1. UK Plastic Cards: Market Sizing and Forecasting
Report Details:
Published:September 2012
No. of Pages: 42
Price: Single User License – US$4495
Despite the UK economy re-entering recession, the payment card market has continued to
perform relatively well. This has been primarily driven by consumer preference for debit card
payments. With the huge write-offs of 2009 and 2010 behind it, the credit card market in H1 2012
is also registering its first overall growth figures since before the economic crisis began.
Features and benefits
•Includes detailed analysis of macro-economic indicators and how these factors will affect the card
market in 2013.
•Providing the latest data, the report focuses on key metrics such as card transaction values,
balances, and card numbers.
•By using the latest available market data the report offers in-depth analysis of likely forecast
scenarios.
Highlights
2011 saw the UK credit card market recover much of the ground lost in previous years. Going into
2012 credit card numbers are increasing for the first time since well before the crisis, and
opportunities for growth are slowly emerging. Consumer behaviour has changed significantly
however, and issuers will need to adapt to fight off new threats.
Recent economic circumstances have exacerbated long-term cards trends. Debit transaction
values are growing much faster than credit, which have remained relatively flat. Whereas debit
card transaction values have grown year-on-year, credit cards have alternated between shrinkage
and growth.
2011 saw credit card write-offs, outstanding balances, and insolvencies all decline significantly.
This has reduced the risks for credit card issuers, but sustained high unemployment will continue
to restrict growth opportunities.
Your key questions answered
•How is the UK recovering from recession? How has the cards market changed as a result?
•What is driving card growth in 2013?
•How have card balances, write-offs, and transaction values changed over the crisis?
•What impact will pay day loan companies have upon credit card issuers?

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Major points covered in Table of Contents of this report include
Table of Contents
OVERVIEW
Catalyst
Summary
THE UK CREDIT CARD MARKET: THE WORST IS OVER BUT TROUBLE REMAINS
The worst may be over but challenges to revenue remain
Unemployment is high but relatively stable
The financial crisis has exaggerated the underlying trend of declining balances outstanding
Personal insolvencies have been steadily declining from the record highs of Q1 2010
The credit card market has been dented by the crisis
Overdraft borrowing is in decline, as consumers are paying off their outstanding overdraft
balances
Credit card numbers are showing the first signs of recovery
Consumer behavior has changed significantly since 2009
The total value of credit card transactions has returned to growth
Credit cards are being used more frequently again, but consumers are spending less on each
transaction
Consumers are shifting away from ATM cash withdrawals
Things can only get better? Consumer expectations have dropped as economic recovery remains
elusive
Debit cards pose a significant challenge to credit, dominating overall card use
DATAMONITOR FORECASTS A RECOVERY IN THE CREDIT CARD MARKET INTO 2013
The credit card market will see overall growth in 2012 and 2013
The value of credit card transactions will grow in 2012, reaching £126.6bn
POS credit card transactions will grow by 3.3% in 2012 and a further 4.1% in 2013
ATM credit card withdrawals will continue to decline, but at a slower rate
Market indicators suggest that 2012–13 will see growth
Debit cards will continue to grow in popularity
ISSUERS NEED TO ADAPT IN ORDER TO SUCCEED IN THE NEW CREDIT MARKET
The market has stabilized, but external risks continue to pose a threat
Issuers will need to adapt in order to boost revenue streams
Consumers continue to reduce the level of personal debt
Increased transparency could boost the public image of credit cards
Issuers now need to focus on securing growth
Increasing card usage must be a priority for issuers
THE RISING THREAT OF PAY DAY LOAN COMPANIES
Overview
Wonga is winning the PR battle
However, pay day loan companies are not a complete success story

3. APPENDIX
Supplementary data
Insolvencies, card write-offs, and unemployment
Datamonitor’s forecast for the credit card market under a neutral scenario
Datamonitor’s forecast for the credit card market under an optimistic scenario
Datamonitor’s forecast for the credit card market under a pessimistic scenario
Datamonitor’s forecast for the debit card market under a neutral scenario
Definitions
(Untitled sub-section)
Methodology
Cards and payments database
Forecasting methodology
Further reading
Ask the analyst
Disclaimer
List of Tables
Table: Historic and forecast credit card market under a neutral scenario
Table: Historic and forecast market drivers under neutral, optimistic, and pessimistic scenarios,
2007–13f
Table: Historic and forecast debit card market under a neutral scenario
Table: Insolvencies, credit card write-offs, and unemployment, 2007–12
Table: Year-on-year growth in, insolvencies, card write-offs and unemployment
Table: Neutral scenario for the historic and forecast credit card market, 2010–13f
Table: Optimistic scenario for the historic and forecast credit card market, 2010–13f
Table: Pessimistic scenario for the historic and forecast credit card market, 2010–13f
Table: Neutral scenario for the historic and forecast debit card market, 2010–13f
List of Figures
Figure: Unemployment in July 2012 was lowest in the south of the UK
Figure: Card write-offs are now firmly in decline, having spiked in both 2009 and 2010
Figure: Credit card write-offs have declined to their lowest level since Q2 2005, at £568m
Figure: Balances outstanding have declined by 12.9% since December 2009
Figure: Personal insolvencies remain high, but are steadily declining
Figure: Personal insolvencies remain highest in the North East of England
Figure: The value of transactions has been recovering, while balances continue to decline
Figure: Overdraft borrowing has declined significantly since September 2011
Figure: The number of cards in issue is starting to recover
Figure: Transaction values have increased from a year previously, but not across every month
Figure: Credit cards are being used more frequently, but the average transaction value has
dropped
Figure: The rate of growth in ATM transactions has been declining over the long term
Figure: Consumers are becoming more pessimistic about the future
Figure: The gulf between credit and debit continues to grow

4. Figure: The value of credit card purchases will continue to increase into 2013
Figure: POS credit card transactions will reach £128.3bn in 2013
Figure: Credit card ATM withdrawals will continue to decline but more gradually
Figure: Under all scenarios the credit card market will continue to decline in 2010
Figure: Debit use at the POS is forecast to grow rapidly
Figure: Wonga’s upfront approach has proven to be popular with consumers
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