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 www.timetric.com 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 Emerging Opportunities in Kuwait’s Cards and Payments Industry Page 2 © Timetric. This product is licensed and is not to be photocopied Published: March 2013 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 .............................................................................................