UK credit card market led by Barclays and the Royal Bank of Scotland

The UK credit card market recorded a 1% current value growth in 2012, to reach a value in excess of £121 billion in 2012.

Back in 1966, Barclays had introduced the credit card to the UK with its iconic Barclaycard. In doing so, it launched a multi-billion pound industry. The credit card became a consistent provider of growth and profits to UK banks and other card issuers. No other country in Europe achieved anything on a comparable scale.

In 2012, there was a fall in the number of credit cards in circulation to 55 million cards, down by 2% after the other drop of 2% reported in 2011. However, credit cards fared better in terms of value and volume of transactions, which rose by 1% and 5% respectively.

The fall in the number of cards does not come as a surprise in the current economic climate, as consumers find it more difficult to obtain cards due to banks applying stricter criteria, and consumers are keen to reduce their level of debt, thereby avoiding cards which carry a high APR.

The United Kingdom credit cards market is highly fragmented with the leader, Barclays, accounting for 13% of the total value of transactions, followed by the Royal Bank of Scotland with 11%.

The latter was the leader until 2010, but it was overtaken by Barclays in 2011 following the acquisition of the UK credit card issuer Egg from Citigroup. Behind the two leading players is HSBC (8%), and MBNA and Lloyds TSB with a value share of 7% each.

Over the next five years transaction volume and constant value are expected to maintain positive growth supported by the introduction of contactless credit cards which can be used for low value transactions, while so far credit cards have been mainly used for higher value purchases.

For more information on the UK credit card market, see the latest research: UK Credit Card Market

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