The report provides detailed analysis of Danish cards and payments industry. It gives insights of major performance indicators in the industry, including check payments, payment cards, cash transactions, direct debits and credit transfers during the review period (2011-2015). The report analyzes various payment card markets operating in the industry and provides detailed information on the number of cards in circulation and transaction values and volumes. It also offers information on the country’s competitive landscape, including the market shares of issuers and schemes.
Over the last years, there has been a lot of conversation regarding Denmark’s shift towards a cashless society. There has been a consistent increase in the number of non-cash users in the country. This growth is being driven by the increasing number of Danes switching from using cash to using cards more frequently and improving economic conditions with increasing expenditure. Debit cards remain the most popular type of payment cards in Denmark, which can be associated to the popularity of the national debit card Dankort, the majority of which are now co-branded with Visa. Dankort is the leading financial cards operator in terms of the number of cards in circulation as well as in terms of transactions value and there are various different factors which can explain the commanding position of this payment system in Denmark.
Mapping the popularity of Dankort in Denmark
From the above figure it is clear that Dankort is one of the leading payment systems in Denmark. The reason for its popularity, includes among others, high merchant acceptance in all parts of the country, the long history and continued existence in the industry and most importantly, relatively low cost of holding these cards. The Dankort cannot be used outside Denmark. However, since most of these cards are co-branded cards, co-branded with Visa, they can be used abroad. When VisaDankort cards are used abroad, it is still, in practice, a debit card, since payments are debited from the consumers’ accounts within a few days.
In addition to the Dankort, Danis banks also issue other types of similar card which can be used abroad i.e. international debit cards. Unlike payments using Dankort, the balance is checked when payments are made using international debit cards implying that the card holder cannot exceed the permissible credit limit.
In the year ending 2012, there were approximately 11 million payment cards in Denmark i.e. approximately 2 cards per Dane. Of these 11 million cards, Dankot cards were the leaders followed by Visa Dankot and International cards. The EU member states made 73.5%transactions on average with payment cards per capita. Every Dane made an average of 196.5 transactions with their payment cards. The Danes were only exceeded by the Swedes in regards to average transaction per capita in 2010. International credit cards were initially assigned to primarily to employees in firms as corporate cards but, they were later on also assigned to individuals, free of charge or against a small fee which lead to a considerable growth in the number of these cards.
Comparison of the number of cards issued in Denmark
Source: Denmarks National Bank
Recent year’s growth in the number of cards in Denmark indicates that virtually, all adult Danes now hold a card. More than half of all adult Danes have two or more payment cards.
Key Macroeconomic Trends Driving Growth of Card Industry in Denmark
The various macroeconomic factors that can be associated with the consistent growth of the card industry in Denmark are as follows:
- Focus on faster payments
Since consumers prefers short payment times, which is reflected in their choice for cash payments, it acts as a barrier to improving the security of online payments as they typically prolong the whole payment procedure.
- Enhanced role of the other service providers
Although banks are the major providers of payment services, over the past few years there has been an alarming increase in the role of other service providers, both as providers of payment services as well as more technical services. This growing acceptance of other providers is also supported by legislation.
- Expansion of large firms
The expansion of their activities by large firms leads to a boost to the payments. Similarly, existing providers of payment services are seeking to gain ground in new areas. For example- Paypal which was initially aimed at payments of online shopping and person to person transfer has now also extended its operations to offering solutions to payments in retail stores.
To know more on coverage on report titled “ THE CARDS AND PAYMENTS INDUSTRY IN DENMARK: EMERGING TRENDS AND OPPORTUNITIES TO 2020”, click on the link below
Ankur Gupta, Head Marketing & Communications