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Kuwait Country Report

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  • Published Date: July 2021

A comprehensive overview of the cards, payments, consumer banking and merchant acquirer market in Kuwait.

This payments market is going through some major changes, including improvements in the card-acceptance infrastructure as consumers move towards cashless payment modes at pace. During the pandemic, Kuwaitis quickly adapted to using cards and other hygienic means of digital payments to pay for goods.

Card spend on credit cards decreased in 2020 due to the pandemic, declining by 25 percent. The payment cards market in Kuwait however is expected to recover with green shoots already appearing in terms of debit card spend in the first half of 2021 and a rebound of credit card spend at the POS expected in succeeding quarters. The increasing popularity of e-commerce and associated move to digital, rising smartphone penetration, government backing and initiatives taken by issuers to encourage card usage, are sure to fuel the rebound.

KUWAIT CARDS AND PAYMENTS REPORT | KEY FACTS

  • Four local banks dominate the retail banking and payments market.
  • The use of cash as a means of payment for consumer transactions has decreased in recent years, with electronic payments becoming popular.
  • Kuwait is home to a young, tech-savvy demographic comfortable with modern payment methods.
  • With an estimated value in 2020 of $2.5 billion, there is also a growing e-commerce market that is forecast to grow by more than a fifth in 2021, making it a key channel for merchants.
  • Enjoying an average penetration rate of about 120 cards per 100 adults, the debit card is the most popular form of payment card here.
  • Kuwait has one of the highest usage rates of debit cards in the Middle East and North Africa. The average billed volume per debit card in 2020 was $18,911.
  • There are a growing number of Premium cards in the market. This segment has proven attractive to issuers thanks to its high spend and low-risk profile. The commercial focus has contributed to a changing usage pattern: from credit instrument to payment tool.
  • Visa is the dominant network across debit and credit.
  • UnionPay signed a strategic cooperation agreement with KNET to boost its card acceptance and issuance in Kuwait.
  • Acquiring is carried out by the issuing banks. The four main local banks control over 90 percent of both the credit card issuing and acquiring markets.
  • The central bank has been active in regulating the payments space.

Kuwait Payments Research | Report Contents

TABLE OF CONTENTS
Demographics and the economy
Payments environment
Cards market
Mobile payments
Profit pool
The networks
Key retail banks and issuers
Acquiring and processing
Online acquiring
Regulatory and other cards market information

Appendices: Kuwait Payments Data Tables

Appendix I: Demographics and the economy

Demographic and economic indicators
Data table 1: Demographic and economic indicators: 2015-2020. Estimates and forecasts to 2024.
Data table 2: Ownership of key consumer devices: 2015-2020. Estimates and forecasts to 2024.
Data table 3: Internet usage by population: 2015-2020. Estimates and forecasts to 2024.

Appendix II: Payments environment

Data table 4: Access points: 2015-2020. Estimates to 2021.
Data table 5: Account penetration: 2015-2020. Estimates and forecasts to 2024.
Data table 6: Consumer payment: trends 2015-2020. Estimates and forecasts to 2022.
Data table 7: B2C e-commerce payment methods: 2015-2020. Estimates and forecasts to 2022.

Appendix III: Cards market

Data table 8: Total cards payment metrics: 2015-2020. Estimates and forecasts to 2024.
Data table 9: Contactless cards metrics: 2015-2020. Estimates and forecasts to 2024.
Data table 10: Credit card numbers: 2015-2020. Estimates and forecasts to 2024.
Data table 11: Total credit cards metrics: 2015-2020. Estimates and forecasts to 2024.
Data table 12: Credit cards profitability indicators: 2015-2020. Estimates and forecasts to 2024.
Data table 13: Debit cards numbers: 2015-2020. Estimates and forecasts to 2024.
Data table 14: Debit cards metrics: 2015-2020. Estimates and forecasts to 2024.
Data table 15: Pre-paid/e-money card metrics: 2015-2020. Estimates and forecasts to 2024.

Appendix IV: Profit pool

Data table 16: Kuwait market profit pool: 2015-2020. Estimates and forecasts to 2024 inc. credit card numbers, billed volumes, oustandings, interest incomes, net interest revenues, merchant revenues, card fee revenues, other non-interest incomes, total revenues, net credit losses, operating expenses, total expenses, pre-tax profits, merchant service charges, rollover rates, APR, net credit losses to outstandings, operating costs to revenues, ROA (pre-tax profits to outstandings).

Appendix V: Card networks

Data table 17: Networks' credit card market shares: 2015-2020. Estimates and forecasts to 2022.
Data table 18: Networks' credit card data numbers: 2015-2020. Estimates and forecasts to 2022.
Data table 19: Networks' credit card billed volume: 2015-2020. Estimates and forecasts to 2022.
Data table 20: Networks' number of credit card transactions: 2015-2020. Estimates and forecasts to 2022.
Data table 21: Networks' average credit card transaction value: 2015-2020. Estimates and forecasts to 2022.
Data table 22: Credit card interchange fees by network: 2015-2020. Estimates for 2021.
Data table 23: Networks' debit card market shares: 2015-2020. Estimates and forecasts to 2022.
Data table 24: Networks' debit card data numbers: 2015-2020. Estimates and forecasts to 2022.
Data table 25: Networks' debit card billed volume: 2015-2020. Estimates and forecasts to 2022.
Data table 26: Networks' number of debit card transactions: 2015-2020. Estimates and forecasts to 2022.
Data table 27: Networks' average debit card transaction value: 2015-2020. Estimates and forecasts to 2022.
Data table 28: Debit card interchange fees by network: 2015-2020. Estimates and forecasts to 2022.

Appendix VI: Key retail banks and issuers

Data table 29: Key credit card issuers market shares by credit card numbers: 2017-2020. Estimates and forecasts to 2022.
Data table 30: Key issuers market shares in credit card outstandings: 2017-2020. Estimates and forecasts to 2022.
Data table 31: Key debit card issuers market shares by debit card numbers: 2017-2020. Estimates and forecasts to 2022.

Appendix VII: Acquirers and processing

Data table 32: Merchant acquirer credit card market share: Estimates for 2021.
Data table 33: Credit card merchant service charges: 2015-2020. Estimates and forecasts to 2024.
Data table 34: Merchant acquirer debit card market share: Estimates for 2021.
Data table 35: Debit card merchant service charges: 2015-2020. Estimates and forecasts to 2024.
Data table 36: Credit card issuer/issuing processor relationships
Data table 37: Credit card acquirer/acquiring processor relationships
Data table 38: Credit card issuing processor market shares by card numbers: Estimates for 2021.
Data table 39: Credit card acquiring processor market shares by the number of POS transactions: Estimates for 2021.

Appendix VIII: Online acquiring

Data table 40: Online merchant acquirer market share. Estimates for 2021.

Kuwait Country Report | Selected Extracts

Demographics and Economy:
Since the early 2000s, the population is entirely urban-based, with more than eight in ten Kuwaitis living in the eponymous capital city. The official language of Kuwait is Arabic but English is also used across the country.

Payments Environment:
This payments market is going through some major changes, including improvements in the card-acceptance infrastructure as consumers move towards cashless payment modes at pace.

Cards market:
Kuwait has until now been a predominantly cash-orientated society. However, the payment cards market is developing significantly, with the number of payment cards in circulation (including prepaid, debit and credit card) reaching over 4.8 million at the end of 2020.

Mobile Payments:
The main banks, for example NBK and KFH, offer their own mobile banking apps for everyday banking as well as various mobile wallets. There has been huge demand for alternative payment methods and the banks have been responding.

Profit Pool:
Kuwait is a highly profitable credit cards market. Credit card customers here have one of the highest levels of average spend per card and one of the highest overseas spending rates across Gulf Cooperation Council territory. Kuwait also has a high concentration of affluent consumers within the customer base.

Card Networks:
In Kuwait, Visa and Mastercard account for the vast majority of cards in issue. Of both, Visa dominates the credit cards market both in terms of cards in circulation and billed volume. There have been significant changes in the dynamics of the debit cards market in Kuwait since 2008, with Visa emerging as the dominant player.

Key Retail Banks and Issuers:
Kuwait has one of the oldest and well-developed banking sectors in the Gulf region. The top five retail banks constituted about 70% of total banking assets in 2020.

Acquiring and Processing:
There are four major acquirers in Kuwait: NBK, KFH, Commercial Bank and Gulf Bank. This quartet collectively accounted for an estimated market share of over 90% in terms of credit card acquired billed volume in 2020. Three major issuers and acquirers in the market – NBK, KFH and Gulf Bank – outsource their card issuing and transaction processing operations to First Data International.

Online Acquiring:
Online shopping is increasingly popular in Kuwait: e-commerce sales volume reached an estimated $2.5 billion in 2020, mainly thanks to high internet and smartphone penetration rates.

Regulatory and Markets Information:
Consumer debt, especially in the form of personal loans, over the years has been a contentious issue in the country. The subject has been the subject of much debate in parliament and the Central Bank of Kuwait (CBK), has actively worked to put measures in place to ease this problem.

Kuwait Payments Report | Entities Referenced

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Ahli United Bank
Al Ahli Bank of Kuwait
Al Rajhi Bank
Al-Salam Mall
Amazon
American Express
Apple Pay
AUB
Avios
BitPay
Bloomingdale's
BNP Paribas
Booking.com
Boubyan Bank
British Airways
Burgan Bank
Ci-Net
Citibank
Commercial Bank of Kuwait
Credit Information Network Company
Diners Club
Dubai Islamic Bank
EasyBuy
FinTech Regulatory Sandbox
First Data International
Fitbit Pay
Garmin Pay
GCC
GoCoin
Google Pay
Gulf Bank
Gulf Cooperation Council
HSBC
Jadopado
KCB
KFH
KIB
KNET
Kuwait Airways
Kuwait Banking Association
Kuwait Credit Bank
Kuwait Finance House
Kuwait International Bank
Kuwait Ministry of Commerce and Industry
Marina Mall
Mashreq Bank
Mastercard
Mobiquity
MyFatoorah
National Bank of Kuwait
National First Abu Dhabi Bank
NBK
Net-a-Porter
Nordstrom Rack
Open Banking Framework for Kuwait
Payfort
PayTabs
Qatar National Bank
RippleNet
Samsung Pay
Shared Electronic Banking Services Company
Souq
Starwood Hotels
SWIFT gpi
Tap Payments
Tasdeed
Taw9eel
The Avenues
T-Pay
UnionPay
UPayments
UPayments
Visa
WantITbuyIT
Warba Bank
Western Union
WhatsApp
X-cite
Zain Telecom

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