The Cards and Payments Industry in Kazakhstan: Emerging trends and opportunities to 2021

Summary

Debit card penetration in Kazakhstan stood at 74.7 cards per 100 individuals in 2016, higher than its regional peers Romania (66.8), Ukraine (65.3), and Azerbaijan (47.8). This was supported by the country’s increasing banked population. Kazakhstan has made substantial progress in terms of financial inclusion, with the percentage of the population aged 15 or above with a bank account rising from 46.2% in 2012 to 61.8% in 2016.

Credit card market in Kazakhstan is still developing, with penetration of just 13.4 cards per 100 individuals in 2016. But the cards registered the fastest review-period (2012-16) compound annual growth rates (CAGRs) of 19.2% and 30.8% in terms of transaction value and volume respectively. To increase credit card penetration, banks have adopted customer segmentation strategies, targeting niche segments such as high-income individuals. In partnership with Visa, Russian banking group Sberbank launched a hand-crafted solid gold Visa Infinite credit card studded with 26 diamonds.

Cash remains the preferred consumer payment instrument in Kazakhstan, due to a lack of adequate banking infrastructure, limited awareness of electronic payments, and low acceptance at retailers. However, the use of cash is anticipated to decline gradually over the forecast-period (2017e-21f) as a result of initiatives by the government and banks to promote electronic payments. This includes expanding banking infrastructure and financial literacy, a de-dollarization plan, forcing retailers to install point of sale (POS) terminals to accept payment cards, and restraining the use of cash transactions for sole proprietors and companies, with tax incentives for businesses that accept payment cards.

Contactless payments are gradually gaining prominence in Kazakhstan as banks and card schemes are increasingly working towards offering convenient payment services to customers. In February 2016, Visa collaborated with Kazkommertsbank to introduce a contactless m-payment service. The service, which is based on host card emulation (HCE) technology, will allow the bank’s customers to make contactless payments using Android smartphones with NFC chips.

The report “The Cards and Payments Industry in Kazakhstan: Emerging trends and opportunities to 2021” provides detailed analysis of market trends in the Kazakhstan’s cards and payments industry. It provides values and volumes for a number of key performance indicators in the industry, including credit transfers, payment cards, direct debits, and cheques during the review-period (2012-16).

In particular, this report provides the following –
– Current and forecast values for each market in the Kazakhstan’s cards and payments industry, including debit and credit cards.
– Detailed insights into payment instruments including credit transfers, cheques, 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 Kazakhstan’s cards and payments industry.
– Detailed analysis of strategies adopted by banks and other institutions to market debit and credit cards.

Companies mentioned in this report: Halyk Bank, Kazkommertsbank, Eurasian Bank, Bank CenterCredit, ATF Bank, Kaspi Bank, Visa, Mastercard, China UnionPay, American Express.

Scope

– Contactless payments are gradually gaining prominence in Kazakhstan as banks and card schemes are increasingly working towards offering convenient payment services to customers. In February 2016, Visa collaborated with Kazkommertsbank to introduce a contactless m-payment service. The service, which is based on host card emulation (HCE) technology, will allow the bank’s customers to make contactless payments using Android smartphones with NFC chips. The solution enables holders of Visa cards issued by Kazkommertsbank to easily integrate them with their Android smartphones to pay for goods and services, both in Kazakhstan and in other countries where contactless Visa payWave technology is available. The service requires consumers to enter a PIN code for transactions over $15 (KZT5,000). Earlier in June 2014, Kazkommertsbank collaborated with Mastercard to launch mobile contactless payments.
– While banks in Kazakhstan still focus on traditional bricks-and-mortar branches to deliver services, B1NK Bank, a mobile-only bank of Capital Bank Kazakhstan, allows consumers to conduct banking transactions purely via mobile phones. In August 2016, the bank introduced a new service allowing users to transfer money to friends via a messaging app. The app also provides assistance regarding ATM and Capital Bank Kazakhstan branch locations, currency exchange rates, and card balances and transaction history. Meanwhile digital bank Altyn-i was launched by Halyk Bank in 2016. It offers an online platform for consumers to open a bank account, access credit, and save money for corporate or individual needs. The advent of mobile-only banks is likely to accelerate a shift towards electronic payments in Kazakhstan.
– To benefit from the growing adoption of alternative payment solutions, UnionPay International partnered with Halyk Bank to introduce its HCE- and tokenization-based mobile payment (m-payment) service QuickPass in Kazakhstan in May 2017. Previously, in February 2017 Visa announced plans to launch its m-payment solution mVisa, which allows users to make in-store payments by scanning a QR code or entering the merchant’s identification number. Consumers can also transfer funds to family and friends and pay utility bills by linking the mVisa app with their respective Visa debit, credit, and prepaid cards.

Reasons to buy

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