Domestic schemes are widely used for payments in many European countries, accounting for an impressive 28% of the region’s card expenditure. Enhanced functionality enables them to compete effectively with international schemes

The vast majority of cards in Europe carry a Visa or Mastercard brand

RBR’s new study: Global Payment Cards Data and Forecasts to 2021 reveals that Visa and Mastercard together accounted for 87% of the 1.5 billion cards issued in Europe at the end of 2015. Europe is unlike other regions in that domestic-only bank cards are rare, making up less than 5% of the regional total. Domestic schemes are more commonly present on the same card as an international scheme, and normally used in the country of issuance. So-called “dual-badged” cards are found in several large markets, including France, Germany and Italy.

According to Article 8, one of the business rules of the European Commission’s regulation on interchange fees which came into effect in June 2016, card schemes may not oblige their members to report transactions for which their scheme is not used. On this basis,Visa and Mastercard collectively account for just 67% of the €3.2 trillion spent on European cards in 2015 – a far smaller proportion than these schemes’ cardnumbers.

RBR has found that domestic schemes make up 28% of card spending across Europe overall, and more than 60% in Belgium, Denmark, France, Germany and Norway – all countries where dual-badged debit cards are issued widely and used heavily.

Share of value of card payments by scheme in Europe, 2015

Source: Global Payment Cards Data and Forecasts to 2021 (RBR)
Source: Global Payment Cards Data and Forecasts to 2021 (RBR)

Domestic schemes will continue to play an important role

Many domestic schemes in Europe have sought to innovate in recent years to keep pace with international competitors. For example, contactless functionality has been added to domestic schemes in Germany and Denmark.There have also been initiatives to add e-commerce capability to various domestic schemes in the region. Furthermore, new domestic schemes in Russia and Turkey promise to boost competition in these two rapidly developing markets. RBR’s Chris Herbert commented: “Domestic schemes will continue to play an important role in the European payment landscape for the foreseeable future, ensuring a competitive and service-driven market for banks and consumers alike.”

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