- As an EU member, Lithuania was compelled to adopt the Single Euro Payments Area (SEPA) framework, which is slated to revolutionize its cards and payments industry.
- The banks and other card issuers are expected to cut down consumer benefit and card offerings because of reduction in the interchange fee revenues.
- This may result in increased financial burden on the consumer, as the banks and other card issuers will be on the lookout for new ways of generating revenue such as increased used of debit cards.
Ken Research announced its latest publication on, “The Cards and Payments Industry in Lithuania: Emerging Trends and Opportunities to 2019”, which provides a detailed analysis of the market trends in the cards and payments industry of Lithuania. The publication studies the value and volume of key performance indicators such as check payments, credit transfers, cash transactions, payment cards and direct debits made during 2010-2014. It provides both review (2010-2014) and forecast (2015-2019) data for several sub-sectors of the industry. Additionally, the report profiles various issuers and schemes present in the industry, offering insight into the trends and activities that impact the competitive advantage of the industry participants.
The landscape of Lithuania’s cards and payments industry underwent a significant change during January 2016, with the adoption and implementation of the SEPA framework. In addition, other regulations such as capping of interchange fees for debit and credit cards at 0.2% and 0.3% respectively also came into effect. Together, all these changes are expected to have a significant impact on the profitability of payments card market, thereby compelling the banks and other card issuers to react accordingly.
Fixing of a low upper-limit value of the allowed interchange fees that banks and other card issuers can charge has made it imperative for them to look for new means of generating revenue. As a result, it is anticipated that they will cut costs by reducing consumer benefits and card offerings, which in turn will increase the financial burden on the consumer. To reduce this financial burden and achieve better consumer participation, Lietuvos Bank, the central bank of Lithuania, has adopted various measures such as responsible lending regulations (RLR) and campaigns for promoting the use of electronic payment methods by consumers.
The RLR requires the banks and other card issuers to accurately assess the borrower’s credit repayment capabilities before issuing the cards. This is projected to have a positive impact on the credit market health over the forecast period. In addition, banks are also striving to increase the number of customers using electronic payment methods such as debit cards, so that a higher volume of users can compensate for the loss of revenue due to reduced interchange views. As such, Lithuania’s cards and payments industry is witnessing a shift towards the use of e-commerce and other innovative payment instruments such as the Mokipay mobile wallet, Paysafecard and Medicinos Bankas mobile wallet.
Global Cards and Payments Industry
Staying strong in the face of economic slowdown, the global cards and payments industry is seeing growth in the volume of card transactions and other payments being made. This growth is driven by the advancement in digital technology and the emergence of nontraditional participants who offer compelling value propositions. Besides, there has been a shift in consumer preferences regarding the payment methods used in every day transactions. The major activities in the market are now targeted towards unbanked and underbanked consumers, who are migrating from traditional bank-based transactions to more digitized and user-friendly payment methods.
Some of the significant factors governing the global cards and payments industry during this period include:
- Demographic drivers
- Economic (micro and macro) drivers
- Infrastructure drivers
- Business drivers
- Regulatory measures (domestic and international) which impact both price realization and consumer experience
- Change in consumer preferences in terms of payment methods
Key Topics Covered in the Report:
- Detailed analysis of Lithuania’s cards and payments industry
- E-commerce market analysis
- Detailed insights into various payment instruments
- Comprehensive analysis of consumer attitudes and buying preferences
- Detailed analysis of competitive landscape of the Lithuanian cards and payments industry.
- Current and forecast values for each market in the industry, including credit and debit cards.
- Analysis of the regulatory framework and its impact
To know more on coverage, click on the link below:
Ankur Gupta, Head Marketing & Communications