Competitive Dynamics in the UK Payment Card Market



Verdict Financial

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The Big Four banking groups (HSBC, Lloyds Banking Group, RBS Group, and Barclays) remain dominant in the UK payment card market. However, the market has opened up in recent years following the entry of new players and the weakening of the position of the major incumbents. This has led to high levels of competition for customers.

Gain an improved understanding of the dynamics currently affecting competitors in the UK cards market.
View key metrics for each of the major issuers in the pay now and pay later cards markets.
Use Verdict Financial's in-depth analysis of the strategies being employed by UK card issuers to inform your strategy.
Benefit from strategic recommendations informed by Verdict Financial's extensive market research.

Have the major card issuers changed market share significantly?
What are the major challenges to the established issuers in the UK market, and how are issuers responding to these challenges?
What are the successful strategies being used to acquire and retain customers, and why are they successful?
Which strategies will bring issuers success in the UK market in the future?

Key Highlights
The replacement of the Payments Council and the implementation of the Multilateral Interchange Fee Regulation are expected to restrict issuer incomes. Issuers can deal with these challenges by passing on costs to consumers, but this needs to be done carefully to avoid alienating them.

The card-linked loyalty model has enabled issuers to offer debit card loyalty programs with merchant-funded offers. The fact that these schemes are now viable means issuers should seek to enter partnerships with third-party loyalty providers to add these schemes to their portfolios.

Introductory balance transfer offers have been steadily increasing in the UK market due to heavy competition for credit card customers. However, some issuers such as RBS and NatWest are abandoning this market entirely, which may indicate the unsustainability of the current model.