Thursday, September 15 2016 18:37
Karina Melikyan

CBA: Growth rates of non-cash plastic card transactions slackened in Armenia

CBA: Growth rates of non-cash plastic card transactions slackened in  Armenia

ArmInfo. Growth rates of  non-cash transactions by plastic cards slackened in Armenia.  According to the report of the Central Bank of Armenia the amount of  non-cash card transactions totaled 85.7 bln drams in H1 2016. Despite  significant amounts in absolute terms the growth rates of non-cash  payments by bankcards slackened to current 12% from previous 32%. 

According to regulator's data total amount of plastic transactions  totaled 655.5 bln drams in H1 2016.  However, y-o-y dynamics of this  indicator deteriorated to 1% decline from 19.3% growth. At the same  time number of active cards increased to 1.8 mln with acceleration of  growth rates from 1.4% in H1 2015 to current 6.4%. Meanwhile, two  years ago, in H1 2014, general transactions demonstrated 26% growth  amid 10% growth of cards number. 

It is noted that in 5-year terms the amount of non-cash plastic  transactions grew 3.3-fold and the main growth almost-2-fold-was  registered in the recent 3 years. In total amount of plastic  transactions the share of non-cash ones grew from 7 to 13% within  recent 6 years (July 1 2016 versus July 1 2010), which is determined  by significant activation of internet trade and efficient measures  taken by the banks to boost non-cash transactions such as CashBack. 

Visa (45%) holds leading position by number of cards on Armenian  plastic cards market as of July 1 2016, pushing aside ArCa local  cards to second position (30%). The share of MasterCard is 22%, and  the remaining 3% is the share of other international cards (HSBC,  American Express, Diners Club).  Meanwhile, in y-o-y terms the share  of Visa and ArCa in total number of operating cards declined from 46%  and 33% respectively, while the share of MasterCard grew from 18%. In  5 years term (July 1 2016 versus July 1 2011) the number of active  cards grew 2.1-fold with similar growth of volume of transactions,  and in three-years term (versus July 1 2013) the growth of these  indicators totaled 19% and 49% respectively. 

According to data of CBA as of July 1 2016 there were 784.2 thousand  Visa cards in Armenia, 534.4 thousand ArCa cards, 392.2 thousand  MasterCard, the number of other international cards (mainly HSBC  cards, as well as AmEx and Diners Club) totals 45.5 thousand. In Q2  2016 alone the growth rates of number of operating cards has not  changed significantly-0.8% versus 0.7% in Q1, mainly due to  accelerated growth of MasterCard-to 8.4% from 5.1%, while  acceleration of decline was registered in number of ArCa and Visa  cards. Y-o-y acceleration of growth rates of the number of active  cards is caused mainly by sharp improvement of MasterCard  dynamics-from 4.1% decline to 30% growth, amid slackening growth of  number of Visa cards-from 8.4% to 3%, continuing decline of the  number of ArCa- by 1.5% and deterioration of dynamics of other  international cards -from 2.1% growth to 1.2% decline. 

Deterioration of y-o-y dynamics of plastic transactions (1% decline  versus 19.3% growth) is related to both local and international  cards: growth of transactions by ArCa slackened to 1.2% from 8.8%, by  Visa-to 1.1% from 20.4%, MasterCard-to 11.7% from 24.2%, and  transactions by other international cards registered 53.5% drop  versus 40.4% growth. Visa holds leadership by amount of transactions  since 2011- 314 bln drams in H1 2016, pushing ArCa back on second  position-166 bln drams, MasterCard holds the third place with  insignificant difference-more than 151 bln drams. In five years term  the biggest growth of amounts was registered in transactions with  MasterCard-3.2-fold and Visa-2.5-fold, amid more moderate growth of  transactions with ArCa-by 56%. 

As of July 1 2016 the number of POS-terminals in Armenia totaled  6630, 772 of which are located in head offices and branches of the  banks. In y-o-y terms total number of POS-terminals grew by 5% or 337  and in Q2 alone-by 3% or 177. As of July 1 2016 there were 1511 ATMs  with 8% y-o-y growth or by 114, 82 of which were installed in Q2. In  5-year terms the number of ATMs grew by 67% or by 606 (300 of which  installed in recent 3 years), and POS-terminals by 56% or by 2388,  out of which terminals in banks and their branches registered 50%  growth. Since 2015 CBA stopped publishing the number of trade/service  centers where ATMs or POS terminals have been installed, however in  the end of 2014 their number was 6619, 3694 of which in trade centers  and 275 in hotels. 

To recall, Central Bank of Armenia is the majority shareholder of  ArCa. The other big shareholders are ACBA-Credit Agricole Bank,  Armeconombank and Ardshinbank. The other 14 commercial banks hold by  2% stakes in ArCa system.

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