Wednesday, February 28 2024 21:23
Karine Melikyan

Micro-processing cards with NFC chip account for almost 70% of total  number of cards in Armenia, already reaching 2.6 million

Micro-processing cards with NFC chip account for almost 70% of total  number of cards in Armenia, already reaching 2.6 million

ArmInfo.As of January 1, 2024, the total number of cards in the Armenian plastic market reached more than 3.722 million cards,  with a y-o-y growth of 17%. At the same time, micro- processing cards with an NFC chip have increased 3-fold over three years, including by 24% in 2023 (versus 45% in 2022), amounting to 2.6 million cards, with their dominance growing in the total number of cards to almost 70%, by data from the Central Bank of the Republic of Armenia.

Among micro-processing cards with an NFC chip, Visa has the largest  share - 59.2% or 1.534 million, Mastercard accounts for 31.7% or  820.1 thousand, other international cards - 8.7% or 226.3 thousand  cards, and local ArCa accounts for the remaining 0.4% or 8.7 thousand  cards. Notably, among micro-processing cards, it was local ArCa that  this time showed impressive y-o-y growth - 6.7-fold, against the  background of which Visa cards, the leader in terms of number,  increased moderately - by 16.6%, Meanwhile, at an increasing rate, it  was surpassed not only by Mastercard - 27.3%, but also by other  foreign cards, including HSBC, AmEx, Diners Club, MIR) - 43%

High double-digit growth is also recorded for virtual cards - by  32.6% year-on-year to 133,082 thousand (3.6% of the total number of  cards). And if until mid-2022 there were only Visa virtual cards,  then from Q3 there were also virtual Mastercard cards.

This y-o-y growth of virtual cards was largely supported by a  noticeable increase in Mastercard cards - 5.6- fold, with Visa cards  growing by 30.4%, however, Visa cards remain dominant: 130,161  thousand.  In parallel, cards with magnetic tape, the number of which  decreased by 31% until mid-2022, began to gradually increase from  month to month after July 1 last year, when the updated law on  non-cash payments came into force, obliging payments to be made  exclusively by non-cash means. But their current number of 867,744  thousand, as a result of slowing 12.7% y-o-y growth, has moved more  noticeably away from the previous milestone of more than a million  cards, which is fully explained by their accelerated replacement with  micro-processing ones. As a result, the share of cards with magnetic  tape in the total number decreased from 42% to 23% in 2020-2023.

Moreover, notably, the y-o-y growth of these cards with magnetic tape  was ensured by local ArCa cards, which, taking into account their  affordability, were mainly provided to pensioners to receive pensions  and make non-cash payments. In particular, there are now 841.568  thousand ArCa cards with magnetic tape and their number increased by  14.5% over the year. The share of hybrid cards has already decreased  to 3.6% of the total number, amounting to 132.268 thousand with a  y-o-y decline of 31.6%, which was due to an 2- fold impressive  reduction in the dominant Visa and Mastercard cards, with an increase  in local ArCa cards by 48%.  Meanwhile 0.5% of the total number of  cards or 20,243 thousand are co-branded  ArCa-MIR cards, the growth  of which slowed down year-on-year from 81% to 65.4%. But  nevertheless, over the past two years their number has tripled. Let  us remind you that in 2022, starting from March, the number of these  cards began to increase sharply, accelerating monthly due to the high  demand from immigrants arriving in Armenia, mainly from Russia. But a  year later, the excitement subsided and the pace returned to the  normal growth trajectory.

The driving force behind the annual increase in the total number of  cards continues to be Visa cards, the volume of which increased by  14% over the year and amounted to 1.723 million units, which allowed  maintaining dominance at 46.3%.

The driver of the y-o-y growth in the total number of cards continues  to be Visa cards, the volume of which increased by 14% over the year  and amounted to 1.723 million, which allowed maintaining dominance at  46.3%.  Mastercard cards increased year-on-year by 19.1% to 878,001  thousand, the share of which in the total number of cards increased  slightly from 23.2% to 23.6%. At the same time, local ArCa cards,  having improved their dynamics coming out from the recession by 16.1%  growth, reached 871.809 thousand cards, coming very close to  Mastercards both in quantity and in share coverage of 23.4%. However,  other foreign cards (including HSBC cards, AmEx, Diners Club, MIR)  provided much higher y-o-y growth than Visa and Mastercard - by 35.3%  to 248.824 thousand, even more increasing their share in the total  umber of cards from 5.8% to 6.7%.

 Debit cards continue to dominate the total number of cards - 65.7%  or 2.445 million, followed by payment cards - 32.6% or 1.212 million,  against which the share of credit cards has already decreased to 1.8%  or 65.184 thousand. Moreover, the number of debit and payment cards  continues to grow - by 18.9% and 14.1% per annum, respectively. As  for credit cards, their number, after a significant halving in 2022,  began to increase again from mid-2023 alone, and so weakly that the  y-o-y growth was a meager 1.5%. And if previously Visa held the lead  only in debit and payment cards, and Mastercard was in the lead in  credit cards, then from Q4 2022, Visa replaced Mastercard as the  leading credit card. As a result, as of January 1, 2024, the number  of Visa debit cards has already reached 1.1 million 616 thousand, and  the number of Visa payment and credit Visa cards has reached more  than 40 thousand cards.

In mid-November 2023, two Armenian banks, Acba Bank and Converse  Bank, were granted permission by the RA Central Bank to participate  in the UnionPay International (UPI) foreign settlement and payment  system. However, notably, Acba Bank has been servicing cards of this  system since October 2019.

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