Emerging Opportunities in Kuwait's Cards and Payments Industry

Emerging Opportunities in Kuwait’s Cards and Payments Industry Market Size, Trends and Drivers, Strategies, Products and Competitive Landscape

Product Code: VR0900MR Published Date: March 2013

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TABLE OF CONTENTS

TABLE OF CONTENTS 1 Executive Summary ...... 7 2 Market Attractiveness and Future Prospects for the Cards and Payments Industry...... 9 3 Analysis of Kuwaiti Cards and Payments Market Drivers ...... 11 3.1 Infrastructure Drivers ...... 12 3.1.1 Migration to EMV cards ...... 12 3.1.2 Emergence of Contactless and NFC technology enabled payments ...... 12 3.1.3 M-Net mobile payments solution ...... 12 3.1.4 Increasing number of internet users ...... 13 3.1.5 Growing Number of POS terminals ...... 14 3.1.6 Growing Number of ATMs ...... 15 3.2 Business Drivers ...... 16 3.2.1 Retail Industry ...... 16 3.2.2 Growing E-commerce ...... 17 3.2.3 Outbound business and leisure travel and tourism ...... 18 3.3 Other Drivers ...... 19 3.3.1 GDP growth ...... 19 3.3.2 Stable inflation rate ...... 20 3.3.3 Consumer confidence index ...... 21 3.3.4 Consumer spending habits ...... 21 3.4 Card Fraud Statistics ...... 22 3.5 Regulatory Framework ...... 23 3.5.1 Anti-Money Laundering (AML) ...... 23 3.5.2 Guidelines regarding credit cards issued by local and Islamic banks ...... 24 4 Emerging Consumer Attitudes and Trends ...... 25 4.1 Market Segmentation and Targeting ...... 25 4.2 Retail Segment ...... 26 4.2.1 Targeting high net worth individuals (HNWIs) ...... 26 4.2.2 Cards targeted at outbound leisure tourists ...... 27 4.2.3 Cards targeted at niche segments ...... 27 4.3 Corporate Segment ...... 28 4.3.1 Businesses and departments ...... 28 4.4 Consumer Preference ...... 29 4.4.1 Price ...... 29 4.4.2 Services ...... 29 4.4.3 Convenience ...... 30 4.5 Online Buying Behavior ...... 31 5 Competitive Landscape and Industry Dynamics ...... 32 5.1 Market Share Analysis by Payment Channels ...... 32 5.1.1 Overview of payment channels ...... 32 5.1.2 Credit transfer ...... 33 5.1.3 Card payments ...... 34 5.1.4 Check payments ...... 35

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TABLE OF CONTENTS

5.2 Debit Cards ...... 36 5.2.1 By bank ...... 36 5.2.2 By scheme ...... 37 5.3 Credit Cards ...... 38 5.3.1 By bank ...... 38 5.3.2 By scheme ...... 39 5.4 Charge Cards ...... 40 6 Strategies Adopted by Key Operators ...... 41 6.1 Market entry strategies ...... 41 6.2 Marketing / Product Strategy ...... 42 6.2.1 Credit cards ...... 43 6.2.2 Prepaid cards ...... 46 6.3 Pricing Strategies ...... 48 7 Market Size and Growth Potential of the Payment Cards Industry ...... 49 7.1 Market Share Analysis by Type of Card ...... 49 7.2 Total Market Size and Forecast of the Card Industry ...... 51 7.2.1 Analysis by number of cards ...... 51 7.2.2 Analysis by transaction value ...... 52 7.2.3 Analysis by transaction volume ...... 53 7.3 Debit Cards Market Size and Forecast ...... 54 7.3.1 Analysis by number of cards ...... 54 7.3.2 Analysis by transaction value ...... 55 7.3.3 Analysis by transaction volume ...... 56 7.3.4 Other key performance indicators ...... 57 7.4 Prepaid Cards Market Size and Forecast ...... 59 7.4.1 Analysis by number of cards ...... 59 7.4.2 Analysis by segments – open and closed-loop cards ...... 60 7.4.3 Analysis by transaction value ...... 62 7.5 Charge Cards Market Size and Forecast ...... 63 7.5.1 Analysis by number of cards ...... 63 7.5.2 Analysis by transaction value ...... 64 7.5.3 Analysis by transaction volume ...... 65 7.5.4 Frequency of use ...... 66 7.6 Credit Card Category Size and Forecast ...... 67 7.6.1 Analysis by number of cards ...... 67 7.6.2 Analysis by transaction value ...... 68 7.6.3 Analysis by transaction volume ...... 69 7.6.4 Other key performance indicators ...... 70 8 Company Profiles, Product, and Marketing Strategies ...... 72 8.1 National Bank of Kuwait ...... 72 8.1.1 Strategies ...... 72 8.2 Kuwait Finance House ...... 74 8.2.1 Strategies ...... 74

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TABLE OF CONTENTS

8.2.2 Kuwait Finance House key financial indicators ...... 75 8.3 Commercial Bank of Kuwait ...... 76 8.3.1 Strategies ...... 76 8.3.2 Commercial Bank of Kuwait key financial indicators ...... 77 9 Appendix ...... 78 9.1 Methodology ...... 78 9.2 Contact Us ...... 78 9.3 About Timetric ...... 78 9.4 Disclaimer ...... 79

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TABLE OF CONTENTS

LIST OF FIGURES

Figure 1: Current and Future Prospects of Various Cards in Kuwait ...... 9 Figure 2: Growth Potential of Kuwait Cards and Payments Industry by Area of Use ...... 10 Figure 3: Kuwait’s Cards and Payments Industry Drivers ...... 11 Figure 4: Number of Internet Users in Kuwait (Million), 2008-2012 ...... 13 Figure 5: Number of POS Terminals in Kuwait (Thousand), 2008-2017 ...... 14 Figure 6: Number of ATMs in Kuwait (Thousand), 2008-2017 ...... 15 Figure 7: Retail Sales (KWD Billion), 2008–2012 ...... 16 Figure 8: Gulf Corporation Council (GCC) Countries’ Business to Customer (B2C) E-Sales (US$ Million), 2011 ...... 17 Figure 9: Expenditure on Outbound Travel and Tourism in Kuwait (KWD Billion), 2008–2012 ...... 18 Figure 10: GDP Growth Rate (%), 2008–2017 ...... 19 Figure 11: Kuwait Inflation (Annual Change of CPI) (%), 2008–2017 ...... 20 Figure 12: Consumer Confidence Index of GCC Countries, 2012 ...... 21 Figure 13: Kuwait Card Fraud Value (KWD Million), 2008–2012 ...... 22 Figure 14: Central Bank of Kuwait’s AML Guidelines ...... 23 Figure 15: Credit Card Guidelines ...... 24 Figure 16: Kuwaiti Cards and Payments Industry Segmentation by Card Type ...... 25 Figure 17: Cards for Premium Customers in Kuwait ...... 26 Figure 18: Cards Offered for travel and tourism in Kuwait ...... 27 Figure 19: Consumer Preferences by Card Type ...... 29 Figure 20: Share of Non-Cash Payment Channels in Kuwait (%), 2012 ...... 32 Figure 21: Kuwait Credit Transfer Transaction Volume ( Million), 2008–2012 ...... 33 Figure 22: Value and Growth of Cards Payments in Kuwait (KWD Million), 2008–2012 ...... 34 Figure 23: Kuwait Value and Growth of Check Payment (KWD Million), 2008–2012 ...... 35 Figure 24: Kuwait Debit Cards Market Share by Issuing Banks (%), 2011 ...... 36 Figure 25: Kuwait Debit Cards Market Share by Scheme (%), 2011 ...... 37 Figure 26: Kuwait Credit Cards Market Share by Bank (%), 2011 ...... 38 Figure 27: Kuwait Credit Cards Market Share by Scheme (%), 2011 ...... 39 Figure 28: Kuwait Charge Cards Market Share by Scheme (%), 2011 ...... 40 Figure 29: Regulations for opening a foreign bank branch in Kuwait ...... 41 Figure 30: Kuwait Marketing Strategies Based on Card Type ...... 42 Figure 31: Rewards and discounts offered by Kuwait Finance House ...... 43 Figure 32: Travel Insurance Offered by the National Bank of Kuwait ...... 44 Figure 33: Co-Branded Cards Offered in Kuwait ...... 45 Figure 34: Travel Cards Offered in Kuwait ...... 46 Figure 35: Gift Cards Offered in Kuwait ...... 47 Figure 36: Credit Card Pricing Strategy of Various Service Providers ...... 48 Figure 37: Kuwait Cards Industry by Type of Card (%), 2008–2017 ...... 50 Figure 38: Kuwait Cards Industry Size by Number of Cards (Thousands), 2008–2017 ...... 51 Figure 39: Kuwait Cards Industry Size by Transaction Value (KWD Million), 2008–2017 ...... 52 Figure 40: Kuwait Cards Industry Size by Transaction Volume (Million), 2008–2017 ...... 53 Figure 41: Kuwait Debit Card Category Size (Thousands), 2008–2017 ...... 54 Figure 42: Kuwait Debit Card Category Size (KWD Million), 2008–2017 ...... 55 Figure 43: Kuwait Debit Card Category Size by Transaction Volume (Million), 2008–2017 ...... 56 Figure 44: Kuwait Debit Card Category Size by Frequency of Use (Transaction/Card/Year), 2008–2017 ...... 57 Figure 45: Debit Card Usage ATMs and POS Terminals (Thousands), 2008–2017 ...... 58 Figure 46: Kuwait Prepaid Card Category Size by Volume of Cards (Thousands), 2008–2017 ...... 59 Figure 47: Kuwait Open-Loop Prepaid Cards Segment Size by Volume of Cards (Thousands), 2008–2017 ...... 60 Figure 48: Kuwait Closed-Loop Prepaid Cards Segment Size by Volume of Cards (Thousands), 2008–2017 ...... 61 Figure 49: Kuwait Prepaid Cards Category Size by Transaction Value (KWD Million), 2008–2017 ...... 62 Figure 50: Kuwait Charge Card Category Size by Volume of Cards (Thousands), 2008–2017 ...... 63 Figure 51: Kuwait Charge Card Category Size by Transaction Value (KWD Million), 2008–2017 ...... 64 Figure 52: Kuwait Charge Card Category Size by Transaction Volume (Million), 2008–2017 ...... 65 Figure 53: Kuwait Charge Card Category Size by Frequency of Use (Transaction/Card/Year),...... 66 Figure 54: Kuwait Credit Card Category Size by Number of Cards (Thousands), 2008–2017 ...... 67 Figure 55: Kuwait Credit Card Category Size by Transaction Value (KWD Million), 2008–2017 ...... 68 Figure 56: Kuwait Credit Card Category Size by Transaction Volume (Million), 2008–2017 ...... 69 Figure 57: Kuwait Credit Card Category Size by Frequency of Use, 2008–2017 ...... 70 Figure 58: Kuwait Credit Card Category Size by Average Transaction Value (KWD), 2008–2017 ...... 71 Figure 59: Cards Offered by the National Bank of Kuwait ...... 72 Figure 60: Cards Offered by Kuwait Finance House ...... 74 Figure 61: Cards Offered by Commercial Bank of Kuwait ...... 76

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TABLE OF CONTENTS

LIST OF TABLES

Table 1: Kuwait Non-Cash Payment Channels (KWD Million), 2008–2012 ...... 32 Table 2: Kuwait Cards Industry by Type of Card (Thousands), 2008–2017 ...... 49 Table 3: Kuwait Cards Industry Size by Number of Cards (Thousands), 2008–2017 ...... 51 Table 4: Kuwait Cards Industry Size by Transaction Value (KWD Million), 2008–2017 ...... 52 Table 5: Kuwait Cards Industry Size by Transaction Value (US$ Million), 2008–2017...... 52 Table 6: Kuwait Cards Industry Size by Transaction Volume (Million), 2008–2017 ...... 53 Table 7: Kuwait Debit Card Category Size (Thousands), 2008–2017 ...... 54 Table 8: Kuwait Debit Card Category Size (KWD Million), 2008–2017 ...... 55 Table 9: Kuwait Debit Card Category Size (US$ Million), 2008–2017 ...... 55 Table 10: Kuwait Debit Card Category Size by Transaction Volume (Million), 2008–2017 ...... 56 Table 11: Kuwait Debit Card Category Size by Frequency of Use (Transaction/Card/Year), 2008–2017 ...... 57 Table 12: Kuwait Prepaid Card Category Size by Volume of Cards (Thousands), 2008–2017 ...... 59 Table 13: Kuwait Open-Loop Prepaid Cards Segment Size by Volume of Cards (Thousands), 2008–2017 ...... 60 Table 14: Kuwait Closed-Loop Prepaid Cards Segment Size by Volume of Cards (Thousands), 2008–2017 ...... 61 Table 15: Kuwait Prepaid Cards Category Size by Transaction Value (KWD Million), 2008–2017 ...... 62 Table 16: Kuwait Prepaid Cards Category Size by Transaction Value (US$ Million), 2008–2017 ...... 62 Table 17: Kuwait Charge Card Category Size by Volume of Cards (Thousands), 2008–2017 ...... 63 Table 18: Kuwait Charge Card Category Size by Transaction Value (KWD Million), 2008–2017 ...... 64 Table 19: Kuwait Charge Card Category Size by Transaction Value (US$ Million), 2008–2017 ...... 64 Table 20: Kuwait Charge Card Category Size by Transaction Volume (Million), 2008–2017 ...... 65 Table 21: Kuwait Charge Card Category Size by Frequency of Use (Transaction/Card/Year), 2008–2017 ...... 66 Table 22: Kuwait Credit Card Category Size by Number of Cards (Thousands), 2008–2017 ...... 67 Table 23: Kuwait Credit Card Category Size by Transaction Value (KWD Million), 2008–2017 ...... 68 Table 24: Kuwait Credit Card Category Size by Transaction Value (US$ Million), 2008–2017 ...... 68 Table 25: Kuwait Credit Card Category Size by Transaction Volume (Million), 2008–2017 ...... 69 Table 26: Kuwait Credit Card Category Size by Frequency of Use, 2008–2017 ...... 70 Table 27: Kuwait Credit Card Category Size by Average Transaction Value (KWD), 2008–2017 ...... 71 Table 28: Kuwait Credit Card Category Size by Average Transaction Value (US$), 2008–2017 ...... 71 Table 29: Kuwait Finance House Key Financial Indicators, 2010–2011 ...... 75 Table 30: Commercial Bank of Kuwait Key Financial Indicators, 2010–2011 ...... 77

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EXECUTIVE SUMMARY

1 Executive Summary

Kuwait’s cards industry as a whole grew moderately at a CAGR of X.XX% during the review period, primarily driven by the prepaid card category. Slow growth was mainly a result of the global economic crises, which caused a decline in demand for oil and non-oil based exports and resulted in decreased rates of lending. During the review period (2008–2012), prepaid cards occupied the largest share in the overall cards and payments industry, and in volume terms recorded a CAGR of XX.XX%. Charge cards grew at a CAGR of X.XX% over the same period, followed by debit cards with a CAGR of X.XX%. The overall card industry is expected to grow at a CAGR of X.XX% over the forecast period (2013–2017), driven primarily by the prepaid cards category, which is expected to grow at a CAGR of XX.XX%. The credit cards category is also expected to grow at a CAGR of X.X% during the forecast period, while debit cards are expected to record a CAGR of X.XX%, and charge cards a CAGR of X.XX%. The Kuwaiti cards and payments industry presents positive growth potential The Kuwaiti cards and payments industry grew moderately in terms of volume and substantially terms of value during the review period. The number of transactions grew significantly from XX.X million transactions in 2008 to XXX.X million in 2012, at a CAGR of XX.XX%. Debit card transactions remained the key growth driver, followed by charge cards. Over the forecast period the total cards transaction volume is expected to grow at a CAGR of X.XX% to reach X.X million transactions by the end of 2017. In value terms, the Kuwaiti cards and payments industry grew at a CAGR of XX.XX% during the review period, from KWDX.X billion (US$XX.X billion) in 2008 to KWDXX.X billion (US$XX.X billion) in 2012. It is expected to grow at a CAGR of XX.XX% over the forecast period, from KWDXX.X billion (US$XX.X billion) in 2013 to KWDXX.X billion (US$XX.X billion) in 2017. As the industry becomes more sophisticated, banks will need to differentiate their product offerings, and card customization is gaining more attention. Other services include internet banking or serving niche segments such as women, philanthropic activities or high-end, affluent customers. Marketing strategies in the prepaid card category to drive growth Prepaid cards held the largest market share in the overall cards and payments industry during the review period. In volume terms, the category increased at a significant CAGR of XX.XX% from 2008 to 2012, mainly due to strong growth in the closed-loop cards category which grew at a CAGR of XX.XX%. Banks are offering several innovative strategies in this category including reloading options, gift cards, travel cards and product bundles. For example, the National Bank of Kuwait offers a travel card, which is a reloadable card with global acceptance. The card offers free travel insurance of up to KWDXX,XXX on the purchase of air tickets and redeemable points under the NBK Rewards Program at over XXX merchants worldwide. Significant improvement in infrastructure has driven the overall payments industry in Kuwait Near Field Communication (NFC) technology is increasingly being adopted by payment network providers, service providers, merchants and mobile network operators in Kuwait. Visa, for example, partnered with the National Bank of Kuwait and Zain, a network service provider, to launch a trial of NFC technology in October 2009. This was the first instance of NFC technology being provided in Kuwait, and offered a convenient and low value payments solution to its customers. The technology is largely accepted by retailers at Kuwait’s largest mall as well as other retail outlets, and offers cardholders the convenience and security of paying for their purchases using Visa PayWave terminals. Growth of e-commerce to drive cards and payments industry growth The growing market for online trade in Kuwait is one of the primary factors responsible for the expansion of the country’s cards and payments industry. E-commerce sales were worth KWDXX.X million (US$XXX.X million) in 2011. Growth in this area can be attributed to the benefits offered by online retail such as low costs, convenience, and promotional offers and discounts, and is expected to further increase credit, debit and prepaid card ownership.

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EXECUTIVE SUMMARY

Outbound tourism has driven the industry to develop globally accepted debit, credit and prepaid cards According to the World Travel and Tourism Council 2012, total expenditure on outbound travel in Kuwait increased from KWDX.X billion (US$X.XX billion) in 2008 to KWDX.X billion (US$X.XX billion) in 2012, after registering a review period CAGR of X.XX%. The growing number of domestic and international tourists has created a demand for travel cards in the country, and many leading banks and card providers have issued travel cards targeting these consumers. For example, Al-Ahli Bank of Kuwait, the National Bank of Kuwait and Burgan bank offer cards on which customers are offered discounts and travel insurance while travelling by specific airlines. Banks targeting niche segments through product innovation The National Bank of Kuwait has developed new product strategies targeting niche segments like women and premium customers. In partnership with Zain, one of the leading telecom companies in Kuwait, the bank offers co-branded cards for mobile users, which give customers a free SMS for every Kuwaiti Dinar spent using the card. On applying for the Zain Visa Card, the cardholder also gets 100 free introductory bonus local text messages and two free local SMS for every KWDX spent. In the same vein, the bank has also partnered with Diners Club to offer co-branded cards for travellers in Kuwait, which give cardholders global lifestyle privileges and complimentary travel insurance. These innovative marketing strategies have enabled the bank to capture an untapped market, leading to further development of the cards and payments industry.

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MARKET ATTRACTIVENESS AND FUTURE PROSPECTS OF CARDS AND PAYMENTS INDUSTRY

2 Market Attractiveness and Future Prospects for the Cards and Payments Industry

The Kuwaiti cards and payments industry is expected to register a CAGR of 4.44% over the forecast period to reach 4.7 million cards by the end of 2017. Prepaid cards gained significant momentum during the review period and recorded a significant adoption rate. Card volume in this category grew from 65,600 cards in 2008 to 236,900 in 2012, at a CAGR of 37.83%. Over the forecast period, the category is expected to grow at a CAGR of 19.94% to reach 611,200 cards in 2017. In light of these figures, the Kuwaiti card industry offers huge growth opportunities for banks and non-banking card issuers, especially in the prepaid cards category.

Figure 1: Current and Future Prospects of Various Cards in Kuwait

Source: Timetric analysis © Timetric

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ANALYSIS OF CARDS AND PAYMENTS MARKET DRIVERS

3 Analysis of Kuwaiti Cards and Payments Market Drivers

The Kuwaiti prepaid cards industry recorded impressive growth during the review period. Notably, this growth not only resulted in an increase in the volume of cards issued, but also improvements in their overall process and functions. Consequently, cards issued by Kuwaiti banks are now accepted worldwide.

The Kuwaiti payment cards industry is becoming more competitive every year, with banks and card issuing companies now being forced to offer more attractive products in order to retain their market positions. Significantly, the emergence of highly secure payment gateways has increased public confidence in payment cards, and has had a positive impact on the overall market’s development. Moreover, the rapid expansion of the Kuwaiti online retail and online travel markets has also supported industry growth.

Figure 2: Kuwait’s Cards and Payments Industry Drivers

Source: Timetric analysis © Timetric

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ANALYSIS OF CARDS AND PAYMENTS MARKET DRIVERS

3.1 Infrastructure Drivers 3.1.1 Migration to EMV cards EMV (Europay, MasterCard and Visa) is a standard for credit and debit payment cards based on chip card technology. In order to be EMV compliant, banks in Kuwait migrated to EMV technology in 2009. Ahead of the migration, the Central Bank of Kuwait partnered with the Institute of Banking studies to conduct an EMV MChip course in 2010 for executives of various banking sectors. This was in order to facilitate the adoption of EMV cards and create awareness regarding the technical details of the EMV transaction flow between cards and terminals. The purpose was also to develop the banking industry’s business by improving its customer base, which further developed the cards and payments industry in the country. Kuwait Finance House-Bahrain, in collaboration with Arab Financial Services (an electronic card support service provider) launched an EMV compliant Islamic Credit Card in 2007, which functions in accordance with Islamic banking principles. 3.1.2 Emergence of Contactless and NFC technology enabled payments NFC technology is increasingly being adopted amongst payment network providers, service providers, retailers and mobile network operators in Kuwait. In October 2009, Visa partnered with the National Bank of Kuwait and Zain, a network service provider, to launch the first trial of NFC technology in the country. The technology offered low value payments solutions to its customers, and the service was largely accepted by merchants at the Kuwait’s largest mall and other retail outlets. NFC technology offers cardholders the convenience and security of paying for their purchases using Visa PayWave terminals. 3.1.3 M-Net mobile payments solution In collaboration with the National Bank of Kuwait and telecom giant MTC-Vodafone, M-Net, a mobile payment technology provider, launched a mobile payment services trial across Kuwait in 2005. The trial involved 120 users and 48 Point of Sale (POS) terminals including retailers, service providers, and home delivery services. During the trial, 1,000 payment transactions were completed, valuing 5,000KWD.

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ANALYSIS OF CARDS AND PAYMENTS MARKET DRIVERS

3.2 Business Drivers 3.2.1 Retail Industry The value of retail sales in Kuwait increased from KWDXX.X billion (US$XX.X billion) in 2008 to KWDXX.X billion (US$XX.X billion) in 2012. The key factors behind this growth were a high level of disposable income, a high level of urbanization, a sophisticated consumer base and a favorable long-term economic outlook for the country. According to Business Monitor International quarterly retail reports in 2012, XX% of the Kuwaiti population consists of expatriates along with foreign nationals, which has stimulated the retail industry and offers future growth potential. Moreover, in 2010 the UN estimated XX.X% of the total population to be economically active and XX.X% of the population to be aged between 20-44 years which provides highest growth potential for the cards and payments industry.

Figure 3: Retail Sales (KWD Billion), 2008–2012

Source: Timetric analysis © Timetric

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COMPETITIVE LANDSCAPE AND INDUSTRY DYNAMICS

4 Competitive Landscape and Industry Dynamics

Credit transfers accounted for XX.X% of Kuwait’s non-cash retail transactions in 2012, according to the central bank. The value of card based transactions increased from KWDX.X billion (US$XX.X billion) in 2008 to KWDXX.X billion (US$XX.X billion) in 2012, accounting for XX.X% of the total market share of non-cash payments. 4.1 Market Share Analysis by Payment Channels This section explores the market shares of various payment channels and details how these channels have grown during the review period. The most popular payment channels were checks, card payments and credit transfers. 4.1.1 Overview of payment channels During the review period, credit transfers remained the dominant non-cash payment channel in Kuwait, accounting for XX.X% of all non-cash based transactions in 2012. Card payments registered a CAGR of XX.XX% during the review period, and their share increased from X.X% in 2008 to X.X% in 2012.

Table 1: Kuwait Non-Cash Payment Channels (KWD Million), 2008–2012

Payment Channels KWD Million, 2008 Market Share (%) 2008 KWD Million, 2012 Market Share (%) 2012

Credit Transfer XXX,XXX.X XX.X% XXX,XXX.X XX.X%

Cards Payments X,XXX.X X.X% XX,XXX.X X.X% Check Payments XX,XXX.X X.X% XX,XXX.X X.X% Total XXX,XXX.X XXX.X% XXX,XXX.X XXX.X% Source: Timetric analysis © Timetric

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MARKET SIZE AND GROWTH POTENTIAL OF PAYMENT CARD INDUSTRY

5 Market Size and Growth Potential of the Payment Cards Industry

The following section provides an overview of the size and growth potential of the Kuwaiti cards and payments industry. The section is divided into six chapters. Chapter one is an industry share analysis by type of card, chapter two discusses the share and future growth of the overall card industry by value and volume, chapter three discusses the size of the country’s debit card category, chapter four discusses the category size of prepaid cards in Kuwait, and chapters five and six cover the size and growth potential of the charge card and credit card categories respectively. 5.1 Market Share Analysis by Type of Card The card industry in volume terms as a whole grew moderately at a CAGR of X.XX% during the review period, primarily driven by the prepaid card category which recorded a CAGR of XX.XX%. Debit cards grew at a CAGR of X.XX% over the review period, whereas the charge cards category grew at a CAGR of X.XX% and the credit cards category recorded a CAGR of X.XX%. The overall card industry is expected to grow at a CAGR of X.XX% over the forecast period, driven primarily by the prepaid cards category, which is expected to register a CAGR of XX.XX%. The credit cards category is expected to grow at a CAGR of X.XX% from 2013 to 2017, whereas debit cards are expected to grow at a CAGR of X.XX% and charge cards are expected to grow at a CAGR of X.XX% over the forecast period.

Table 2: Kuwait Cards Industry by Type of Card (Thousands), 2008–2017

Types of Card: 2008 2012 2013 2017 CAGR 2008–2012 CAGR 2013–2017

Debit Card X,XXX.X X,XXX.X X,XXX.X X,XXX.X X.XX% X.XX%

Credit Card XXX.X XXX.X XXX.X XXX.X X.XX% X.XX%

Prepaid Card XX.X XXX.X XXX.X XXX.X XX.XX% XX.XX%

Charge Card X.X X.X X.X X.X X.XX% X.XX% Total X,XXX.X X,XXX.X X,XXX.X X,XXX.X X.XX% X.XX% Source: Timetric analysis © Timetric

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MARKET SIZE AND GROWTH POTENTIAL OF PAYMENT CARD INDUSTRY

5.2 Total Market Size and Forecast of the Card Industry The card industry in Kuwait grew moderately in volume terms and substantially in value terms during the review period. Over the forecast period it is expected to increase at a CAGR of X.XX% in terms of volume and XX.XX% in terms of value. 5.2.1 Analysis by number of cards In terms of card volume in circulation, the industry grew moderately at a CAGR of X.XX% during the review period, and is forecast to post a CAGR of X.XX% over the forecast period. Growth in the number of prepaid cards issued is expected to drive the growth of the overall cards and payments industry in Kuwait.

Table 3: Kuwait Cards Industry Size by Number of Cards (Thousands), 2008–2017

2008 2009 2010 2011 2012 CAGR 2008–2012

Total Cards – Review X,XXX.X X,XXX.X X,XXX.X X,XXX.X X,XXX.X X.XX% 2013 2014 2015 2016 2017 CAGR 2013–2017 Total Cards – Forecast X,XXX.X X,XXX.X X,XXX.X X,XXX.X X,XXX.X X.XX% Source: Timetric analysis © Timetric

Figure 4: Kuwait Cards Industry Size by Number of Cards (Thousands), 2008–2017

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APPENDIX

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APPENDIX

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