The Italian store cards market reached €2.95 billion in transaction value in 2012, declining by 4% compared to 2011, while the number of cards in circulation in 2012 was 2.98 million, declining by 3%.
The performance of the store cards market was negatively influenced by the competition of other payment methods, in particular pre-paid cards and co-branded cards, which are considered more convenient by Italians, as they can be used at a broader range of merchants. Therefore, store cards progressively lost share.
Store cards also declined in popularity over the past four years due to the negative effects of the economic and financial crisis which made Italians more cautious in making expenses. The negative performance of the category was also influenced by the inner characteristics of the product, which is not flexible and therefore does not fulfil consumers' needs.
The most important issuers of store cards in Italy in 2012 were Carrefour and Esselunga which accounted respectively for 23% and 21% value share, although they lost sales in terms of transaction value given that the overall category performed badly in 2012.
In addition, Italian store cards is reaching maturity as Italian retailing chains are not as common as in other countries and the majority of retailers are independent small companies.
It is expected that over the next five years store cards will decrease in constant value terms for transactions reaching €2.4 billion and will also decline in the number of cards in circulation reaching 2.7 million by 2017.
The expected negative performance of store cards is linked to the inner product characteristics and the competition from other payment methods, which are in many instances preferred by Italian consumers. In particular other methods, such as pre-paid cards and co-branded cards, are expected to be preferred by Italians and therefore the performance of store cards is expected to be seriously undermined.
It is expected that there will be an increasing substitution of store cards with co-branded cards, offered by retailers in partnership with financial institutions that can offer additional benefits to Italians and can therefore attract a larger consumer base.
For more information on the Italian store cards market, see the latest research: Italian Store Cards Market
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