Wednesday, December 11, 2013

Number of credit cards in Indonesia to reach 290 million by 2017

Key Highlights of a report by Market Research (Market Research)

- The Indonesian card payments channel registered significant growth during the review period (2008–2012), recording a compound annual growth rate (CAGR) of 21.26% to reach 113.2 million cards in circulation by the end of 2012. It is anticipated to grow at a projected CAGR of 20.36% over the forecast period (2013–2017), to reach 289.9 million cards in 2017.

- Growth in the Indonesian cards payments channel is expected to be driven by increasing demand for prepaid cards, a better regulatory framework, a growing market for online and mobile commerce, and a positive economic outlook.

- Indonesia's central bank, Bank Indonesia (BI), enforced new regulations for the credit card category in January 2013, placing a cap on interest rates charged by banks on credit cards. BI also set the minimum monthly income requirement at IDR3 million (US$32), and the maximum available credit limit at three times this rate. Credit card users must be at least 21 years old.

- The popular payment channels in Indonesia are credit transfers, checks and cards. The payments channel structure has changed significantly in the past decade and new channels with paperless transactions have gained popularity. Most transactions, however, are still made with cash.

- In terms of transaction value, the channel grew at a CAGR of 19.68% from IDR846.7 trillion (US$87.3 billion) in 2008 to IDR1.7 quadrillion (US$185.2 billion) in 2012.

- Debit and credit card transactions remained the key growth drivers, followed by prepaid cards which registered increased demand from Indonesian consumers.

- Over the forecast period, the total card transaction value is expected to grow at a CAGR of 12.52%, to reach IDR3.3 quadrillion (US$328.8 billion) by the end of 2017.

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