The Cards and Payments Industry in Hungary: Emerging Trends and Opportunities to 2020

The Cards and Payments Industry in Hungary: Emerging Trends and Opportunities to 2020

  • December 2016 •
  • 53 pages •
  • Report ID: 4035089 •
  • Format: PDF
The Cards and Payments Industry in Hungary: Emerging Trends and Opportunities to 2020

Summary

Cash remains the preferred mode of consumer payments in Hungary, accounting for 68.3% of the country’s total transaction volume in 2016. However, the Hungarian government’s initiatives to encourage electronic payments, improved banking infrastructure, a consumer shift towards card-based payments, the growing acceptance of payment cards by retailers and the advent of contactless technology are expected to increase the share of electronic payments over the forecast period (2016-2020).

Banking penetration grew steadily in Hungary; 73.6% of the individuals aged above 15 have a bank account as of 2016. Concentrated efforts by the government, coupled with investment in payment infrastructure, led to an increase in the banked population. The central bank and commercial banks played an important role in increasing awareness through financial literacy programs such as workshops and promotional campaigns, which resulted in an increase in the total number of bank accounts and banking products.

Debit cards remain the most-used payment cards among Hungarian residents. To capture a larger share of the market, banks in Hungary initially targeted businesses, urging them to deposit the salaries of their employees directly into their bank accounts. The process, which began in the early 1990s, has now reached a point where almost all organizations in Hungary deposit salaries directly into the bank accounts of their employees. This has led to increased debit card penetration, and also provided banks with a platform to cross-sell their credit cards.

Contactless technology is expected to gain prominence among Hungarian consumers. Banks and payment service providers are also keen to promote contactless technology, and are launching new services to increase its uptake. Overall, the number of contactless cards increased significantly from 580,051 in 2012 to 5.7 million in 2016, as banks are trying to promote new technology to retain their market shares in the fast growing Hungarian payment cards market.

The report "The Cards and Payments Industry in Hungary: Emerging Trends and Opportunities to 2020" provides top-level market analysis, information and insights into the Hungarian cards and payments industry.

In particular, this report provides the following analysis -
- Current and forecast values for each market in the Hungarian cards and payments industry, including debit, credit and charge cards.
- Detailed insights into payment instruments including credit transfers, cash, direct debit and payment cards. It also, includes an overview of the country’s key alternative payment instruments.
- E-commerce market analysis.
- Analysis of various market drivers and regulations governing the Hungarian cards and payments industry.
- Detailed analysis of strategies adopted by banks and other institutions to market debit, credit and charge cards.

Companies mentioned in this report: OTP Bank, Erste Bank, UniCredit Bank, Kereskedelmi és Hitelbank-KBC Bank, Budapest Bank, Citibank, Visa, Mastercard, American Express.

Scope

- The uptake of alternative payments among Hungarian consumers is gradually gaining traction, as a result of the emergence of a number of payment options. The latest of these is the launch of mobile carrier billing services by the mobile payments company Fortumo, along with the mobile operator Telenor in November 2016. This new service enables subscribers of Telenor to make payments in app stores, games and digital merchants by charging payments to their mobile phone bill. Previously, in July 2015, Mastercard, in association with OTP Bank, launched MasterPass in Hungary. The bank’s OTPay mobile wallet integrates the MasterPass app, which allows consumers to store their payment card details and shipping and billing address details in one place. This service enables OTPay consumers to make payments and person-to-person (P2P) fund transfers. Customers of other banks can also use the MasterPass platform for payments. Previously in May 2015, Vodafone Hungary launched the Vodafone Wallet app, in association with OTP Bank and Mastercard.
- The uptake of contactless payments among Hungarian consumers is gradually gaining traction, as both banks and payment service providers are launching new solutions in the market. A key driver of contactless payments has been the increasing use of contactless payments in public transport systems. OTP Bank, in association with Mastercard and Magyar Telekom launched a new payment system in March 2015 to enable passengers in Szolnok city to make contactless payments for transportation using Mastercard and Maestro cards.
- In a move to promote electronic payments, the Hungarian government launched the National Mobile Payment System in July 2014, allowing users to pay transportation fees using mobile phones via a national platform. This service allows consumers to make payments for parking, motorway toll stickers and Hu-Go road tolls using the mobile app. Consumers register on the national mobile payment system’s website or mobile app managed by Nemzeti Mobilfizetési, and can transfer funds to their account using payment cards or current accounts. In the one year since its launch, the system registered 17.9 million transactions.

Reasons to buy

- Make strategic business decisions, using top-level historic and forecast market data, related to the Hungarian cards and payments industry and each market within it.
- Understand the key market trends and growth opportunities in the Hungarian cards and payments industry.
- Assess the competitive dynamics in the Hungarian cards and payments industry.
- Gain insights into marketing strategies used for various card types in Hungary.
- Gain insights into key regulations governing the Hungarian cards and payments industry.
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