Ukrainians are getting used to the plastic cards
These are the results of the regular market survey of banking services for individuals conducted by GfK Ukraine:
- Number of plastic cards users grows gradually in Ukraine. In 2010, 47,3% of respondents aged above 16 years old replied positively about using plastic which is 4.3 p.p. more than 2008 indicator value.
- However, it is an employer who initiates opening a card account in a half of all cases. This indicator remains stable during recent years. At the same time, number of users who got the card by their own initiative has increased.
- The most popular card operation is getting cash through ATM. However, there is a growing tendency to use the card when paying for goods and services in retail outlets.
Individual cards market: user’s profile
The Ukrainian market of individual cards not only not reduced but, despite the crisis, even increased by the number of active users in recent years. If in 2008, the number of cards users among individuals reached 43.6% of Ukrainian population aged over 16 years, in 2009 it was just over 44%, then in 2010 this figure reached 47.3%.
One the special features of the market is still that more than half the cards (56% in 2010) are opened by the employer while individual initiative to open bank cards was observed among 28% of users in 2010 (that is 3.7 p.p. more than in 2008). «In fact, the decision is not made by end users and third parties whose motivation depends rather not on the quality of services, but on the financial benefits and convenience for the accountants at the enterprise. It is also supported by the results of our survey of bank services market for corporate clients», as commented by Dmytro Yablonovskyy, Head of the Financial Research in GfK Ukraine.
The recipients of regular income are the most active card users – there is the highest share of those who receive earnings to the card, and this figure is 88% for students, grown significantly over the past two years. Also the number of card account users increased among pensioners. Over one third of those who receives pension get it on the card.
Regarding socio-demographic profile of bank cards users, they are rather people aged 20-49 years, mostly living in the East and less often in the West, mainly in cities, possessing higher education, employed, and having a relatively higher level of income.
Ukrainians still prefer cash
The most popular card operation is to take cash in ATMs (86.6%). The second place with a considerable margin is occupied by taking cash through the bank (36%). However, the share of users of these operations tends to decrease slightly over time in contrast to the third popular transaction – payment for goods and services in shops (17.6% in 2010 compared with 13.6% in 2008).
Respondents mark that one of the main reasons of non-using the card for payment in points of sale is that they prefer cash (42%). It is followed by the small number of shops that accept cards, and finally, the lack of card`s functionality.
«Obviously, at least the second partially and the third reasons are imagined. Although, it should be noted that Ukraine differs so far from other European countries with a considerably high share of non-organized trade, at the open markets in particular», Dmytro Yablonovskyy says. «One of the additional factors that impede the development of non-cash payments is that there are no fees for taking cash at ATMs of bank cards issuers. In fact, this charge lies within the fee the employer pays when transferring wages to the cards. Thus, the financial effect of «withdraw and pay in cash» is comparable with the same of direct payment with the card. Under these circumstances, additional stimulus may be a cash back service already adopted from the Western banking practices and successfully used by some banks in Ukraine».
The level of bank card usage in Ukraine is close to the one of neighboring countries – Bulgaria, Russia, Romania (lies within 40-45%). At the same time similar to Ukraine most of the cards do not have active credit limit on them.
However one cannot claim that the card market got to the saturation point in the long run, as in other countries card penetration is much higher: more that 60% in Greece, more than 85% in Austria, more than 90% in UK.
It’s interesting also that in mentioned neighboring countries similar to Ukraine the bank for the salary card is chosen by an employer. This is completely untypical for Austria and Britain, where the employees choose the bank themselves. At the same time in Greece big companies often offer employees 2-3 banks for selection.
The objectives of the Survey of finance and telecommunication markets is to receive regular and prompt information about the state of the markets of the banking, insurance and telecommunications services for individuals.
Survey of banking services is conducted according to the single licensed methodology of FMDS (Financial Market Data Service) Personal. This methodology is applied by all companies of GfK Group in Central and Eastern Europe.
The survey sample consists of 1000 of respondents monthly. It is representative for Ukrainian population aged above 16 years old, by sex, age, region, and settlement size. The survey was conducted with face-to-face interview method.
2010 conclusions are based on the results of population survey conducted in January-September 2010.