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Algeria Country Report

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  • Published Date: September 2017

A comprehensive overview of the cards, payments and consumer banking market in Algeria. By size, Algeria is the largest country in Africa and the tenth-largest country in the world; the country had a population of around 41.2 million at the end of 2016.
The ratio of non-performing loans (NPLs) to total loans declined significantly from 18.3 in 2010 to 9.5 in 2015, reflecting the significant efforts made by banks to clean up their balance sheets. In general, there is a strong demand for cars, which brings with it a strong demand for vehicle finance. As more Algerian car assembly plants are opened, more cars will become available, which will lead to strong demand for vehicle loans. It is most likely that demand for vehicle finance will remain strong over the medium term at least.
At the end of 2016, there were approximately 1.5 million debit cards and 6.5 million ATMonly cards in circulation in the Algerian market. There were no credit cards offered in the country but prepaid cards are prevalent in Algeria and are issued by major banks such as BDL, Gulf Bank Algérie and Trust Bank Algérie. Prepaid cards are issued with international travellers in mind, and the majority of these cards can also be used for making purchases over the internet.
Algeria, a cash-dominated market, is underdeveloped in terms of payments acceptance infrastructure. At the end of 2016, there were an estimated 8,000 POS terminals in the country. The Algerian online acquiring market is at a nascent stage of development.

ALGERIA CARDS AND PAYMENTS REPORT | KEY FACTS

  • Algeria is the fourth-largest economy in Africa, with the country having the tenth largest natural gas reserves in the world.
  • Twenty retail banks were operating in the country at the end of 2016; however, the Algerian banking industry remains dominated by six state-owned banks.
  • Consumer credit was severely curtailed by the authorities in 2009. However, this law has since been relaxed, and consumer credit is now available for locally manufactured goods.
  • Cash remains the primary mode of payment in Algeria for day-to-day purchases.
  • Credit cards are not issued in Algeria.
  • The debit card and ATM card penetration rate is extremely low. At the end of 2016, there were only 1.5 million debit cards and 6.5 million ATM cards in the market.
  • The international networks have had little success in penetrating the debit cards market.
  • Major payment card issuers in the country include Algeria Post, the state-owned postal service company, and the six state-owned banks.
  • Algeria, a cash-dominated market, is underdeveloped in terms of payments acceptance infrastructure.

Algeria Payments Research | Report Contents

TABLE OF CONTENTS
Demographics
The economy
Retail banking
Consumer finance market
Cards market
E-money
Profit pool
Pricing and enhancements
The networks: debit cards
Issuers
Merchant acquiring and processing
Online acquiring
Regulatory and other cards market information

Appendix I: Demographics

  • Population metrics
  • Ownership of essential consumer goods
  • Internet usage by population

Appendix II: The economy

  • Major economic indicators

Appendix III: Retail banking

  • Major retail banking indicators
  • Banking/infrastructure penetration
  • Retail banks key metrics
  • Retail banks profit & loss metrics

Appendix IV: Consumer finance market

  • Consumer credit outstandings and indebtedness
  • Consumer credit outstandings by product

Appendix V: Cards market

  • Debit card numbers
  • Debit cards metrics

Appendix VI: The networks: debit cards

  • Networks' debit card market shares
  • Networks' debit card numbers
  • Networks' debit card billed volume
  • Networks' number of debit card transactions
  • Networks' average debit card transaction value

Appendix VII: Card issuers

  • Key debit card Issuers market shares by debit card numbers

Appendix VIII: Merchant acquiring and processing

  • Merchant acquirer debit card market share
  • Debit card merchant service charges

Appendix IX: Online acquiring

  • Online merchant acquirer market share

Algeria Country Report | Selected Extracts

Demographics and Economy
Algeria has the third-largest French-speaking population worldwide, with an estimated 11 million Algerians being able to read and write in French. Oil and gas exports are among the largest sources of revenue, accounting for about 93% of total exports and 38% of the state budget in 2016.

Retail Banking
There were 20 retail banks operating in the country at the end of 2016; however, the Algerian banking industry remains dominated by the five state-owned banks: Banque Nationale d'Algérie (BNA), Banque Extérieure d'Algérie (BEA), Crédit Populaire d'Algérie (CPA), Banque de l'Agriculture et du Developpement Rural (BADR) and Banque de Développement Local (BDL).

Consumer Finance Market
Unsurprisingly, the consumer credit market is underpenetrated in Algeria. At the end of 2016, consumer debt outstanding per household was estimated to be around $568, of which non-mortgage debt was $150.

Cards market
Cash remains the primary mode of payment in Algeria for day-to-day purchases. Cheques and bank transfers are preferred by companies for their daily business needs. To reduce the usage of cash, the authorities are encouraging individuals to use cheques and digital payments for larger transactions.

E-money
Prepaid cards are prevalent in Algeria and are issued by major banks such as BDL, Gulf Bank Algérie and Trust Bank Algérie. Prepaid cards are issued with international travellers in mind, and the majority of these cards can also be used for making purchases over the internet.

Debits Cards
The Algerian debit cards market is a developing one. It is dominated by Algeria Post, which had 81% of debit/ATM cards in issue at the end of 2016. CIB, the domestic debit scheme, held 19% of the market at the same date.

Key Retail Banks and Issuers
Major banks and payment card issuers in Algeria include Algeria Post, the state-owned postal service company, and the six local state-owned banks: CPA, Caisse d'Epargne et de Prévoyance (CNEP), BEA, BADR, BNA and BDL.

Acquiring and Processing
Algeria, a cash-dominated market, is underdeveloped in terms of payments acceptance infrastructure. At the end of 2016, there were an estimated 8,000 POS terminals.

Online Acquiring
The Association of Banks and Financial Institutions (ABEF) partnered with the Bank of Algeria, and eleven Algerian banks (six state-owned and five private) to launch the e-payment service in Algeria in October 2016; the service enables customers to carry out internet payments using their cards.

Regulatory and Markets Information
In order to diversify the Algerian economy away from its current dependence on the oil and gas sectors, the Algerian government passed a new investment law in July 2016 to encourage investment in non-oil sectors through incentives to existing and new local/foreign businesses in the non-oil sectors.

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