
15 Prepaid Cards
15.1 Prepaid Cards Market Analysis
15.1.1 Number of prepaid cards in circulation
15.1.2 Prepaid cards transaction value
15.1.3 Open-loop prepaid cards
15.1.4 Closed-loop prepaid cards
15.1.5 Prepaid cards comparison
16 Appendix
16.1 Tables
16.2 Methodology
16.3 Contact Timetric
16.4 About Timetric
16.5 Timetric's Services
16.6 Definitions
16.7 Disclaimer

List of Tables
Table 1: Luxembourg - Key Facts, 2013
Table 2: Regional Benchmarking of Luxembourg's Payment Cards Instrument, 2013
Table 3: Cards for High-Income Consumers
Table 4: Cards for Frequent Travelers, 2014
Table 5: Cards for Students and Young Population, 2014
Table 6: Cards for Online Shoppers, 2014
Table 7: Luxembourg - Commercial Cards Comparison and Key Features, 2014
Table 8: Regional Benchmarking of Luxembourg's Debit Cards Market, 2013
Table 9: Luxembourg - Visa Domestic Interchange Reimbursement Fees, 2014
Table 10: Luxembourg - Debit Cards Comparison and Key Features
Table 11: Regional Benchmarking of Luxembourg's Credit Cards Market, 2013
Table 12: Luxembourg - Visa Domestic Interchange Reimbursement Fees, 2014
Table 13: Luxembourg - MasterCard Consumer Card and Commercial Card Interchange Fees, 2014
Table 14: Luxembourg - Gold Credit Cards Comparison and Key Features, 2014
Table 15: Luxembourg - Premium Credit Cards Comparison and Key Features, 2014
Table 16: Luxembourg - Commercial Cards Comparison and Key Features
Table 17: Luxembourg - Market Entry Strategies of Foreign Banks
Table 18: Regional Benchmarking of Luxembourg's Prepaid Cards Market, 2013
Table 19: Luxembourg - Prepaid Cards Comparison and Key Features
Table 20: Luxembourg - Payment Instruments Transaction Value (EUR Billion), 2009-2013
Table 21: Luxembourg - Payment Instruments Transaction Value (US$ Billion), 2009-2013
Table 22: Luxembourg - Payment Instruments Transaction Volume (Million), 2009-2013
Table 23: Luxembourg - Number of Cards in Circulation by Card Type (Thousand), 2009-2018
Table 24: Luxembourg - Transaction Volume by Card Type (Million), 2009-2018
Table 25: Luxembourg - Transaction Value by Card Type (EUR Billion), 2009-2018
Table 26: Luxembourg - Transaction Value by Card Type (US$ Billion), 2009-2018
Table 27: Luxembourg - Personal and Commercial Cards Transaction Value (EUR Billion), 2009-2018
Table 28: Luxembourg - Personal and Commercial Cards Transaction Value (US$ Billion), 2009-2018
Table 29: Luxembourg - Number of Debit Cards in Circulation (Thousand), 2009-2018
Table 30: Luxembourg - Debit Cards Transaction Volume and Frequency by Channel, 2009-2018
Table 31: Luxembourg - Debit Cards Total and Average Transaction Value by Channel, 2009-2018
Table 32: Luxembourg - Debit Cards Total and Average Transaction Value by Channel, 2009-2018
Table 33: Luxembourg - Number of Debit Cards in Circulation By Scheme (Thousand), 2009-2013
Table 34: Luxembourg - Debit Cards Transaction Value By Scheme (EUR Million), 2009-2013
Table 35: Luxembourg - Debit Cards Transaction Value By Scheme (US$ Million), 2009-2013
Table 36: Luxembourg - Debit Cards Transaction Value by Issuer (EUR Million), 2009-2013
Table 37: Luxembourg - Debit Cards Transaction Value by Issuer (US$ Million), 2009-2013
Table 38: Luxembourg - Number of Credit Cards in Circulation (Thousand), 2009-2018
Table 39: Luxembourg - Credit Cards Transaction Volume and Frequency by Channel, 2009-2018
Table 40: Luxembourg - Credit Cards Total and Average Transaction Value by Channel, 2009-2018
Table 41: Luxembourg - Credit Cards Total and Average Transaction Value by Channel, 2009-2018
Table 42: Luxembourg - Number of Credit Cards in Circulation By Scheme (Thousand), 2009-2013
Table 43: Luxembourg - Credit Cards Transaction Value By Scheme (EUR Million), 2009-2013
Table 44: Luxembourg - Credit Cards Transaction Value By Scheme (US$ Million), 2009-2013
Table 45: Luxembourg - Credit Cards Transaction Value By Issuer (EUR Million), 2009-2013
Table 46: Luxembourg - Credit Cards Transaction Value By Issuer (US$ Million), 2009-2013
Table 47: Luxembourg - Number of Commercial Cards in Circulation (Thousand), 2009-2018
Table 48: Luxembourg - Commercial Cards Transaction Value (EUR Million), 2009-2018
Table 49: Luxembourg - Commercial Cards Transaction Value (US$ Million), 2009-2018
Table 50: Luxembourg - Card Fraud (EUR Thousand), 2009-2013
Table 51: Luxembourg - Card Fraud (US$ Thousand), 2009-2013
Table 52: Luxembourg - Number of Prepaid Cards in Circulation (Thousand), 2009-2018
Table 53: Luxembourg - Prepaid Cards Transaction Value (EUR Million), 2009-2018
Table 54: Luxembourg - Prepaid Cards Transaction Value (US$ Million), 2009-2018
Table 55: Luxembourg - Closed-Loop Prepaid Cards, 2009-2018
Table 56: Key Definitions

List of Figures
Figure 1: Luxembourg - Payment Instruments Shares by Transaction Value (%), 2009 and 2013
Figure 2: Luxembourg - Payment Instruments Shares by Transaction Volume (%), 2009 and 2013
Figure 3: Luxembourg - Payment Cards Transaction Value and Growth, 2009-2018
Figure 4: Luxembourg - Total Population and Proportion Aged Over 65 Years (%), 2009-2018
Figure 5: Luxembourg - Nominal GDP Per Capita (US$) and Real GDP Growth Rate (%), 2009-2018
Figure 6: Luxembourg - Volume of ATMs and Penetration, 2009-2018
Figure 7: Luxembourg - Volume of POS Terminals and Penetration, 2009-2018
Figure 8: Luxembourg - E-Commerce Value (EUR Million), 2009-2018
Figure 9: Luxembourg - Cards and Payments Industry Segmentation by Card Type
Figure 10: Luxembourg - Outbound Spending (EUR Million), 2009-2013
Figure 11: Luxembourg - Inbound Spending (EUR Million), 2009-2013
Figure 12: Luxembourg - Card Shares In Terms of Numbers in Circulation (%), 2009-2018
Figure 13: Luxembourg - Card Shares in Terms of Transaction Volume (%), 2009-2018
Figure 14: Luxembourg - Card Shares in Terms of Transaction Value (%), 2009-2018
Figure 15: Luxembourg - Personal and Commercial Cards, Transaction Value (EUR Billion), 2009-2018
Figure 16: Luxembourg - Number of Debit Cards in Circulation (Thousand), 2009-2018
Figure 17: Luxembourg - Debit Cards Transaction Volume by Channel (Million), 2009-2018
Figure 18: Luxembourg - Debit Cards Transaction Value by Channel (EUR Billion), 2009-2018
Figure 19: Luxembourg - Debit Cards Issuers' Market Shares in Terms of Transaction Value (%), 2013
Figure 20: Luxembourg - Number of Credit Cards in Circulation (Thousand), 2009-2018
Figure 21: Luxembourg - Credit Cards Transaction Volume by Channel (Million), 2009-2018
Figure 22: Luxembourg - Credit Cards Transaction Value by Channel (EUR Billion), 2009-2018
Figure 23: Luxembourg - Credit Cards Scheme Market Share in Terms of the Number of Cards in Circulation (%), 2013
Figure 24: Luxembourg - Credit Cards Scheme Market Share in Terms of Transaction Value (%), 2013
Figure 25: Luxembourg - Credit Cards Issuers' Market Share in Terms of Transaction Value (%), 2013
Figure 26: Luxembourg - Number of Commercial Cards in Circulation (Thousand), 2009-2018
Figure 27: Luxembourg - Commercial Cards Transaction Value (EUR Million), 2009-2018
Figure 28: Luxembourg - Shares of Various Types of Card Fraud in Terms of Transaction Value (%), 2009 and 2013
Figure 29: Luxembourg - Number of Prepaid Cards in Circulation (Thousand), 2009-2018
Figure 30: Luxembourg - Prepaid Cards Transaction Value (EUR Million), 2009-2018

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